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Financial Elder Abuse, what is it and how do we respond?

Every year on June 15 we mark World Elder Abuse Awareness Day to highlight the physical, emotional, sexual and financial abuse of older people. Financial abuse is the most common form of abuse and every year State Trustees uncovers at least 100 cases of alleged financial elder abuse.

Sam* was 93 years old and had four children, who were all estranged except for one son, who lived with him. After Sam’s wife became very ill two of his estranged sons began visiting and going through his papers. After finding that he had $240,000 in a passbook account, the estranged sons took their father to a bank and asked him to sign a withdrawal slip. They withdrew the entire balance and deposited it into a joint account in their names, saying they would manage his money for him.

His sons convinced him to sign an Enduring Power of Attorney appointing them to manage his financial and legal affairs. After discovering what they had done Sam’s granddaughter consulted with Sam. It was apparent that due to dementia Sam no longer had decision making capacity and could not revoke the Enduring Power of Attorney. Sam’s granddaughter made an application to the Victorian Civil and Administrative Tribunal (VCAT), who appointed State Trustees to manage his legal and financial affairs.

In Sam’s case the good news is that State Trustees contacted the bank and successfully froze the account before any funds had been withdrawn. Legal proceedings were initiated, and the matter settled prior to a trial taking place. $239,000 was deposited into Sam’s bank account and State Trustees then carefully managed his finances according to his wishes.

How does State Trustees know what to do?

In one word, experience. Each year, VCAT appoints State Trustees to manage the financial and legal affairs of around 1,200 Victorians. State Trustees can be appointed by VCAT in circumstances where there is medical evidence of a decision-making impairment due to disability, such as dementia, mental illness or intellectual impairment. Every client’s circumstances are different, and our appointment often comes about when there is family conflict, missing funds, or the tasks are too technically and emotionally complex for family or friends to complete.

Once appointed, State Trustees have a dedicated team of experienced consultants that meet the person, immediate family or support network to understand how they want their finances managed. The team will confirm assets, income, liabilities, current and future expenses. They often clear up financial issues that have not been addressed for some time, such as debts or unclaimed entitlements. They act to protect assets such as property or bank accounts and their work can help provide certainty and comfort.

Unfortunately, sometimes the VCAT order comes after the client is already in financial trouble. Frances* was referred to State Trustees after she accrued a debt of $71,000 in aged care fees. Her daughter was acting as Frances’ Financial Attorney under an Enduring Power of Attorney. Over two years $230,000 was withdrawn from Frances’ account by her daughter. In addition, her daughter did not pay her mother’s aged care fees resulting in the debt.

After contacting the daughter to ask how the $230,000 had benefited her mother, it was clear there was a strong case to ask her to return the money. State Trustees initially requested that her daughter repay the money owed to her mother. She did not comply, so State Trustees made an application to VCAT for compensation. VCAT accepted State Trustees application and made an order stating that Frances should be compensated by her daughter for the misappropriation of funds.

These cases show how easily financial elder abuse can occur and, unfortunately, how the victims are often taken advantage of by the people closest to them.

If these stories raise concerns you may have for yourself, a friend or a family member, we urge you to seek professional help by contacting one of the organisations listed below:

State Trustees (ask to speak to an expert on financial elder abuse):1300 138 672
Office of the Public Advocate: 1300 309 337
Seniors Rights Victoria: 1300 368 821
Elder abuse phone line: 1800 353 374
Victoria Police: 131 444
Domestic Family Violence 24/7 Counselling Service: 1800 737 732

* The names have been changed to protect their identities

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