Australians from all walks of life are being urged to speak up if they suspect they or someone they know are being subjected to financial elder abuse.
Australians need to understand the red flags for financial elder abuse.
- Unexplained inability to pay bills;
- Significant bank withdrawals;
- Changes to wills;
- Blocked access to bank accounts or statements;
- An empty fridge; and
- No money to pay for home essentials like food, clothing and utilities.
The EAAA estimates that one in ten older Australians experience elder abuse, mostly in their own homes and by a trusted person. It says financial exploitation is the most common form of elder abuse reported to state and territory elder abuse hotlines.
People have a moral obligation to report financial abuse instead of leaving the older people to fend for themselves, says Diedre Timms, the co-chair of the EAAA.
Financial elder abuse ranges from petty theft to older people being coerced into gifting large amounts of money or selling their home, she says.
In addition, psychological and emotional abuse are common and often occur concurrently as an enabler and sustainer of financial abuse.
One of the complexities is that the older person may not realise that what they’re experiencing is abuse, says Diedre.
“They talk about feeling taken advantage of while not realising how truly manipulative and underhanded it can be. Some older people are also unwilling or unable to acknowledge that their loved one is being abusive. Likewise, many perpetrators of elder abuse are unaware that some of their actions constitute abuse.”
Financial abuse often starts as a well-meaning agreement by a parent to sell their home to help pay their child’s mortgage. In return, they move in with the child’s family with the expectation of care and companionship.
But the parent could be left out of pocket if the living arrangement doesn’t work out and there isn’t a written record of their investment.
One of the problems is that family agreements are often oral with no paper trail.
Even if everything goes according to plan, written agreements also help prevent conflict once the parent passes away.
There could be family feuding if the person passes away without a written agreement. It could affect the estate as well. No one wants to leave a legacy of chaos and destruction after they pass.
Another cause of elder financial abuse is so-called inheritance impatience or early inheritance syndrome. In these cases, an adult child may become frustrated by a parent’s longevity and coerce them into giving them a portion of their inheritance in advance.
This is an area in which financial planners can help clients.
We have seen it up close where the client is almost buckling under emotional pressure from someone in the family.
In these cases, we are there as financial planners to remind clients of their goals. We may need to remind them that money gives them independence and choices.
It’s legitimate to have an emotional motivation for a financial decision. But one of the roles of financial planners is to help clients make rational decisions.
Our role is to safeguard our client’s future. Therefore, we need to understand their motivation and help them come up with a way to help their child without putting themselves at financial risk.
If you think you may be experiencing elder financial abuse, ASIC’s Moneysmart website lists potential warning signs and phone numbers you can call to get legal help, and the Elder Abuse Action Australia (EAAA) website also has more information and resources.