Older Australians are being advised to take control of their financial affairs during NSW Seniors Week (15 – 23 March) and put the right measures in place for their financial and legal future.
According to NSW Trustee & Guardian, far too often older people are misplaced in their trust of others to do the right thing for them and this can lead to financial abuse.
Sue Field, NSW Trustee & Guardian Fellow in Elder Law at the University of Western Sydney says while people often think they can hand over their affairs to one of their children, it is quite common for the siblings not to agree with their parents’ choice.
“Stories abound about unscrupulous attorneys who have fraudulently taken the money and assets belonging to the client. Unfortunately sometimes this happens when a family member is the attorney.
“But you really need to think about appointing a power of attorney sooner rather than later – if you begin to lose your mental capacity, it will be too late and you may be left unable to cope with your financial affairs,” she says.
“It is important for seniors to understand that while it may seem like a flattering responsibility they are handing to someone they know, the role of an Attorney is a delicate one with legal consequences for the Attorney if they mishandle finances,” she cautions.
“If you lose money when you’re younger, you may have the opportunity to re-build your finances but older people simply don’t have the time or resources to regain the value of poorly managed investments. A professional body such as NSW Trustee & Guardian has years of experience and legal knowledge to help reduce the risk of costly investment mistakes,” she added.
Imelda Dodds, CEO NSW Trustee & Guardian agrees. She advises seniors to carefully consider who they choose as their attorney under a Power of Attorney, as the role is not one to be taken lightly.
“The role of an attorney is to manage your financial affairs, so the attorney needs to have the financial acumen to pay bills and look after bank accounts, and if required, the ability to manage investments such as income from shares and rental properties. It is an important role but one that many people see as purely the responsibility of their nearest and dearest regardless of their skill-set to fulfil this job.”
Appointing someone as your attorney gives a person responsibility for many legal and financial aspects of your life, such as your banking, signing legal documents, collecting rents, paying bills and ensuring you have enough money and resources to live comfortably,” said Ms Dodds.
On the other hand, not all problems that occur are a result of reckless financial decisions using a Power of Attorney.
“A woman in her eighties who suffered from dementia called on a man, Jeremy to start mowing her lawns. Within only a few months Jeremy had taken the woman to a solicitor and had her change her Will and sign over the deed to her home to his father in trust for his sons. (At that time Jeremy was an undischarged bankrupt),” says Imelda.
“The woman was then moved into a cramped lodging house, and virtually all her possessions were taken from her including whatever was in her bank’s security box, even down to the paintings on the walls. By the time NSW Trustee & Guardian came into the picture the woman was living in two rooms with a weeks’ food in the fridge and little else.
“NSW Trustee & Guardian managed to have the deed struck down but unfortunately the lady passed away not long thereafter,” she said.
“For those concerned about cost, there is no charge to come and talk to us if they have any questions regarding Wills and Powers of Attorneys. Both come hand in hand and are vital in preparing and protecting your financial future,” she said.
Older people should also consider the following when reviewing their financial and legal affairs, or when considering monetary requests from anyone:
- Appoint an attorney, under a Power of Attorney who can manage your financial and legal affairs professionally and independently. You need to know your attorney will competently make decisions and have the business and financial skills to manage your affairs properly;
- If you are asked by a family member to loan them money, ask yourself, “Can I afford to lose this money?” In theory, if the answer is “no” then don’t lend it;
- If you are going to lend money, then seek independent legal advice and arrange to lend the money via a loan agreement;
- It’s important to understand that if you’re asked to go guarantor it is because the financial lenders want security (a guarantor) because they’re not prepared to take the risk themselves;
- Discuss major decisions at a family gathering to help get unanimous decisions. For example, one child may find flaws in a sibling’s proposal about what to do about your financial or legal situation, property or investments and this may be best resolved in a discussion with the family;
- Make sure you have a professionally drafted Will and continue to update your Will as your circumstances change.
There is no charge to make a Will or set up an Enduring Power of Attorney with NSW Trustee & Guardian. Charges apply on estate administration only, or for a Power of Attorney, upon its activation.
Similarly people who feel like they may be victims of financial abuse should seek advice as soon as possible.
“There is often a stigma for elderly victims of financial abuse. It can be difficult to understand why one of your relatives or so-called loved ones would behave in a way to take advantage, and there can be a fear of isolation or withdrawal of contact to grandchildren if an individual speaks out.
“However they do not need to put up with this. There is legal protection available. Again, they can contact a solicitor or their local NSW Trustee & Guardian branch,” she says.
During Seniors Week, NSW Trustee & Guardian is holding special Wills Days throughout the State. Call 1300 364 103 to make an appointment, and for general information visit www.tag.nsw.gov.au.
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