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"Early inheritance syndrome": the hidden problem of elder abuse

Opinion

Addressing the largely hidden but all-too-common problem of financial abuse of elderly Australians will require the involvement of the entire community, writes Andrea Michaels.

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With Christmas fast approaching my kids are putting together their wish list for me (and Santa). Asking for presents is fun and children can usually expect to find something they want under the tree.

But imagine what this might be like if your kids never really grow up? There are cases where they still feel entitled to be ‘looked after’ financially by mum or dad, even when their parents are old and vulnerable, needing assistance themselves.

I’m talking about the very real problem of financial elder abuse.

It’s a very sad situation but one advisers see on a regular basis. And it’s something, too, that’s increasingly concerning lawmakers.

While regulations can be changed or tightened to try to address these issues, ultimately prevention will need the active involvement of those who deal with the elderly on a regular basis including GPs, bank tellers, chemists, shopkeepers and neighbours.

What does elder financial abuse look like?

It’s a common narrative in Hollywood films: grown children wanting to get their hands on a parent’s wealth using any means.

It now has a name: “early inheritance syndrome”.

Reports estimate around 6 per cent of Australians are victims of elder abuse each year. Financial and psychological abuse are the most common forms.

I suspect these figures are conservative. The problem is often masked with many elderly parents kept silent by feelings of guilt, embarrassment and a misplaced sense of loyalty.

More and more, I hear new versions of some of these real-life horror stories. A parent makes their son or daughter their attorney, who then say they need to sell the family home and use the money to care for the parents. But then the house is sold, the money disappears, and the care doesn’t eventuate. Instead, the parent is subjected to regular harassment for more funds or is pressured to amend a will or withdraw superannuation.

In most cases, elder abuse happens in a relationship based on trust. In 2015, a Victorian Royal Commission into family violence found more than 90 per cent of the elderly abusers were family members. It disproportionately affects women with 70% of victims being female.

How a child can abuse an elderly parent physically, emotionally or financially is almost unthinkable, and yet it happens, and it goes on unreported.

While many cases of abuse may not be as obvious as selling the house under a parent’s nose, having a family member taking a sudden controlling approach to finances, coercing parents for money regularly, threating to reduce contact unless demands are met, or banning a parent from seeing other members of the family, all should be classified as red-flag behaviour. Other examples would be a son or daughter speaking to their parents in a continually demeaning way, treating them like a child, or telling them they have dementia without a formal diagnosis.

New recommendations for change

It’s clear we need a more cohesive approach to this issue and more direct lines of reporting to help address the problem.

Many good recommendations came out of the Australian Law Reform Commissioner’s Report, Elder Abuse – A National Legal Response, released in June this year. I hope many of those initiatives are implemented at a state and federal level.

The recommendations include a national register of enduring documents and safeguards against power of attorney misuse, better management and regulation around self-managed superannuation funds (and who runs them in the event that someone becomes mentally incapacitated), more stringent witnessing requirements in many areas of wills and estate planning, and better education of frontline advisers like medical, banking and financial planning staff so they can recognise the signs of abuse and report suspicious activity immediately, or provide advice.

Community education about the problem is also a critical part of the solution.

Invisible problems need people to speak out

This is a problem without social or economic boundaries.

It happens at home, in granny flats, in aged-care facilities and in hospitals all around the country. But it’s such a hard area to tackle when families don’t often want to admit there’s a problem that needs outside help, or they don’t know who to talk to.

We need the State Government to educate our community and properly resource this area. Then it’s up to the community to watch out for warning signs and deal with them.

Get to know your elderly neighbours, take time out to have a chat when you see them in their gardens or talk to other residents when you visit your own well-loved parents in their assisted accommodation. Keep an eye out and speak up if you notice something that isn’t quite right.

And if you are elderly and you feel under undue pressure to provide financially for others, you can speak to your lawyer, your doctor, or other members of your family about anything that worries you. It’s nothing to be ashamed of – there are people who can help.

This Christmas we need to remember we are all part of a community. It’s time to show we care by watching out for those who are vulnerable. Elderly people can be especially lonely at this time of year, so I hope it’s comfort they find with their families and not torment.

Andrea Michaels is a tax law and family business specialist and the managing director of Adelaide firm NDA Law.

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