We are likely to rely upon an increasing amount of care towards the end of our lives, and this care will be provided by people who will be in a position to influence us regarding testamentary gifts.
The role of carer can be quite an intimate one. Confidences can be shared; friendships are established. It becomes a “trust” relationship. However the potential inequality in the relationship (the reliance that is necessarily placed upon the stronger person by the weaker person in the relationship) creates a ready climate for exploitation.
As a society, we judge the respective “bargaining” positions of many common relationships, such as employer/employee or teacher/student. Where one party is thought to be too weak to properly protect their own interests, the Government & the Courts will intervene to offer protection against unfair or unreasonable behaviour.
It is understandable that we may want to show our gratitude to our carers by providing for them in our Will. However such bequests can be open to challenge by family members and other beneficiaries after our death.
Questions of capacity and influence may arise.
Sadly, “Elder Abuse” is an increasing concern in modern society. “Gold-digging” is seen as a product of bullying, fraud, menace, duress, or undue influence. Advantage is sometimes taken of an elderly person’s reducing health, mobility, independence or mental status.
All sorts of rationalisations and justifications are offered by those unscrupulous enough to place their own interests ahead of the elderly person: “It’s what they would have wanted” is a common contention. Feelings of expectation & entitlement, or a response to financial desperation, are also commonly seen explanations.
We have all heard of examples where a vulnerable & elderly person changes their Will very shortly before their death, leaving a substantial gift to a “new friend” or carer.
Such gifts are likely to be viewed with considerable suspicion by Australian Courts.
The World Health Organisation estimates about one in six people aged older than 60 will be victims of elder abuse in Australia each year.
The majority of cases involve financial abuse or improperly using an older person’s money or assets — for example refusing to repay a loan or forcing them to sign a financial document like a will.
It is a growing problem, and it is prompting part of a burgeoning human rights movement: fighting ageism and protecting the rights of the elderly.
There are similarities to the early years of campaigns against domestic violence, when it was largely treated as a private problem for families and not a criminal offence.
However this is a human rights issue, just like domestic violence. We don’t lose our rights just because we age.
Most victims are older people who are cognitively able to make their own decisions, but vulnerable, because they are dependent on their circle of trust — usually their children, extended family and carers.
Their only social contact may be through their families or they may rely on their children to have access to their grandchildren or take them to medical appointments.
The biggest source of financial elder abuse is through informal (verbal) family agreements, which often involve the transfer of assets from an older person to their family.
A common example is when the elderly parent sells their house and agrees to use the money to finance the construction of a granny flat at their child’s home. The older person typically has no title to the dwelling, and loses the value of it when required to move into residential care.
Another typical occurrence is when the elderly parent allows a family member to stay at their home rent free in exchange for taking care of them. This can give rise to a sense of ownership and entitlement from the younger carer, along the lines that they have ‘earned’ a reward. This sort of expectation fuels many SACAT and inheritance disputes.
Sometimes a parent will gives their child an interest-free loan, or agree to be a guarantor for their mortgage, or takes out a mortgage on their behalf.
There can be complex family dynamics behind elder abuse. While most families begin these arrangements with good intentions, problems often arise when circumstances change, for example a serious illness arises or a new partner arrives.
There is a modern push to better protect older Australians, with the Australian Law Reform Commission in 2017 presenting 43 recommendations to the Federal Government for reforms to tackle elder abuse. Similarly a 2017 South Australian parliamentary committee called for the introduction of adult protection legislation, similar to child protection laws.
Anyone (especially elderly people) wanting to leave assets to a carer or a family member should take considerable care to minimise the risk of problems later on, including that the gift could be challenged or invalidated. There are steps that can be taken by an experienced lawyer specialising in estate planning to greatly assist your testamentary intentions to be made effective.
An effective solution is for proper documentation of the gift or loan to be drawn up as part of a modern integrated estate plan. When families put their arrangements into a proper legal deed or contract, it can plan for future contingencies and protect all parties. This can be very cheap insurance, to prevent litigation and family distress.
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