Why elders? Understanding financial abuse

News stories of an ageing population are often coupled with claims of generational selfishness ("spending the kids’ inheritance") talk of an increased burden on the taxpayer, and warnings of the expected "burden" on the health system. These discourses contribute to an atmosphere of generational resentment. The current older generation is the first to be considered a "social problem".

Ageism is revealed in stereotyping and discrimination. Older people may be discredited and disregarded. Their needs and rights may be seen as subordinate to those of the following generations.

Past generations expected that their family – in particular their children – would take care of them in their old age. There was the accompanying expectation that family wealth would be passed down from generation to generation.

For much of the twentieth century there was also the expectation that the state would support older people, through aged pensions, free or subsidised healthcare, and institutional accommodation.

In recent times Australia has moved towards a user pays system of aged care, where better care can be accessed for those who are willing to pay more. People now expect to contribute more towards their retired lifestyle and care in later life, and so are making financial provision for their support in their old age.

Most Australians remain in their own home in retirement. Multiple generations are less likely to live together and older people expect to be – and are expected to be – more financially independent.

Since older people are increasingly planning to use their assets to fund their old age they now feel obliged to provide for themselves first, before thinking about intergenerational obligations.

The theme of entitlement comes up time and again in instances of financial abuse of older people by members of the family and other close associates.

In interviews conducted as part of Monash University’s 2009 study “Financial abuse of elders: A review of the evidence”, it was commonly observed that children of clients demonstrated ownership and entitlement towards the assets of their parents. The expectation that they would inherit their parent’s wealth was both motivation and justification for interfering in their financial affairs. This sense of entitlement can lead to bitter disputes within families and competition to be "the closest" to the parents.

This sense of entitlement to a parent’s assets can lead to financial abuse such as borrowing money and not paying it back, asset stripping, and denying care the parent needs (and can afford) to preserve the inheritance.

Financial abuse is the only form of elder abuse which can occur in isolation from the abused.

The growth of Online and electronic transactions means opportunities for misappropriation of funds and other assets has increased, just as the opportunities for supervision have decreased.

In an age when funds are typically accessed electronically, theft of a PIN can lead to unfettered access to funds and the temptation to access them dishonestly can be strong.

Older people can make poor decisions, and this may be in part due to impaired cognitive capacity. Older people can lose the ability to manage their finances, and these cases a family member may step in, with the honest intention to act on behalf of the older person. Sometimes this can gradually change, from taking care, to taking the assets.

This abuse, unintended at the outset, can take several forms, including:

• separation from assets: for example, selling the older person's house, usually in return for promises of care
• obtaining an Enduring Power of Attorney when a person shows signs of deteriorating capacity, without proof of capacity
• decisions taken at a time of crisis, when the older person was vulnerable, and accountability was poor
• due to cultural norms, intergenerational relationships take priority over accountable asset management
• where children use love for themselves and grandchildren as a lever to get access to the older parent's assets.

Intentional financial abuse is financial abuse that is carried out by a trusted person with the clear intent of their own benefit at the expense of the owner of those assets. It can range from deliberately defrauding someone, a criminal activity, to deciding to deny needed health care simply to preserve an expected inheritance.

The Monash University study found that there is a greater exposure to intentional abuse when the older person is isolated, unprotected and failing in cognitive capacity. It may involve coercion through love or fear or confusion and is undeniably wrong.

Intentional financial abuse may involve professionals who abuse their relationship, or impatient children with a high sense of entitlement to their expected inheritance, or friends who have managed to take pre-eminence over family relationships. The abuser demonstrates the willingness to interfere in the management of the assets in their own interests, even to the detriment of the owner of the assets.