This concern is often expressed to us by clients who have been assisting their parent to manage their financial and health affairs.
A combination of factors has combined to heighten this concern and among them are:
- People are living longer;
- There is a greater acceptance of, and tendency to form, new romantic relationships late in life; and
- The enormous increase in value of most residential properties has meant that, where a home forms part of the property of the senior parent, the value of the parent’s assets is likely to be very significant.
Should I do anything?
The first question you should ask yourself is whether it is appropriate for you to do anything. If your parent has full capacity and is otherwise managing his or her affairs then, whether you like it or not, it may be none of your business what they do in relation to their personal relationship with others. Provided people do so with full capacity they are entitled to make good or bad decisions regarding their personal situation. This doesn’t mean that you can’t diplomatically counsel your parent about your concerns that advantage might be taken of their situation but care needs to be taken to avoid creating a rift that might not easily be mended.
What if mum or dad doesn’t have full capacity?
If you have concerns that your parent is being preyed upon by a new partner then your options will depend upon whether you have taken steps, before your parent lost capacity, to put in place measures to give you the right to handle their affairs. If you have elderly parents and they presently have capacity you should arrange without delay to have enduring powers of attorney and enduring guardianship appointments made to ensure that, should they lose capacity, you have the ability to conduct their affairs. The enduring power of attorney allows you to deal with financial matters whereas the guardianship document is concerned with lifestyle and medical decisions.
If you don’t have an enduring power of attorney and your parent loses capacity you will need to apply to a tribunal known as NCAT for financial management orders to allow you to conduct their affairs. This is a time consuming and expensive process when compared to the relatively straight forward and inexpensive process of getting an enduring power of attorney in place.
Assuming you have an enduring power of attorney in your favour or a financial management order from NCAT you should take the following steps (which is not intended as an exhaustive list):
- Secure and monitor bank accounts to look for unauthorised or irregular transactions. If necessary close an account and open a new one to which the new partner has no access;
- Consider putting a caveat on the real estate owned by your parent to prevent the registration of any unauthorised dealings without you first getting notice of the intended registration of the dealing;
- Although you don’t have the right, as a financial manager or attorney, to take possession of the original will you should take steps to make sure that it is secure and cannot be destroyed. The lack of an original will or destruction of a will is presumed to be evidence that the testator intended to revoke it. It can be difficult to overcome that presumption if the original will is not available after your parent’s decease.
- You should obtain and preserve evidence of your parent’s lack of capacity. This can be very useful if a surprise subsequent will emerges after their passing providing substantial benefits to the new partner in circumstances where the new will was made after your mum or dad lost capacity.
Obviously the above suggestions are not intended as a comprehensive list of steps that are available to you or that we recommend that you take. If you or a family member or friend has questions or concerns regarding the care of your elderly relatives please contact us on 9525 8688 or at wmd@wmdlaw.com.au for more information and assistance.
