One measure can provide strong protection against financial elder abuse. Photo / 123rf
One measure can provide strong protection against financial elder abuse. Photo / 123rf
Opinion by Jennifer Tweed
OPINION
As Aotearoa New Zealand’s population ages, another number appears far too high.
In the July 2021 to June 2022 year, of the 2768 cases that Age Concern’s elder abuse workers dealt with, 37 per cent involved financial abuse.
According to Age Concern New Zealand’s 2021 Elder Abuse and NeglectPrevention Services National Report, 48 per cent of elder abuse cases reported to Age Concern in 2020 involved financial abuse.
For a person in later life, perhaps the most urgent thought is: How can I make sure this doesn’t happen to me?
One of the best protective legal vehicles in the New Zealand framework is the Enduring Power of Attorney (EPA) – which works very well when applied correctly.
There are two types of EPAs, one for property and one for personal care and welfare. Property means everything that you own, including bank accounts, investments and so on.
Family members, close friends or professionals may be appointed as attorneys, and up to three people may serve jointly as property EPA (a personal care EPA can be held by only one person).
Anyone with an EPA should also have a will, but the EPA is only valid while the person is alive.
Elder Abuse Response Services providers reflected that a major factor in financial abuse is “inheritance impatience”, which comes from people’s feelings that they are entitled to an inheritance from older family members. As the average life expectancy increases, so does the amount of time it can take for people to receive proceeds from family estates. This can lead to impatience and anger, which may prompt fraudulent appropriation.
Anyone considering a family member for the role of property manager under a property EPA needs to seriously ponder whether such an appointment will help or hinder overall family harmony.
If appointing a family member, it is ideal to have a reporting process, including an annual statement of account, so others in the family can review the activity.
It is also recommended that an EPA includes measures for the appointed attorney to consult with another chosen member of the family, so decisions are not made in isolation and there is general oversight and transparency.
A property EPA doesn’t need to be family – they can be a close friend, or someone outside the personal circle such as a qualified professional. The best scenarios for a family member to hold this EPA are where there is high trust, strong intrafamilial relationships, relative financial equity, good communication patterns and access to a trusted independent adviser/s whom the EPA can consult as needed.
It is advisable to appoint more than one person (there can be up to three on a property EPA) to help ensure responsible management.
Regardless of who is appointed or how long ago, (unless stated in the initial EPA property’ document) the EPAs cannot not act on behalf of the person who has appointed them until it is formally established that the person can no longer make decisions for themselves.
Even then, when the EPA is activated, the law stipulates that the EPA must act in the best interests of that person and consult with them as much as possible.
Jennifer Tweed of Perpetual Guardian.
The right time to consider the benefits of a property EPA is now, as it may not be an age-related event when your appointed attorney needs to act on your behalf. Any major life change which means you can no longer manage your own property affairs competently will require it.
A common example I see through the many thousands of EPAs is injury or illness causing an unexpected loss of capacity (at any age). At the other end of the spectrum, anyone entering a residential aged care facility will be required to have EPA appointed.
If a “property EPA” is needed but not in place, an application to the Family Court is required and the court will appoint a property manager.
An EPA itself isn’t failsafe: it is possible for EPAs to be misused in the form of embezzlement by the person who has access to bank accounts, unauthorised “borrowing” or even selling property without the owner’s knowledge or permission.
If the property EPA is someone who also ultimately stands to benefit from the estate, it may be appropriate to involve an independent professional for an additional level of oversight for all beneficiaries, as well as support and guidance for the EPA property.
If you suspect financial elder abuse or fraud, Age Concern can help. Anyone can call Age Concern on 0800 65 2 105 to raise questions about elder abuse and neglect issues or the national helpline ‘EA NOT OK’ 0800 32 668 65 (which is free 24/7).
Jennifer Tweed is the Group General Manager, Client Services at Perpetual Guardian. She leads the company’s national branch network, including New Zealand Trustee Services (NZTS). She has a background in commercial and corporate law.
