What Happens If I Suspect Financial Abuse?

INTRODUCTION

In the realm of estate planning, financial abuse can often go undetected until it's too late, posing severe risks and consequences when eventually discovered.

This article explores the nature of financial abuse, explains how to prevent it, and lays out what steps to take if you think it has occurred. Additionally, it offers advice on how to remain vigilant to protect your assets and ensure they are distributed in accordance with your wishes after your passing.

DEFINITION, COMMON MYTHS, AND EFFECTS

In estate planning, "financial abuse" refers to any situation where an individual manipulates, exploits, or misuses another individual's assets for their own benefit.

This usually happens without the individual's knowledge or consent, or the individual has been coerced.

Often, financial abuse can involve exploiting the victim's trust, especially in cases where the victim may be at risk due to old age, poor health, lacks mental capacity, or has poor financial literacy.

However, be under no illusion. Financial abuse can happen to anyone, regardless of health, wealth, or education.

If someone has access to your assets and financial resources, there's always a risk of financial abuse. We cannot emphasise enough the utmost importance of vigilance and protective measures as a foundational aspect of your estate planning for the following reasons:

1. Misconceptions:

• Myth: Financial abuse is easy to recognise.

• Reality: Often, abuse can take place over an extended period, making it difficult to detect until damage has already been done.

• Myth: Only the wealthy experience financial abuse.

• Reality: Financial abuse occurs across the demographic spectrum and is experienced by people with varying levels of financial assets.

• Myth: Financial abuse is committed by close acquaintances or strangers.

• Reality: Unfortunately, financial abuse is often committed by someone the victim trusts, such as a family member, a friend, or a caregiver.

2. Effects of Financial Abuse:

Falling prey to financial abuse can be a devastating and overwhelming experience, especially when it involves betrayal by a family member or friend.

Those feelings of betrayal can often be so profound that friendships and relationships may subsequently be irreversibly harmed.

EXAMPLES OF FINANCIAL ABUSE

In general, in estate planning, financial abuse can occur in the following cases:

• Coercion: An individual is pressured into making changes to their Will or Trust, making gifts, or transferring assets to another individual.

• Deception: An individual is deliberately misled or deceived into signing documents they may not fully understand.

• Dishonest Billing/Invoicing: An individual can be charged unnecessary and/or excessive fees or expenses by attorneys, Trustees or deputies that were not previously agreed with the individual.

• Forgery: An individual's signature can be forged - for example, when somebody wishes to gain control of another individual's property.

• Fraud: Fraudulent methods can be exercised, such as persuading an individual to transfer ownership of their property (in whole or in part).

• Theft: Taking money or assets from a vulnerable person without their permission or knowledge.

• Unauthorised Use or Spending: Attorneys, deputies, or deputies are spending money of the person they are responsible for without any authorisation or as if it were their own money. Trustees are using assets from a Trust without permission for their benefit and knowingly in breach of their responsibilities.

• Undue Influence: Force, pressure or coercion is placed upon an individual to make changes to their Will against their wishes or to draft a new Will. Persuasion can be exerted upon an individual to prepare a Lasting Power of Attorney to take control of their assets (see also "coercion").

HOW TO PROTECT AGAINST FINANCIAL ABUSE

Here are some steps to help protect you against financial abuse:

1. Nominate Somebody You Can Trust

Ensure that whoever you nominate as an Executor or Trustee is somebody you can trust and who aligns with your own values and priorities.

2. Ensure Your Will and Estate Plan is Constantly Updated

In life, things change fast and frequently. So, ensure you mark a periodic review of your estate plan in your diary. Your review should reflect your:

• Financial circumstances
• Family circumstances (new arrivals, marriages, deaths, divorces etc)
• Health

3. Ensure Your Personal Information is Protected

• Keep passwords safe and change them frequently.
• Keep your computer protected from phishing and identity theft.
• Be alert and suspicious when discussing financial affairs on the phone or in any form of electronic communication (including social media).

HOW TO SPOT FINANCIAL ABUSE

As we outlined earlier, financial abuse can often be challenging to detect until the damage has already happened. Crucially, it's essential to look out for any noticeable changes in behaviour among people you know, especially if you suspect they are potential victims of financial abuse.

Example Indicators of Changes in Behaviour in Potential Financial Abuse Victims.

1. An individual may show certain signs, such as:

• Suddenly spending less, despite no change in circumstances.

• Struggling to maintain lifestyle, despite no change in circumstances.

• Making unexpected changes to bank balances or banking practices.

• Repeatedly forgetting their wallet or purse.

• Declining invitations that involve spending money.

• Inability to explain lack of funds.

• Unexplained disappearance of funds from accounts.

• Sudden and unexplained changes to financial documentation.

• Making abrupt transfers of assets to another family member or an individual outside the family.

• Adding additional names on their bank signature card.

• Making sudden changes to their Will or financial documentation.

2. Other Warning Signs:

• Discovery of forged signatures.

• Sudden involvement of previously absent or uninvolved relatives in the potential victim's affairs/possessions.

• Unauthorised withdrawals from a potential victim's account by a third party.

ACTION STEPS IF YOU SUSPECT FINANCIAL ABUSE

It's vital to act swiftly whenever financial abuse is discovered or suspected.

While that is easier said than done, prompt action is vital to mitigate the potential severe damage that can be wrought. Once the victim passes away and assets have already been distributed, the process of gathering evidence becomes a lot more complicated.

If you suspect financial abuse, we encourage you to get in contact, and we can guide you through the process of addressing this serious issue. We'll guide you through gathering evidence, understanding your legal rights and exploring options for taking further action.

Need to know more or you’d like to discuss your options?

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