Elder Abuse, Succession Law and the Forfeiture Rule

Elder abuse is of matter of increasing concern. It can take many forms, with financial abuse being the most common form dealt with by lawyers. The difficulties in combating and redressing elder abuse have sparked a review of the law in this area.

One of the solutions being considered is the extension of the “forfeiture rule” from succession law to the misuse of Powers of Attorney. In succession law, the “forfeiture rule” prevents a person who has caused the death of the Will maker from receiving any gift to them in the Will.

One form of elder abuse is the financial misuse of a ‘Power of Attorney’. A Power of Attorney is a document created for the benefit of an individual (the “Principal”) which grants to another person (the “Attorney”) the power to deal with the principal’s financial affairs whilst the principal is still living.

Consider the following example.

A mother prepares a Power of Attorney appointing her eldest of 3 daughters to act as her Attorney. The Power of Attorney states that:

1. The Attorney’s powers come into effect once the Principal has lost mental capacity; and
2. The Attorney cannot confer benefits on herself or make gifts to any other person.

The mother subsequently loses mental capacity and is placed into a nursing home by her eldest daughter. This daughter proceeds to use the Power of Attorney to withdraw money from her mother’s bank account for personal holidays, jewellery, gifts to her own children and improvements to her own home, whilst only ensuring that her mother’s nursing home fees are paid. The mother’s estate is considerably diminished so that upon her death almost nothing is left for the other daughters to inherit from her estate.

This is a fairly clear example of elder financial abuse and, as such, could be the subject of Court proceedings to recover those moneys from the eldest daughter. In many cases, abuse is more difficult to determine, for instance:

a) Where lack of capacity is merely suspected, such as with early stage dementia;
b) Where the person lacks capacity to provide evidence of the abuse; and
c) Where it is not clear whether an asset obtained by an adult child or spouse was a gift or improperly obtained.

Proposals have been made to extend the ‘forfeiture rule’ to cases of elder abuse. This rule prevents a beneficiary of a deceased person’s estate from obtaining a benefit when their act brought about the death of the deceased. An extension of the rule to elder abuse would mean that a person who has committed abuse cannot inherit from the estate.

If you would like more information on the issues raised in this article, please do not hesitate to contact our Succession Law Solicitors at Brazel Moore Lawyers on (02) 4324 7699.