The government’s launch of a royal commission into aged care abuse has led more Aussie seniors into discussions around how to better protect their assets, a prominent lawyer has revealed.
While the government works towards better care for the elderly, Bennett & Philp’s elder abuse law and litigation expert Charlie Young said Baby Boomers are looking more closely than ever at their options for the future.
From financial arrangements to the piles of documents to sort through, it can be quite a complicated process for many as they say goodbye to their working life and try to secure their financial wellbeing for their retirement years.
Speaking to Starts at 60, Young explained there is a risk people may become more financially vulnerable as they age, but there are a number of proactive steps that can be taken to safeguard assets when entering retirement.
“From making sure everything is in writing to researching what your choices are, many people don’t realise the extent of how much you can prepare yourself for your future,” he said.
“It is paramount that legal advice should be sought before entering into any care agreement with your family. This isn’t because family cannot be trusted, but rather it is to ensure that you have done everything you can to protect your interests at a time when you will be vulnerable, or may have lost capacity.”
Seek legal and financial advice, always
Statistics show that as we grow older, we are at greater risk of falling victim to financial abuse. Government data released in 2018 shows that up to 9 per cent of Australians aged over 65 are victims of financial abuse, making it the most common form of elder abuse in the country. Intergenerational financial abuse is particularly common and often occurs when a person has not taken the necessary legal steps to protect their assets.
The best way to minimise this risk is to obtain legal advice before you enter into any verbal or written agreement, even with family members. If you intend to make a substantial monetary gift, transfer a property title, or loan money to a relative, seek legal advice to ensure your intentions are seen to and to make sure you can’t be taken advantage of if a relationship with a loved one turns sour.
Lock down family care agreements
It is not uncommon for a parent to pay money or transfer property to a child in exchange for that child agreeing to care for the parent in their old age. However, agreements that are made informally (particularly at the last minute) can sometimes result in the parent being financially abused. Formalise the agreement in a legal document so that if there is an argument down the track or concerns that a child has not fulfilled their side of the agreement, it is easy to prove the existence of the agreement and prove any monetary transfers were not simply a gift.
Review your power of attorney
A power of attorney is a useful tool that allows a trusted person to manage your assets when you lose the capacity to do so yourself.
“In many cases, parents name children as enduring power of attorneys, but this should be reviewed annually as family relationships of course can change,” Young explained.
“Is your attorney the right person for the job? If they have a history of gambling, making poor decisions or have trouble paying their own debts, you may be susceptible to the attorney abusing their powers and taking your assets. Be sure to choose your attorney carefully and not let them control the process.”
Maintain control of your finances
Young suggests over-60s should also attempt to maintain control of their financial affairs for as long as they can. Ask your bank what facilities they have that might assist you with this process. Young also warns against sharing pin numbers with a child or allowing a child to use your bank card to make purchases.
“While this might be convenient, an unscrupulous child might be tempted to steal your savings or take what they think is ‘their inheritance’,” he said.
Learn more about elder abuse
Statistics show that elder abuse is becoming more prevalent in the community, particularly as the Baby Boomer generation ages. This kind of abuse can happen to anyone irrespective of their financial status, so read up on what constitutes elder abuse as there is plenty of information available. The better informed you are on this topic and the possible risks, the more you can prevent elder abuse happening to you.