Elder abuse considerations when estate planning

The Australian Law Reform Commission (ALRC) produced a report mid last year on elder abuse titled Elder Abuse – A National Legal Response.

What is Elder Abuse?

Elder abuse as described by the World Health Organisation is ‘a single, or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust which causes harm or distress to an older person.  It can take various forms, such as physical abuse, psychological or emotional abuse, financial abuse, sexual abuse and neglect.

Recommendations in the ALRC report consider the balance between dignity and autonomy of older people on the one hand, and protection and safeguarding on the other.

An elder person’s lack of dignity and autonomy can create fear and may inhibit a person’s ability to make good choices.

The report recommends a National Plan is developed to combat elder abuse.

The issue is multi dimensional and complex, 43 recommendations were made by the Report.

In this article, we will refer to a few of the  recommendations that relate to estate planning.


Pressure or undue influence can be placed on older people to change their Wills which can lead to financial abuse.

The ALRC Report flagged that lawyers need to be more aware on a national level to understand the potential for this to occur and to identify the indicators that this may be occurring.

To avoid undue influence with older clients, it is important that that an elder client is seen alone (spouse excepted) and not with a support person who could for example be a child with an agenda.

Time needs to be spend to ensure that the client provides adequate instructions including details of their current family situation, former relationships, children from prior marriages and their assets, superannuation and other related assets such as family trusts for us to prepare a suitable Will .

The elderly client has to have the mental capability to provide adequate instructions and lawyers are encouraged to ask open ended questions, rather than closed questions where a client can respond by nodding – but perhaps not understanding at all.

Power of Attorney

These documents give financial decisions to a trusted friend or family member but can be used to financial abuse the older person in some cases.

Recommendations were made in the ALRC report to establish an on line register and to give tribunals jurisdiction to award compensation when duties are breached.

It is imperative that an elderly client only appoints an attorney that they trust and will put the client’s interests before their own.  Also a client may change their power of attorney any time and revoke an earlier one if that trust no longer exists.


A large amount of wealth is now held in superannuation and abuse may be in the form of coercion for an older person to contribute, withdraw or transfer their superannuation funds while they are alive.  Improper investment decisions may be made with SMSF assets and uncertainty surrounds whether an attorney can change a binding death benefit nomination previously prepared by the older person.

Recommendations were made in the ALRC report to consider a person’s enduring attorney and how an attorney can be appointed trustee or director for the SMSF if the member is unable to act themselves due to mental incapacity.  Also that the ATO is notified when an attorney takes over as trustee of a fund after the member is no longer able to act.

Lawyers need to take particular care with clients who are members of a SMSF to discuss the powers given to an attorney by the power of attorney document.  It may be the case the power of attorney should be tailored to take into consideration binding death nominations already made and how or if they can be varied by the attorney after the member is no longer able to make the decision themselves.

Also it’s important to discuss with clients how control of the SMSF is to shift if the main controlling ‘mind’ that is elderly member, is unable to continue.   There are a number of ways to address this issue.