By the time most families notice financial abuse of elderly parents, it has been going on for months. Money is gone. Documents have been signed. The person responsible has positioned themselves as indispensable, and your parent may not even see a problem.
Financial abuse of older people rarely begins with theft. It begins with help.
Access comes first
Someone enters your parent’s life in a practical capacity. A family member who starts handling the grocery shopping. A carer who takes over medical appointments. A neighbour who becomes a regular presence. None of this is alarming on its own. Then things shift.
Calls start going unanswered. Visits require notice. When you do see your parent, there is someone else in the room. Your parent seems hesitant or gives answers that feel rehearsed.
Isolation is what makes financial abuse possible. Once someone controls an older person’s contact with the outside world, they also control what that person is told, what decisions they make, and who prepares their legal documents. Section 4 of the Guardianship Act 1987 (NSW) places an obligation on everyone dealing with a person with a disability to prioritise their welfare and protect them from exploitation. That obligation does not only apply to formal carers or legal appointees. It applies to anyone in a position of influence.
If you cannot speak to your parent alone, that is not a minor inconvenience. It is a warning sign.
What follows: documents and money
Once someone has that level of access, the financial transactions tend to follow a predictable path.
A new enduring power of attorney is arranged, replacing a previous one that named multiple people, or any document at all, with one that names only them. A will is updated, often quietly and quickly, in a way that cuts out children or other family members who had always expected to benefit. The family home is transferred for nominal consideration, sometimes described in the documents as “natural love and affection.” Money leaves your parent’s accounts in amounts that do not match their care costs, living expenses, or any credible explanation.
Two questions courts ask
Did your parent understand what they were signing?
Courts assess capacity at the time of execution, not based on a general impression of how someone seemed. A person can be lucid in conversation but still lack the legal capacity to execute a will or sign away their home. For wills, the test from Banks v Goodfellow (1870) LR 5 QB 549 requires the testator to understand what they own, who might reasonably expect to benefit, and the nature of what a will actually does. For financial transactions, the question is more functional: could the person cope with the ordinary affairs of life at the relevant time (Re D [2012] NSWSC 1006, PB v BB [2013] NSWSC 1223 per Lindsay J).
Where cognitive decline is progressive, the court does not just look at the day of signing. It asks whether, given the trajectory of decline, the person could be expected to manage without risk of exploitation going forward (McD v McD (1983) 3 NSWLR 81, P v NSW Trustee and Guardian [2015] NSWSC 579 per Lindsay J).
In Ryan v Dalton, Estate of Ryan [2017] NSWSC 1007, nursing home records documented that the deceased was regularly confused and agitated around the time he signed a new will. His solicitor had not recorded any capacity assessment in her file notes. The court refused probate of that will and granted it in respect of an earlier one instead. The file note issue mattered not just to the solicitor professionally. It was a gap in the evidence that the court could not overlook.
Was the decision actually theirs?
Undue influence does not require proof that someone was threatened or forced. It requires showing that the person’s judgment was overborne by the influence of another, so that what looks like a decision was really someone else’s will imposed on them. Critically, once a relationship of dependence and trust is established, the burden shifts. The person who benefits from the transaction has to show it was fair and freely made, not the other way around.
In Hanna v Raoul [2018] NSWCA 201, a transfer of an elderly uncle’s home to his nephew was set aside on exactly this basis. The nephew was his carer. There was no independent legal advice. The court did not accept that the nephew’s claim that he had not pushed for the transfer was sufficient. He could not discharge the burden of proving the transaction was the uncle’s independent choice.
Speed and secrecy at the time of signing are themselves evidence. In Dickman v Holley, Estate of Simpson [2013] NSWSC 18, a ten-minute meeting between a solicitor and a client was found insufficient to establish either capacity or the absence of pressure. A signed document is not proof that someone understood or freely agreed to it.
Signs of financial abuse of elderly parents worth acting on
- Your parent has recently signed something, whether a will, a power of attorney, or a property transfer, and gives a vague or inconsistent account of what it involved or why they did it.
- The person who stands to benefit arranged the appointment, drove your parent there, or was present during the meeting with the solicitor.
- A will or power of attorney has changed to concentrate authority or benefit in one person, particularly where your parent had previously been clear about their intentions.
- Money is leaving your parent’s accounts without a clear reason tied to their care or ordinary expenses.
- Your parent is less accessible to you than they used to be, and there is always a reason why.
What to do, starting now
The process depends on whether your parent is still alive.
If your parent is alive, start with financial records and transaction histories. Banks are required to produce records in certain circumstances. Having that picture before taking any formal step matters. How an application is framed affects its prospects.
Where money is actively being moved, NCAT’s Guardianship Division can appoint a financial manager. They take over management of your parent’s estate under s 25G of the Guardianship Act 1987 (NSW). A misused enduring power of attorney can be revoked under s 36 of the Powers of Attorney Act 2003 (NSW). NCAT can also order a full accounting of every transaction made. Urgent interim orders are available under s 25H if you cannot wait.
Where money has already gone, a civil claim for breach of fiduciary duty can recover it. An attorney is not entitled to benefit from their position. This applies regardless of family relationship or whether harm was intended. See M v M [2013] NSWSC 1495 and s 39 of the NSW Trustee and Guardian Act 2009. The claim can be brought while your parent is still alive.
If your parent has died, the options shift to the Supreme Court. A will can be challenged on capacity or undue influence grounds. Property transfers, gifts, and unpaid loans can also be challenged in equity. The limitation period for family provision claims is 12 months from the date of death.
Do not wait. Bank records get harder to obtain over time. Witnesses’ memories fade. The person in question has more time to characterise everything as consensual. Acting early keeps your options open.
Before a problem arises
Prevention is easier and cheaper than litigation. An enduring power of attorney should name two attorneys, not one. They should be required to act jointly on any significant transaction. This removes a common avenue for abuse. A will that has been recently reviewed is harder to challenge. It should reflect your parent’s actual intentions. It should also have been prepared with proper attention to capacity. A will meeting these requirements is harder to manipulate. An independent trustee or professional financial manager adds useful oversight. They act as a check on another attorney’s decisions. This layer of protection does not rely on family trust alone.
If your parent still has capacity, now is the time to have those documents properly prepared.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
Article Written by Isabelle Knight, Solicitor
