Protecting The Vulnerable: Undue Influence And Safeguarding

• Published date: 07 August 2020
• Subject Matter: Finance and Banking, Criminal Law, Family and Matrimonial, Financial Services, White Collar Crime, Anti-Corruption & Fraud, Wills/ Intestacy/ Estate Planning
• Law Firm: Withers LLP
• Author: Ms Julia Abrey and Alice Tomlin

People are living longer than ever and as life expectancy continues to rise, so unfortunately do the risks of financial abuse and undue influence of the elderly or vulnerable. Anyone can be a victim of financial abuse, but age, physical frailty and mental capacity issues may make us more vulnerable.

The reality is that often financial abuse or influencing someone to make a decision (for example, the making of a new Will or a gift) involves those closest. Recent cases reveal that the perpetrator is frequently a family member or someone in a position of trust, be it an attorney, deputy, carer or neighbour.

How do you spot if something isn't right?

There are a number of red flags you can look out for if you suspect a loved one is being financially abused. The clearest sign of financial abuse is a change in spending habits. It may be an increase in withdrawals from the bank, significant transfers to someone else, bills going unpaid or rent overdue, another person being added as an account holder or the sudden appearance of relatives and friends (who may move in to live with the elderly person) to 'help' with finances.

There could also be slightly more subtle indicators; an interest-free loan, deed of variation, creating a trust of the person's property, running up debts with their money, selling assets at an undervalue or the vulnerable person not having resources to fund usual personal things like paying for a TV licence or buying clothes. Another clear warning sign is steps being taken to make significant changes to a Will.

Isolation of the individual from friends and family is also a red flag.

Is there an attorney or deputy?

Having someone in place to support and be responsible for the financial security of a vulnerable person is a key safeguard.

For those with elderly parents, family members or vulnerable loved ones, it is important to talk to them about putting a Lasting Power of Attorney ('LPA') in place so that, if they lose mental capacity, decisions can be made to manage and protect their finances.

If there is no attorney and your loved one has lost capacity to appoint one, then you can apply to the Court of Protection for a deputy to be appointed (a deputy can be a family member). The Court of Protection's guidance on how to apply can be found here.

It is very important to be clear on what an attorney or deputy can and can't do in respect of your loved one's finances. For example, an attorney is only able to give gifts on 'customary occasions' (such...