Protecting your loved ones with dementia from financial abuse has never been more important. To put your mind at ease, we’ve listed key steps to take.
For many of us, caring for a family member with dementia can be one of the toughest things we ever experience. It can be extremely hard to watch the person you once knew suffer changes to their personality and lose their independence little by little and, in turn, become more dependent on you. Indeed, 850,000 people currently live in the UK with the condition and the chance of getting dementia for over 65-year olds is about 1 in 14. In some shape or form, this disease will sadly affect us all.
When considering how upsetting this disease can be, it is almost inconceivable that someone would attempt to financially abuse a vulnerable member of your family because of their condition. However, due to dementia patients being more susceptible to memory loss, disorientation and difficulty communicating, certain individuals may seek to take advantage of them through financial fraud and abuse. In the Financial Abuse Evidence Review, published in 2015, the report states that ‘those who have dementia or reduced cognitive function are the subgroup of people who are most at risk of being victims of financial abuse.’ Figures from the report indicate that almost 130,000 people aged 65 and over in the UK have suffered financial abuse, although this is a conservative estimate as there may be many unreported cases that go under the radar.
Financial abuse can be devastating. Therefore, it is important to understand and prepare for the financial dangers faced by people who have this disease.
It is important to realise that while financial abuse and financial fraud are similar, they are not the same thing.
Financial fraud pertains to any deliberate false representation, including failure to declare information or abuse of position that is carried out to make gain, cause loss or expose another to the risk of economic loss. This can include the forgery of signatures on cheques, the theft of money, tricking someone into a bad investment or possessions and embezzlement.
While fraud can be part of financial abuse, financial abuse is a broader term which can also take more subtle forms. Examples of financial abuse could be:
For people with dementia, financial abuse can be devastating, leaving victims economically unstable and unable to afford the vital care and support they need. Often the emotional abuse felt by a victim is far more traumatising than the money lost; dementia sufferers can be extremely emotionally volatile and so this form of manipulation can be incredibly distressing.
While it may be easy to think that financial abuse occurs through scams conducted over the phone halfway across the world, more often than not the victim of financial abuse knows the abuser. In fact, research collated by Age UK indicates that 70% of financial abuse is committed by family members. In the UK, almost 50% of financial abuse is carried out by ‘adult children’ – notably grown-up sons and daughters.
Other perpetrators of financial abuse could be carers or anyone else who holds a position of power over the individual and is in constant contact with the victim. Abusers will often ‘groom’ their victims in order to secure their trust and make them rely on them, gain access to their property or bank accounts and manipulate the victims into turning the people who really want to help away.
Financial fraud and abuse come in a number of different forms and can sometimes be subtle and difficult to spot. However, there are certain things that you can keep an eye out for when safeguarding your family member’s accounts and possessions:
When your family member is first diagnosed, you may hear a physician talk about the different ‘stages’ of the disease: mild (or “early”), moderate (or “middle”), and severe (or “late”). It is important that you begin legal and financial discussions at the mild stage. On top of that, you must start to implement safeguards to prevent financial fraud.
Dementia is a degenerative disease, so ethically the discussion you have between you and your loved one about their future must be done when they are most aware. Within these discussions it is important to identify a small group of trusted individuals to help organise the financial transition of the family member and be vigilant for any attempts at defrauding the person.
Before you begin planning it is worth discussing the Mental Capacity Act briefly. Created in 2005, the Act is a piece of legislation that is essential when informing your early planning process. The Act assumes that everybody, unless otherwise stated, has the capacity to think and make decisions for themselves. However, when an individual has dementia for example, the Act allows others to make decisions for that individual through different protective frameworks.
Here are three important steps you can take: making a Will, appointing a Lasting Power of Attorney (LPA) and protecting your family members from phone scams.
The Lasting Power of Attorney allows a person (a donor) to appoint an attorney to act on their behalf if they should lose capacity in the future. An attorney is simply a person responsible for making decisions on behalf of the donor. An attorney does not have to be part of the legal profession; you can appoint someone you trust. Also, you can appoint more than one attorneys.
There are two types of LPAs that can be drawn up:
Welfare and Health
This means you appoint an attorney to make decisions concerning medical care in the future such as the choice of a care home and life-sustaining treatment. This can only be used once you (the donor) can no longer make your own decisions.
Property and Financial affairs
This means you can appoint an attorney to make decisions pertaining to your bank accounts, property, bills and pensions. Your attorney can act immediately once they are registered.
LPAs are vital when putting safeguards in place to protect your family member with a neurodegenerative disease from financial abuse. To make it valid, LPAs must be error-free and must also be registered with the government through the Office of the Public Guardian. The future of your family member’s wellbeing can depend on LPAs, and so it is essential to get the process right the first time around by contacting one of our solicitors to help begin the process.
Asking your loved one to create a Will (if they haven’t already) is never an easy task. However, a Will should be made as soon as possible after diagnosis. Time is of the essence as your family member must consider and create a Will when they can still make rational decisions and understand the nature of the document they are creating. Following a dementia diagnosis, it is important to get medical evidence to state that they are still fit to make decisions. For more information, follow the link to the article Making a will when diagnosed with dementia.
At Romain Coleman, our Wills and Probate solicitors can assist you in creating your family member’s Will, ensuring the document is legally binding, error-free and watertight against anyone who would try to contest it later.
For most people, it is easy to spot a cold caller or a phone-bot attempting to scam you out of your money. However, in a recent study published in the US by the Annals of Internal Medicine, people with dementia had a far higher risk of falling for these sorts of scams.
In order to prevent scams such as these affecting your family member, it may be worth installing a blocking system, provided by most telephone providers. This system is able to either only allow known phone numbers to contact the person or block anonymous numbers.
Our loved ones with dementia or Alzheimer’s are vulnerable to financial abuse as the disease progresses and with them losing the ability or capacity to manage their financial affairs.
Start the conversation today and explore appointing a Lasting Power of Attorney, making a Will, or even taking practical steps like installing a phone blocking system and seeking alternate banking options. Give our elderly care solicitors at Romain Coleman a call on 0208 520 4555.
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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.