The majority of estate litigation matters in Canada centre around alleged financial abuse — either the financial abuse of elderly individuals or abuse by a personal representative when executing an estate.
Sometimes, elderly individuals are at risk because they may not be able to protect themselves adequately from demands for money as they age.
Other times, undue influence is claimed, usually by a family member of a deceased individual who accuses another individual of exerting undue pressure on the deceased when preparing estate planning documents like a will or power of attorney.
One avenue open in such situations is to pursue estate litigation for financial abuse. Our Alberta estate litigation lawyers can assist with this.
What is financial elder abuse?
Elder financial abuse occurs when a family member, caregiver or friend (or even an employee of a financial institution) takes advantage of an elderly person’s finances.
It could be the unlawful or unauthorized use of an elderly person’s financial assets or the act of pressuring an elderly person to authorize the use of their financial assets
This type of abuse can be a difficult topic because it often involves one family member accusing another. Also, as people age, they often rely on close family members to help make financial decisions on their behalf, so the line between carrying out their wishes and abusing that privilege may become blurred.
This can result in serious issues and allegations of fraud — leading to estate litigation — unless the problems are addressed before they reach that stage.
Elder financial abuse can take many forms. It ranges from small-scale abuse, such as using a credit card to pay for an item to large-scale fraud, such as influencing a person to change a will to include a large inheritance.
Understandably, elderly people often trust those around them and many don’t find out that they’re being abused financially until it’s too late. It is estimated that the majority of cases of financial abuse in Canada are either hidden or go undetected.
If a friend, family member or caregiver takes an undue interest or involvement in an elder’s financial matters, it may be time to ask a few questions.
Typical examples of financial abuse
Most commonly, financial abuse of elders involves one of the following:
- Pressuring an elder to make changes to his/her will, Power of Attorney or another legal document.
- Taking money or possessions without the knowledge or approval of the individual.
- Failing to repay loans from the elder.
- Forcing an elder into giving away money, property or possessions.
- Tricking an elder into giving away money, property or possessions.
- Asking an elder to sign legal or financial documents without explaining what they are.
Establish a financial power of attorney
A power of attorney (POA) is an essential estate planning document that can help protect an elderly family member and prevent financial abuse and estate litigation as a person ages.
However, it’s important to act early and not wait until your loved one loses mental capacity and cannot make decisions for themselves.
A financial power of attorney appoints a trusted person (usually a close family member) to make financial decisions on behalf of an individual. Depending on the requirements, powers can be authorized for limited periods and certain transactions only, be broader in scope or take effect only when an individual loses the capacity to make decisions for themselves.
The person appointed must not only be trustworthy but also capable (and prepared) to make financial decisions, manage financial affairs in the best interests of the elder and communicate effectively with other family members.
For instance, could a child of the elder be tempted to make decisions that cut into their inheritance rather than serving the best interests of the aging parent? Is a child based in another province well-suited to manage the elder’s financial affairs remotely?
If the choice of power of attorney is a poor one, it can lead to disputes and estate litigation. Some people choose corporate attorneys or financial professionals as POAs to avoid family conflicts.
Note that the power of attorney covers financial matters only — not healthcare or personal decisions. These are covered in an expression of wishes or healthcare directive.
“Undue influence” with a will or power of attorney
Exerting “undue influence” on an elderly person when preparing or amending a will or power of attorney is a form of elder financial abuse.
If unexplained changes are made to essential estate planning documents, insurance forms, bank accounts, etc., this could be a red flag, especially if any of the following apply:
- The elderly person has been spending a lot of time with one particular person, who stands to benefit from the financial or estate planning decisions.
- Elderly family members are rarely visited by other members of the family.
- The elderly person is increasingly (and purposely) isolated by a caregiver or person in authority.
- One individual appears to have an increasingly controlling or dominating influence over the elder.
- There are requests by a particular individual to be present at all meetings involving family matters.
How do you prove undue influence?
Undue influence can be difficult to identify and prove.
Most of the warning signs outlined above can have other reasonable explanations so it is important to take legal advice if you suspect a problem.
Courts in Canada respect people’s right to decide what to do with their finances and their estate after they die. Proving undue influence requires evidence of coercion because it often occurs when there are no witnesses. Mere “influence” is not enough because many people make legitimate financial decisions based on the influence of other people.
It’s best to start by talking to the alleged target of the abuse and asking them tactfully about any changes in living arrangements, who they spend time with, and financial decision-making.
A skilled estate litigation lawyer can advise you further on how to pursue this delicate matter.
What happens if an elder changes a will or POA due to financial abuse?
If you suspect financial abuse of any type with a loved one, either due to an unexpected change in a will or power of attorney or financial irregularities, contact an elder law professional and discuss your concerns as soon as possible.
There may be time to prevent more financial damage and preserve family relationships. Whether this involves removing the authority of a POA, challenging a caregiver or applying through the courts to have assets frozen, it is important to act quickly.
Assets may be recovered and recent changes invalidated if there is sufficient evidence to pursue litigation. Financial abusers may also be required to pay punitive damages to the victim in some cases.
For any matters concerning elder financial abuse or estate litigation, speak to an experienced lawyer at Vest Estate Lawyers about your needs.
We currently have three offices across Alberta — Edmonton, Calgary, and Red Deer. However, we serve the entire province of Alberta. We also have the infrastructure to work with any of our clients virtually — even the furthest regions of Alberta.
We also have a dedicated intake form to help you get the ball rolling. Our intake team will review your specific case and advise you on the next steps to take as well as what to expect moving forward.
Our offices are generally open 8:30 a.m.—4:30 p.m., Mon—Fri.
WILLS and ESTATES LAWYER
Allison provides a personalize experience in her Wills, Estates and Surrogate practice. She endeavors to get to know the clients to ensure the advice provided fits outside of the “one fits all” mold and fits individual family circumstances.