Elder law – burying your head in the sand won’t help

Date: 23 Oct 2024

Karen Jones

Joe Biden, the former US president at 81 years, was recently targeted by Donald Trump who raised concerns about his age, including his cognitive state, during and after the 2020 United States presidential election. Should he be running the US for the next few years? The country decided no and Kamala Harris, is the new incumbent for the Democrats.

As the age of global populations increases and with the rise of the internet, older adults are becoming more susceptible to a growing number of problems. These can range from online frauds that exploit their vulnerability to sweetheart scams targeted at the lonely.

Risks of making bad decisions

As well as these unpleasant events, older adults might end up in accidents at home or subject to undue influence in later years from carers or family. Older individuals, particularly those with diminishing mental capacity, are also at risk of making decisions that are not in their best interests, putting their finances, businesses, and well-being in jeopardy. This issue brings into focus the role of professional Attorneys and Deputies (Appointed by the Court of Protection), who manage the financial affairs of those who can no longer do so for themselves, ensuring their rights and assets are protected.

Issues for ageing parents who have older children who lack capacity

There can also be other issues for ageing parents who have older children who lack capacity or have mental health issues, compounding their problems and embarrassment of sharing their distress. In addition, many families do not have children to take care of them in later life meaning they will need to take care of themselves and set up later life care provisions. This is underlined by the Office for National Statistics (ONS), 43% of families in the UK in 2022 had no children living in them. This is equivalent to 8.3 million families.

Many GP’s are not keen to be involved

Assessing an individual’s mental capacity often involves input from medical professionals, such as doctors and social workers, ensuring that decisions made on their behalf are in their best interest. However, we learn that many GP’s are not keen to be involved because of lack of training and litigation. Citywealth spoke with leading private client experts to explore the themes and issues surrounding vulnerability, mental capacity, and the responsibilities of those entrusted with protecting at-risk individuals from exploitation.

Mental health issues in adult-children

Sally Ashford, Partner at law firm Charles Russell Speechlys picks up on the problem of adult-children saying, “I have had two separate clients recently who have come to me because they are worried about their (adult) child’s ability to manage if they were to die due to mental health issues in one case and physical health and possible capacity issues in another. In both cases, the parents were helping their adult children financially and practically but with no actual legal standing to do so. It was fine while it worked from a practical level but there were no precautions in place to protect the child who in both cases was vulnerable to influence or abuse and the parents were approaching old age and finding it also hard to cope with. They were looking for answers to make sure their child was going to be okay, but they had also forgotten to look out for themselves in the process.”

Embarrassment factor – asking for help

Ashford continues, “The situation is difficult because there is almost an embarrassment in sharing the issues with others, so they are feel very alone. In both cases the parents were in their 70s and the children in their late 30s to 40s.  It had taken a long time for them to pluck up the courage to do something about their worries. It is as if they feel they should be able to cope with it all because it is their child. The pinch point often comes when the parent is ill, it brings into focus what will happen when they are not there to pick up the pieces. Then they worry who will look out my child if I am not able to?”

Protection for adult children

“The advice is a mix of legal paperwork LPAs (Lasting Power of Attorney) and Wills, if possible, for the child, but thinking through how best to approach it with the child, do we need capacity assessments, and who can represent them if there may be a conflict?   Then there is the practical advice about getting support with day-to-day admin and making sure that perhaps further funds are not placed within the child’s control if there are worries about how they may be used.”

Ashford adds, “Then we also need to look at the same for the parents, making sure there is protection for the child going forward, perhaps looking at the use of trusts in lifetime and on death.  Exploring who could help outside the family or professionals if no one else is around. And generally, just reassuring them that they are right to ask for help, and not alone in their struggles.”

We get involved when a family member has abused their position

Jemma Garside, Partner in the Private Client team at law firm Kingsley Napley, headed up by James Ward, says, “We specialise in Court of Protection work and act as panel deputies for several elderly clients who lack capacity to manage their property and affairs. The Court of Protection has appointed us where the elderly person has no relatives or family members to help, and the local authority has applied for a professional deputy to be appointed. Also, we get involved where there has been a family member (or friend) who was appointed as LPA but has abused their position, often we have to investigate following concerns raised to the Office of the Public Guardian.”

Court of Protection backlog

Garside adds, “The Court of Protection has a huge backlog now so we can be appointed for clients and not get the Order or know anything about them until an entire year later. We then have to find them as the information we get is so limited; work out their assets including digital ones, business investments and property and run these as if we were them. We often have to consider estate planning and applications to the Court for approval of statutory wills, sometimes to put right the wrongs of wayward family members where it has not been possible to do so in the client’s lifetime.”

Elder abuse and financial exploitation

Alice Johnson, Private Client Associate at Druces law firm says on the topic of abuse of older adults, “Sadly, elder abuse and financial exploitation of the elderly is on the rise, especially since the Covid pandemic. Recent statistics show this abuse is more likely to take place in private households rather than in institutional settings (Office for National Statistics 2023). The global population of over 60s is estimated to more than double to c.2 billion in 2050 (WHO June 2024). They also own a high proportion of net housing wealth, investment, and savings.”

Preventing abuse

Johnson adds, “Setting up Lasting Powers of Attorney and planning for local powers if assets are abroad or if the client does have capacity an application for deputyship to the Court of Protection. Sometimes becoming an appointee to just receive benefits can be what you need. A General Power of Attorney is a useful document to cover the position until a Lasting Power of Attorney is registered with the Office of the Public Guardian.”

Red flags

“We need to be on alert for certain red flags. Have new documents been produced? By whom, why, where? Has the client changed their spending habits or behaviour? Of course, we must act sensitively when speaking to the client or getting advice from the Office of the Public Guardian. In certain circumstances contacting Adult Social Care or the Police may be appropriate. With the Wills Act 2025 on the cards for next year, overhauling how Wills are made in this country, preventing fraud, undue influence and forgery are going to be key issues if Wills can be made electronically or signed electronically. How are these documents going to be authenticated, will encryption or blockchain technology go far enough?”

Medical reluctance

Johnson continues, “Doctors are becoming more reluctant to engage in capacity assessments for fear of being sued and most have a lack of training in the area. There are two different tests for mental capacity with testamentary capacity, the mental and legal ability to make or change a valid will, being assessed under Banks v Goodfellow which is a landmark 1870 legal case that established a standard or the mental capacity needed and the Mental Capacity Act 2005. As practitioners we are looking more at the private medical sector but that isn’t cheap, and someone needs to cover the cost.”

Burying your head in the sand

Ronni Davidowitz a Partner at Katten Muchin Rosenman, New York shares her view, “I recommend parents with children who have limited function, instruct corporate trustees because they have the experience and are objective. They are also not personally involved because I have found family members can be resentful.” She says a trigger for asking for help usually comes if a spouse passes away, “It makes people anxious.”

Davidowitz adds, “Its best to start with some meetings with corporate trustees before there are any emergencies so that a comfort level can be reached especially if family members are going to be involved.” She adds, “Corporate trustees will manage the finances, pay taxes and set up systems for payments for day-to-day needs like rent”. She says there are also charities who can be involved at the same time so that there are “multiple touchpoints.” Davidowitz explains, “Corporate trustees can be an advocate for the child, looking out for their welfare and benefit so that they aren’t at the mercy of the government or hospital system.”

As to the price tag, she says, “It depends on assets available, the financial institution will take a percentage fee. We usually match up the clients assets with the entry point requirements for the institution.”

Waiting until the last minute

Davidowitz warns, “Burying your head in the sand just limits options. You want to stop an emergency happening where there are vulnerabilities and have an action plan,” Adding, “You can’t be helped if you don’t share your concerns. You owe it to everyone to think about it.” She says, “In my mind its ‘Communication articulation and recognition’,” Saying, “There are three circumstances also when a review of a plan is needed. Firstly, a change in personal circumstances so children have grown up or got married; secondly tax changes need to be addressed to be up to date and finally a review of finances at times so that a plan could upgrade (or downgrade).”

Embarrassment proves a key issue

Donald Trump running for president at 78 years old, should probably not be questioning Joe Biden about his age, but the point resonated with the voters and caused Biden’s undoing. Whatever the issues may be, ageing has become a global problem and as our experts reveal, scams, abuse and embarrassment are all part of the difficulty. However, all also agree, leaving difficult issues until an emergency arrives, limits your options, and reduces your opportunities, so be brave, discuss the concerns and get a plan for your loved ones in place.   

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