Financial abuse can be difficult to detect without independent oversight.
Sue made sure her only child, Caroline – who lived with an intellectual disability – would never have to worry about money.
She directed her estate to set up two trust funds and even made sure Caroline wouldn’t be alone by asking a married couple, who were close family friends, to regularly check on her.
But warning signs quickly appeared after Sue passed away and the couple moved interstate.
“Their travel costs started to become exorbitant,” says Equity Trustees Senior Estates and Trusts Solicitor Suzie Willis.
“For example, they might only see Caroline once or twice but they would be sending reimbursement requests for all their petrol and accommodation costs for an entire two week trip. They thought that was reasonable. As a trustee, we said, ‘no, it's not’.”
While Equity Trustees managed the assets in the Protective Trust and Special Disability Trust, Caroline’s personal financial decisions were overseen by the State Trustee. Nonetheless, Equity Trustees sensitively raised the issue with Caroline.
“She's more than able to express her own desires and wants,” Willis says. “She didn't like this couple and didn't want them involved. So we very gently and courteously worked through that situation with these family friends.”
Equity Trustees brokered an introduction to personalised care service LiveWell Care, and arranged for a new relationship. Now one of their carers, Anthony, visits Caroline once a month and takes her to lunch. He makes sure she’s happy and receiving everything she needs in the assisted care facility where she lives.
“Caroline and Anthony have built a lovely relationship – it's something that she really looks forward to every month,” Willis says. “While we don't manage her personal affairs, if we hear there’s an issue, we can help fix it by contacting the State trustee because we know there’s plenty of money in the Trusts we manage to pay for it.”
The grey areas of financial abuse
Financial abuse is estimated to have cost victims $5.7 billion and the broader economy a further $5.2 billion in 2020, according to a Deloitte report *.
“Parents of children with disability are often concerned that they’ll slip through the cracks – that people will stop checking in on their children and that someone could take advantage of their vulnerability,” Willis says.
A wide range of people across different age groups and socioeconomic levels fall victim to financial abuse, which can be difficult to detect, including people with disability or poor health and those from culturally and linguistically diverse (CALD) backgrounds.
“People are very cunning about it,” Willis says. “Sometimes the people who are financial abusers or potential financial abusers would never view themselves as such – they see it almost as their right or entitlement. That's why it's so insidious. Making your plans while you're in good health and good mental health is critical.”
The role of trustee: separating financial and personal financial management
The roles of Trust financial management and personal financial management are legally separate functions.
However, Equity Trustees can also act in a personal financial capacity for an adult child living with disability. It requires a client to draft a letter of wishes to be presented to the Victorian Civil and Administrative Tribunal (VCAT), which allows Equity Trustees to be appointed as administrator.
The adult child’s personal financial affairs are then looked after by a different team within Equity Trustees.
“We also we work out an appropriate fee structure for that so we're not double dipping. We can come up with elegant solution to a complex problem.”
While in Caroline’s case, Equity Trustees had no legal obligation to help, Willis says its an area where they add value to ensure their clients aren’t being exploited.
“I've been at Equity Trustees for nearly 20 years and I've seen the trustee industry change over that time. It's about striking the right balance between your legal obligations and making sure you don't overstep the mark, while remembering that we’re dealing with human beings that need our care.”
* The cost of financial abuse in Australia report retrieved from Commonwealth Bank of Australia and Deloitte.2022.
More information about Equity Trustees’ trust management services is available on our website.