Financial Abuse — Lifetime Gifts & Transactions

Financial abuse often involves a trusted person treating another’s money as if it’s their own. 

This can range from using their bank card to transferring large sums of money (or even property) for the benefit of themselves or people connected to them.

One form of financial abuse is known as predatory marriage.

According to Age UK, financial abuse is the “mistreatment of someone in terms of their money or assets, such as their property”. This includes situations where monies are being stolen, misused or access to assets are being restricted. 

While financial abuse can take many forms, it often arises where the victim is being assisted with aspects of daily living, such as shopping or care services.

The most obvious signs to look out for are: 

• unusual or unexplained bank transactions 
• frequent cash withdrawals
• bank accounts and money being restricted or new authorised signatories 
• sudden or unexpected changes to a Will or Lasting Power of Attorney
• large, unexplained gifts 
• isolation from family members and friends 
• change in living conditions and behaviour, particularly in relation to money 
• increase in gifts or money to a particular individual or group of people.

It can be difficult to prove financial abuse — particularly where the abuser has legitimate access to a victim’s assets. For example, where they are an account signatory or have authority under a Lasting Power of Attorney. 

Since the ‘abuser’ is usually someone in a position of trust — such as a family member, ‘friend’ or carer — financial abuse can be difficult to identify. 

In most cases where financial abuse is suspected, a report would usually be made to the police and bank (if appropriate) so that investigations can be carried out. It may also be necessary to make a report to Social Services and the Office of the Public Guardian where the abuser is acting under a Lasting Power of Attorney or Deputyship Order. 

It’s easier to obtain proof of the abuse where the victim remains living, as (for example) they’ll be able to provide direct evidence regarding any unauthorised or suspicious transactions. This may include obtaining bank statements and witness statements. 

Where a victim has died, things can become complicated due to strict data protection and disclosure rules, which can be difficult to navigate. 

We have expertise in investigating and dealing with allegations of financial abuse.

Typically, the victims of financial abuse are elderly or infirm and unaware or unable to understand the true extent of the abuse. Sometimes, they’re dependent on their abuser and as such can be reluctant to raise or acknowledge concerns. 

While the most obvious form of financial abuse would be the misuse of money — another treating the victim’s money as if it was their own — the victim may be coerced or pressured into making decisions about their assets to the benefit of the abuser. This can include making changes to a Will or various and often substantial lifetime gifts.

Sadly, financial abuse isn’t always apparent until after the death of a victim, when steps are taken to administer the Estate. It’s then that the true extent of the abuse becomes evident.

We’re often instructed by clients in these instances. The legal principles are complex and our expertise can be vital in ensuring that all available investigations are completed and the merits of any case properly understood.

In predatory marriages, the perpetrator often isolates the victim from family and friends and arranges a marriage, which may take place in secret.

Since marriage creates significant legal advantages for a spouse, it can be used as a shortcut to financial gain — whether the benefit occurs during the lifetime or upon the death of the vulnerable party. 

Unless a Will is stated to be made in contemplation of marriage, a marriage will automatically revoke any previous Will. This often results in the new spouse inheriting the majority (if not all) of the vulnerable person’s estate. 

The consequences for disinherited family members can be devastating. Sadly, the new spouse can also gain control over the funeral arrangements and exclude the family.

A ‘lifetime gift’ is what it sounds like — a gift of cash or property made by one living person to another.

There are various reasons why a person may want to make lifetime gifts, with the majority of people opting to do so for tax and estate planning purposes.

However, if the reasons behind the gift aren’t properly documented, this can lead to a dispute after death about whether the gift was legitimate.

Lifetime gifts can be challenged on the basis that the person making the gift:

• made a mistake
• didn’t have the requisite mental capacity to make the gift (due to a medical condition, such as dementia)
• was influenced or coerced by another into making the gift.

Attorneys (usually appointed under a Lasting Power of Attorney) and deputies (appointed by the court) have a duty to act in the best interests of the person they’re assisting. They must keep proper records of financial transactions and dealings and can be called on to provide an explanation of any suspicious dealings.

The powers that attorneys and deputies have can be removed by the court if misconduct — or even just innocent mismanagement — is proven.

We have extensive experience of representing concerned family members, as well as other legal professionals in such cases.