A member asked over 8 years ago

Mismanagement of senior's finances

When my step father passed my Mum settled all her finances and investments with relevant authority and moved from her home to an aged care facility. I agreed to take care of her physical needs and wants. My brother took over financials. He made certain promises and agreements and hasnt followed through. My mother believes every word he says, I believe he is manipulating her and further down the track probate could be a problem. Should I consult with a lawyer now, or wait for the time probate is commenced ?.

Law Advisor Research Team
Researchers at LawAdvisor

Hi there. It sounds like your mother is in a difficult position and it is wise that you are making enquiries about her situation. The laws that deal with the mistreatment of elderly people, either financially or physically, are complex. Below is some information that may be relevant to your mother’s situation.

A power of attorney is a legal document that authorises a person to act on someone else’s behalf. A power of attorney can be general or relate to specific matters, such as financial affairs. If your mother signed a power of attorney that gave your brother legal authority to deal with her financial affairs, then your brother has a legal obligation to act in accordance with the terms of the power of attorney. Your mother has the right to ask him to account for all his dealings undertaken as the attorney and, if she still has the mental capacity to make important decisions, she can revoke the power of attorney. Alternatively, your mother (with your help) can apply to the NSW Civil & Administrative Tribunal (www.ncat.nsw.gov.au) for a review of the power of attorney. The Tribunal can vary or revoke the power of attorney if it is in your mother’s best interests.

If there is no power of attorney and your brother simply verbally agreed to manage your mother’s financial affairs, there may be other options. If your brother promised to manage the finances, and your mother relied on his promise to the extent that she would suffer loss or detriment if he failed to fulfil his promise, then your mother may have a claim for what is called ‘estoppel’. This is a special legal term that basically means someone can be stopped from going back on their promise. The law can help by requiring that person to fulfil their promise.

If your mother was compelled, forced or improperly influenced into giving your brother control over her finances, she may have a claim for what is called ‘undue influence’. This generally occurs when someone is unduly influenced into entering an agreement. If this happened to your mother and she is now in a worse position because your brother has failed to properly manager her financial affairs, then the law may be able to help her remove him from his position of control.

Similarly, if you believe your brother is making a personal benefit or gain from your mother’s finances through a deliberate exploitation of his power, your brother may be liable for what is called ‘unconscionable dealing’. In this situation, you may be able to use the law to remove your brother from his position of control and reclaim any money or benefit that he has gained.

Suggested way forward

The above information is not exhaustive and there may be other legal options available to your mother. It is important to remember that, because this is a family situation, there are often practical problems when it comes to enforcing legal rights. A lawyer can help you understand your mother’s legal position and what options she has, even if it simply means negotiating with your brother on her behalf. Waiting until an application for probate is made is one option, but remember this will be a particularly difficult time for your family and there may be other legal issues to deal with under the estate. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.

Answered over 8 years ago   Legal disclaimer

Rebecca Mouthaan
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