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Practitioners should always be alert to signs that an elderly or vulnerable client’s transaction is being facilitated by another person with a direct or indirect interest.

Senior Rights Victoria have recently reported a concerning 39% increase in calls to its helpline (the majority dealing with elder abuse) in the first quarter of 2023.

To help practitioners contend with this fraught area, the Law Council of Australia have recently published a revised and expanded Best Practice Guide for Legal Practitioners in Relation to Elder Financial Abuse (the Guide). The guide suggests best practice measures that practitioners can implement to identify and protect the interests of clients in transactions where they are potentially vulnerable and/or subject to financial abuse. Accompanying the guide is also a new Best Practice Guide for Legal Practitioners on Assessing Mental Capacity.

Financial abuse occurs in various forms including pressuring an older person into changing their will, or seeking to gain access to an older person’s assets before they die. Common instances of this include family members arranging for parents or grandparents to be guarantors of loans or to borrow money and then on lend the money to the family member. Alternatively, asking the older person to transfer their property into the family member’s name in exchange for a promise to look after them. Another common example is misuse of power of attorney arrangements.

The Guide provides a summary of the various practical and legal considerations practitioners should think about when setting up the retainer with the client. Considerations include: identifying who is the client, is there a conflict of interest, are you arranging to see them alone, is an independent interpreter required and when meeting with the client, checking that the client understands the transaction, establishing adequate mental capacity and volition, and ascertaining if there are indications of undue influence or unconscionable conduct underlying the client’s instructions.

The guide also covers the importance of creating detailed and accurate file notes, always confirming advice in writing and file retention.