Behind the Headlines: Beware the elderly bearing gifts

Gareth Ledsham, Partner in the Russell-Cooke Solicitors, trust, will and estate disputes team.
Gareth Ledsham
3 min Read

In June of this year a few newspapers in the UK picked up on a study carried out by researchers at the University of Southern California in Los Angeles (USC), which found that those that were more generous with their cash, were often in a worse cognitive state than their more frugal counterparts, or at greater risk of Alzheimer’s.

Generosity at face value

Elderly people making gifts to children and other family members is of course nothing new. It can be an effective way to pass money down the generations in a tax-efficient way, and can be a welcome financial boost to the recipients.

However, the USC study is a timely reminder not simply to take such generosity at face value. Reports of financial abuse have been on the increase, contributed to in no small part to the isolating effects of lockdowns during the pandemic.

It stands to reason: if a person is suddenly being more generous with a grandchild, might they also be being more generous with a stranger? It is also not just stereotypical scammers to look out for; sometimes the most egregious financial abuse is carried out by family members. Often the family member will have convinced themselves they are doing what the victim would have wanted, or that they are taking in advance what they think they are going to / are entitled to inherit anyway. Sometimes, a family member may have misunderstood the limits on their powers under a lasting power of attorney (for example, the fact only modest gifts on customary occasions are permitted under an LPA – not substantial gifts).

Obviously, the fact that someone is making gifts does not equate to that person being financially abused. There are, however, a few tell-tale signs to look out for. These include: previously uninvolved friends or relatives appearing on the scene, claiming rights to deal with a potentially vulnerable person’s finances or showing concern about how money is being spent (for example on care); gifts outside the ordinary pattern of gifts a person has made before; isolation of a person from friends and family and unexplained disappearance of funds or an unexplained shortage of funds.

There are of course many more examples. Often, if something doesn’t ‘feel’ right, it is often worth investigating further.

Concerns around financial abuse

In cases of concern about financial abuse, there are various sources of support, including Social Services, the Office of the Pubic Guardian or a specialist solicitor, who can advise on options, including if an application to the Court of Protection might be warranted.

Gareth Ledsham is a Partner in the Trust and Estate Disputes teamHis remit includes will challenges, claims for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975, claims concerning domicile, breach of trust and claims relating to ownership of a deceased's property (implied trusts and proprietary estoppel).

Briefings Individuals & families Partner Gareth Ledsham discusses if something doesn’t ‘feel’ right when elderly people making gifts to children and other family members.