Protecting Our Guardians
A Practitioner’s View on the Issue of Financial Abuse of the Elderly in Singapore
There are increasing anecdotal evidence of elderly suffering from financial abuse, but frustratingly, not enough debate and conversations on how to prevent it. This article aims to seed meaningful conversations on this issue and suggest some interim measures to mitigate the effects of financial abuse of the elderly.
Due to rising costs-of-living, increasing wealth inequality, lack of job security and rising barriers to home-ownership for young adults, many find themselves in difficult financial straits, in contrast to the older generation of Singaporeans who accumulated their wealth during the years of Singapore’s rapid economic growth and are relatively more financially comfortable. At the same time, Singapore’s population is aging, and there are an increasing number of elderly living alone. An oft-cited Institute of Mental Health (IMH) study in 20151See ‘https://www.imh.com.sg/research/page.aspx?id=342’ has shown that one in 10 persons above the age of 60 suffers from dementia, and this number is only expected to rise moving forward, with increased life expectancies. There is therefore both incentive and opportunity for financial exploitation of elderly family members via the use of legal instruments.
Some Facts and Figures
In 2010, the share of resident population (i.e. Singaporeans and Permanent Residents) in Singapore aged 65 years and older stands at nine per cent of 3.77 million, an absolute number of 339,300 residents.
In 2020, residents in that same age group made up 15.2 per cent of the total resident population of 4.04 million in 2020, an absolute figure of 614,080 residents.
The figures show that our elderly resident population has increased by an estimated 55 per cent and more than doubled in the same period that the Mental Capacity Act has been in effect. There are more women than men, and the majority are homeowners.
Factors for Increasing Vulnerability
Compared to the older Pioneer Generation, the group of seniors in their late sixties to seventies is relatively wealthier. At the same time, as compared to the younger generation, they tend to be more willing to engage strangers on the telephone, trust others with bank cards, or make financial or property gifts in return for emotional support.
There also exists a seemingly forced adoption of technology, and the current pandemic has in some ways accelerated the trend of bank and post office closure. While some elders find it difficult to live with a smartphone, it is impossible to obtain easy access to various government services without a smartphone and a Singpass these days. The increased digitalisation of financial transactions requiring multiple passwords, increased use of Singpass, phishing and other digital scams have increased the vulnerability of the elderly. Even well-educated and well-heeled people fall for such digital scams. We crave flexibility when things are well, and accountability when things go wrong – but accountability and flexibility exist in a continuum.
Most scams involving vulnerable elderly used to be detected by eagle-eyed bank tellers. However, with digitized banking services increasingly replacing in-person, over the counter service, this safety net is being abruptly challenged. By forcefully nudging the elderly population towards the digital bandwagon, the Government may be unwittingly increasing their vulnerability.
Also, there exist imbalance in family dynamics due to the physical and cognitive decline of the elderly. The elderly may benefit from a Lasting Power of Attorney (LPA), yet it is often a family member who contact a certificate issuer to “get” a power over the elderly person’s assets, rather than wishing to be “given” the power by the same elderly relative. The prospective donor is rarely the one initiating the need to make an LPA. With good intentions, the Government is legislating to make it super convenient to execute an LPA, but the legal advisor will be wise to avoid adopting a default position of helping a family avoid deputyship at all costs.
Jane (a proxy name) is a retiree who used to work in the Singapore Police Force. She is a well-educated elderly single, who was referred to me for estate planning services. For the longest time, she had managed to avoid internet banking, preferring instead to use the services of her local bank or her ATM card. However, a nephew whom she was close to had cajoled her into opening a new bank account with internet banking services, saying that it was important for her to pick up this new skill in order to keep her mind active. She later found out that this nephew had misused her internet banking facilities and had made transfers without her consent to other bank accounts. That said, she chose not to report the nephew as she did not want to sour family ties. She shared with me her embarrassment at how an ex-law enforcement officer like her could fall for such a scam.
I have been a lawyer for nearly seven years and six of those years have been spent in specialist private-client work handling trusts, probate and estates work. During my career, I have observed many elderly clients who came to me with the intention of securing their assets for the benefit of their family and relatives. Very often, this is not for the elderly client’s benefit, but because they are often convinced that it is their parental duty to help and support their children. Very rarely an elderly person will contact me because they fear or are convinced that someone is helping themselves to their money.
An Under-Reported Issue
By its very nature, financial abuse of the elderly tends to be under-reported. It tends to be insidious and hard to detect. The second reading of the Vulnerable Adults Bill on 18 May 20182See the full parliamentary report at, ‘https://sprs.parl.gov.sg/search/fullreport?sittingdate=18-05-2018’ had raised numerous examples of financial abuse of their constituents by Members of Parliament, the most common being parents who provided for their children, sold their homes to support their children to buy new ones, only to find themselves evicted out of those homes.3According to a Bloomberg article, In 2016, the total resale value of Singapore’s HDB apartments was estimated to be more than S$400 billion. See ‘https://www.bloomberg.com/news/articles/2020-07-08/behind-the-design-of-singapore-s-low-cost-housing#:~:text=In%202016%2C%20the%20total%20resale,community%20center%20and%20a%20library’
Parliamentary questions in 2018 also revealed however that in the first seven years of the MCA, the courts have not revoked any LPAS under section 17(3) MCA4See then NMP Asst Prof Mahdev Mohan’s parliamentary question, ‘https://www.msf.gov.sg/media-room/Pages/clarifications-on-Lasting-Power-of-Attorneys.aspx’. There are, however, two cases in which the Public Guardian has acted in under section 36A MCA. In some respects, the numbers might seem reassuring. However, the figures do not tell the full story: defining the extent of the problem of financial abuse is tricky. A review of evidence carried out by TRANS SAFE Centre in 2014, a charity exclusively focused on elder welfare and tackling elder abuse, showed that victims of financial abuse are more likely to be older and to lack capacity to manage their own financial affairs. The same review found that one in three cases of elder abuse involved financial abuse.5See Theresa Tan, ‘Breaking the silence on financial abuse of elders’, The Straits Times, 6 February 2016. The Singapore Government has said that this aspect will be re-examined later after more experience is gained from tackling physical and emotional abuse, see Closing Speech by Minister Desmond Lee at the Second Reading of the Vulnerable Adults Bill (18 May 2018), para 19.
In particular, those lacking capacity are seldom able to report abuse when it happens. Financial abuse tends to come to light after the elderly client loses mental capacity or dies. It is often too late for the client to figure out what has happened. Considering the immense social cost where taxpayers will often pick up the tab, there remains a serious lack of research and paucity of data in this area of elderly financial abuse.
If the figures by TRANS SAFE centre in 2014 are correct, this raises the question of why there are so few removals of donees or deputies as abusers.
Brief Legislative Context
There is increasing anecdotal evidence of elderly suffering from financial abuse, but frustratingly, not enough debate and conversations on how to prevent it. This article aims to seed meaningful conversations on this issue and suggest some interim measures to mitigate the effects of financial abuse of the elderly.
Singapore as a society have made giant strides in recent years by passing the Mental Capacity Act in 2010 (MCA) and the recently enacted Vulnerable Adults Act6Act No. 27 of 2018. This Act was brought into force on 19 December 2018. in 2018 (VAA). The MCA gave us, inter alia, a legal definition of “lack of mental capacity” and a set of legal protections conferred upon people who suffer from a lack of capacity. The VAA, inter alia, extends legal protection and allow state intervention in the lives of adults aged 18 and above who are mentally competent but are considered vulnerable.7Section 2 of the VAA.
That said, the VAA was intentionally designed to exclude state intervention for protection of a mentally competent elderly person against financial abuse.8See also Para 160 of Goh Yng Yng Karen (executrix of the estate of Liew Khoon Fong (alias Liew Fong), deceased) v Goh Yong Chiang Kelvin (2021) 3 SLR 896; (2020) SGHC 195 where Ang Cheng Hock Justice expressly stated how there is currently no settled definition of “elder abuse” and inferred the conscious intention of Parliament during debates on the Vulnerable Adults Bill (Bill No 20/2018) to “focus its legislation on physical and emotional abuse to the exclusion of financial abuse”. This is probably not due to a lack of willpower or intention from the part of the Government or other stakeholders, but more likely due to a lack of scientific survey of our population on this issue. A lack of meaningful data makes it difficult to approach this hot button issue that seems to be concurrently de-prioritised and not well-resourced.
Six years after its enactment, the MCA was amended in 2016 to provide the courts with the necessary legislative powers to revoke an LPA or a deputyship order when the donee of an LPA or a court-appointed deputy is convicted of an offence or is no longer registered as a professional deputy or donee.
During the Family Conference 2018, Ms Indranee Rajah SC, then the Second Minister for Law in her keynote address to the Bar and the Bench, specifically mentioned that “the [MCA] was amended in 2016 to plug gaps to prevent the vulnerable from being exploited financially.”9See Para 113 and 114 of the keynote speech by Indranee Rajah, ‘https://www.mlaw.gov.sg/news/speeches/keynote-address-by-indranee-rajah-sc-second-minister-for-law-family-conference-2018’ Part of the legislative powers created to achieve that aim allow the courts to suspend the proxy decision makers’ powers even if no application has been made before it. These improvements made in the legislative landscape should be applauded, recognised and widely publicised to the public.
That said, as part of the concept of due process, as lawyers, we know it takes time to collect evidence, formulate a case and present a matter before the Court. Even after an initial judicial outcome is obtained, there remains the availability of a robust appeal process for one who disagrees with the judgment. Due to this nature of the judicial system and the magnitude of the issue facing the Office of the Public Guardian (OP’), it is both simplistic and unfair to lay the incidences of elderly abuse before them.
In all fairness, the courts can only deal with cases that are placed before it, and that relies on someone – or the OPG – having the appetite and the wherewithal to bring the cases. That predisposes a reliance on the observation of possible financial abuse coupled with sufficient gathering of evidence to present a case. This poses some difficulties as we currently do not have a common consensus on the definition of financial abuse.
What is Financial Abuse of the Elderly?
Financial abuse is easy to describe but hard to define. There is no common language or consensus among the various disciplines of social work, law, medicine and allied health, financial services such as banks, and also law enforcement officers.
While Singapore currently has no statutory definition of financial abuse, we can look towards the UK Care Act 2014 (UKCA) for a preliminary working definition.
Section 42(3) of the UKCA describes “financial abuse” as a type of abuse which includes having money or other property stolen, being defrauded, being put under pressure in relation to money or other property and having money or property misused.
While the definition seems clear, financial abuse takes many forms which can make it difficult to detect and identity. It may but does not always involve a crime like theft or fraud. It involves or is often associated with the following actions or deeds:
- Borrowing money without returning the loan;
- Stealing money or belongings;
- Promising care in exchange for money or property and not following through on the promise;
- Forcing someone to sell their home or assets without consent;
- Forcing someone to change the ownership of a property or make changes to wills or lasting power of attorneys through deception, coercion or undue influence; and
- Phishing or online scams.
From the above, it is clear that professionals, whether they are lawyers, healthcare personnel and accountants, to name some, have a front-line role to play in identifying instances of financial abuse.
Family Members as Potential Abusers
The community of social workers and social work practitioners that I work with often witness instances of these subtle and not-so-subtle examples. Many of these acts of financial abuse will be perpetrated by close family members such as the son or daughter who has not left home or has moved back into the family home to live with the elderly parents. There is often an unequal balance in financial power between the adult child with perhaps little or no income and the parent with a home, reasonable savings and maybe even a pension and other government grants.
The familial and emotional bonds are often too strong to withstand the demands and when the child has succeeded in extracting funds or property from the parent there will then be a reluctance to tell anyone about what has happened and certainly a sense of shame that they have allowed it to happen. With due respect to the good work accomplished by the government thus far, it is the current position of the Ministry of Social and Family Development (MSF) that family members are the primary bulwarks against financial abuse of the vulnerable adults.10Minister Desmond Lee states in his Closing Speech at the second reading of the Vulnerable Adults Bill that “There are also some other levers in place to deal with financial abuse against vulnerable adults. In cases where vulnerable adults have been exploited by care-givers, we often do see other family members, such as children, stepping forward to put a firm stop to this. If need be, our social work agencies can nudge next-of-kin to act. So, the family can take action to resolve financial abuse within their own families”, see the full parliamentary report at ‘https://sprs.parl.gov.sg/search/fullreport?sittingdate=18-05-2018’ However, as I have illustrated above, the subtle and insidious nature of elder financial abuse may necessitate a more interventionist posture.
When Might the Abuse Occur?
There are no definitive methods to identify financial abuse, but there is a general observable set of non-exhaustive trigger points that allow and perhaps facilitate abuse. Oftentimes, a change in circumstances that provide a potential abuser with an opportunity and motivation to carry out the financial abuse. For example:
- Sale of parents’ residential home to fund nursing home fees and other related medical bills;
- Caring for an elderly and physically frail parent;
- Parent who are isolated and overly dependent;
- Parents who want to amend their testamentary dispositions to provide for the caregiver child; or
- Parent making lifetime gifts to their children to help them meet rising costs of living.
Such trigger events should alert the lawyer to the potential for abuse.
Other warning signs of elderly financial abuse may also include:
- Legal transactions that are proposed, guided or undertaken at the instigation of the beneficiary who is not the client;
- Client shifting lawyers from their long-standing legal practitioners to someone new, or utilising the services of a lawyer who acts for the person benefiting from the transaction; and
- The client disposing of almost all the person’s assets or disposing of significant assets for nominal or no consideration.
Why Lawyers Should be Concerned
Many allegations of financial abuses involving vulnerable persons often begin with a legal transaction like conveyancing facilitated by anticipatory decision-making legal instruments such as a lasting power of attorney (LPA), powers of attorney (POA), testamentary instruments like wills and codicils, and deputyship.
Lawyers should be sensitive to the risk of elder financial abuse and be aware of good practices that may minimise its occurrence. The abovementioned legal instruments are designed to protect the vulnerable and it would be perverse if the abuse of such protection tools continues unabated.
Also, losses to the elderly victim cannot simply be measured in financial terms. Some of the losses may be capital assets, but these same assets are also income-generators – so the loss is actually compounded.
There are also no straightforward remedies enabling financial restitution in the event of financial abuse. The victim will likely be out of pocket in pursuing a recovery of the monetary losses. Unsupported by the Government, there may be a corresponding lack of resources, stamina, and willpower by the elderly victims to pursue civil remedies.
How can we take up the interim challenge of acting as gatekeepers to lessen the prospects of elder financial abuse? What are the systemic challenges to the way we practice, and the way we charge clients that need to change to increase such protections?
Challenges for Lawyers
There is an inherent conflict between respecting the autonomy of the individual and their right to persist with existing family dynamics versus official protection, a conflict that will probably receive more attention until a greater number of elderly people have been abused.
The interpretation of capacity and our understanding of autonomy is also fraught with difficulties. Section 3 to 5 of the MCA provides a statutory definition of capacity and how to guidelines for evaluation, yet we need to consider whether capacity is a strict cognitive test or whether it is, at least in part, determined by the individual and their relationships. Relationships can enable and disable – we need to appreciate that people are situated within complex relationships that can support or obstruct their ability to decide, to act, and to secure their own interests.
Meanwhile, there are cost pressures and an even greater responsibility for legal professionals to advise effectively. It is not sufficient to simply take instructions and prepare a legal document anymore; apart from being familiar with the legislation and the nuanced issues of capacity, the legal advisors have to pay attention to the client’s needs and circumstances, to consider the family dynamics and weigh the permutations of what can probably go wrong and right. The lawyer must advise in a manner that is forward-thinking yet conservative, effectively cautious and as an enabler in the affairs of the elderly client.
All the above makes the role of the legal practitioner extremely challenging as good advice comes with a time premium and cost. The legal practitioners are tasked to be more efficient by streamlining workflows and with appropriate delegation of work, probably within a well-defined corporate structure so that a sizable volume of clients can be effectively processed. Yet this is an intensely personable area of legal practice that does not lend itself to easy delegation. The estate planning and protection work of the elderly client have only become more diverse and complicated, involving different areas of practice that mirrors the complex lives of our clients.
Lawyers as Gatekeepers
As a historically noble and well-respected profession, lawyers must certainly be interested in actions that can minimise the prospects of elder financial abuse. There is a helpful article published in January 2019 in the Law Gazette by Alvin Chen and Stella Chen which provided a checklist on good practices11See the article by Alvin Chen and Stella Chen, ‘https://lawgazette.com.sg/practice/compass/risk-factors-in-interviewing-and-advising-elderly-clients-the-5cs/’ when working with elderly clients. For ease of reference, they promoted a hygiene check of the following 5Cs:
- Identify who is the client;
- Watch out for conflicts of interest;
- Maintain client’s confidentiality;
- Checking the client’s mental capacity; and
- Practice effective communication.
We can also take reference from a best practice guide on how to minimise elderly financial abuse published in September 2020 by the Law Council of Australia12This publication can be found at, ‘https://www.lawcouncil.asn.au/publicassets/1cf330dc-96fc-ea11-9434-005056be13b5/Best%20practice%20guide%20for%20legal%20practitioners%20in%20relation%20to%20elder%20financial%20abuse.pdf’ which provides an even more comprehensive checklist when handling elderly clients.
When drafting LPAs for elderly clients, lawyers can provide advice on the inclusion of safeguards. This can take the form of making the donee(s) be accountable to a third party (such as a lawyer, accountant, or another trusted family member). A clause that requires the appointed donee to seek legal advice prior to activating the powers to manage financial matters may reduce “unwitting” or “innocent” financial abuses by those who may not appreciate or understand the scope of their powers (e.g. a limitation to make inter vivos gifts off the donor’s estate).
That said, there is still a limit to what a lawyer can do when he or she act to the best of their capability. Professor Tang Hang Wu succinctly (and presciently) stated in his own Law Gazette feature on prevention of financial elder abuse nearly 11 years ago (which still stands true today), an excerpt reproduced below:
“A lawyer who detects financial elder abuse will simply have discharged his or her duties by advising the elder or refusing to act in the particular transaction. Thus, the role of the lawyer is merely prophylactic in nature – he or she merely prevents elder abuse in this particular instance. However, there is nothing to stop the abuser from trying his or her luck to structure an identical transaction with another solicitor who may be less scrupulous or meticulous in detecting financial elder abuse. If the abuser is able to find such a lawyer, then the abuser may ultimately get away with financial elder abuse.”13See Prof Tang Hang Wu’s Law Gazette Feature titled “The Prevention of Elder Abuse”, at ‘https://v1.lawgazette.com.sg/2010-05/feature3.htm’
It is important, necessary, and urgent that the Government’s agenda of making the execution of instruments such as LPAs and deputyship more convenient and accessible to all must be accompanied by an equally compelling determination to create safeguards and a set of tools to allow for more convenient and accessible methods of seeking redress in the form of financial remedies for elderly victims of financial abuse. For example, there should be easier methods to reverse banking transactions for inter vivos transactions induced through scams, fraud, or undue influence.
When I first commenced my legal training, practice was confined to a straitjacket of lawyers’ subjects such as contract, company, tort, trusts, conveyancing, criminal, maritime and arbitration. Client care, including vulnerable client care, was not an area of focus. If it is discussed at all, it is mainly limited to the business development context. This is why I find it extremely meaningful and satisfying to pioneer legal practice in this area in Singapore, even though the work can be technically and emotionally challenging.
The elderly client requires a multidisciplinary approach to ensure provision of appropriate levels of support and legal advice that are mapped to the desired outcomes. The logical conclusion must be a collaborative approach involving other professionals such as healthcare professionals, social workers and practitioners and counsellors, driven by stakeholder-organisations like the government, non-profits and charities.
As people of our parents’ generation step gently into their golden years, we must remain vested in ensuring that comprehensive legal services remain accessible to them, and by extension to their caregivers as well. For it is clients such as these who all the more need the support, empowerment and protection of the system.
|↑2||See the full parliamentary report at, ‘https://sprs.parl.gov.sg/search/fullreport?sittingdate=18-05-2018’|
|↑3||According to a Bloomberg article, In 2016, the total resale value of Singapore’s HDB apartments was estimated to be more than S$400 billion. See ‘https://www.bloomberg.com/news/articles/2020-07-08/behind-the-design-of-singapore-s-low-cost-housing#:~:text=In%202016%2C%20the%20total%20resale,community%20center%20and%20a%20library’|
|↑4||See then NMP Asst Prof Mahdev Mohan’s parliamentary question, ‘https://www.msf.gov.sg/media-room/Pages/clarifications-on-Lasting-Power-of-Attorneys.aspx’|
|↑5||See Theresa Tan, ‘Breaking the silence on financial abuse of elders’, The Straits Times, 6 February 2016. The Singapore Government has said that this aspect will be re-examined later after more experience is gained from tackling physical and emotional abuse, see Closing Speech by Minister Desmond Lee at the Second Reading of the Vulnerable Adults Bill (18 May 2018), para 19.|
|↑6||Act No. 27 of 2018. This Act was brought into force on 19 December 2018.|
|↑7||Section 2 of the VAA.|
|↑8||See also Para 160 of Goh Yng Yng Karen (executrix of the estate of Liew Khoon Fong (alias Liew Fong), deceased) v Goh Yong Chiang Kelvin (2021) 3 SLR 896; (2020) SGHC 195 where Ang Cheng Hock Justice expressly stated how there is currently no settled definition of “elder abuse” and inferred the conscious intention of Parliament during debates on the Vulnerable Adults Bill (Bill No 20/2018) to “focus its legislation on physical and emotional abuse to the exclusion of financial abuse”.|
|↑9||See Para 113 and 114 of the keynote speech by Indranee Rajah, ‘https://www.mlaw.gov.sg/news/speeches/keynote-address-by-indranee-rajah-sc-second-minister-for-law-family-conference-2018’|
|↑10||Minister Desmond Lee states in his Closing Speech at the second reading of the Vulnerable Adults Bill that “There are also some other levers in place to deal with financial abuse against vulnerable adults. In cases where vulnerable adults have been exploited by care-givers, we often do see other family members, such as children, stepping forward to put a firm stop to this. If need be, our social work agencies can nudge next-of-kin to act. So, the family can take action to resolve financial abuse within their own families”, see the full parliamentary report at ‘https://sprs.parl.gov.sg/search/fullreport?sittingdate=18-05-2018’|
|↑11||See the article by Alvin Chen and Stella Chen, ‘https://lawgazette.com.sg/practice/compass/risk-factors-in-interviewing-and-advising-elderly-clients-the-5cs/’|
|↑12||This publication can be found at, ‘https://www.lawcouncil.asn.au/publicassets/1cf330dc-96fc-ea11-9434-005056be13b5/Best%20practice%20guide%20for%20legal%20practitioners%20in%20relation%20to%20elder%20financial%20abuse.pdf’|
|↑13||See Prof Tang Hang Wu’s Law Gazette Feature titled “The Prevention of Elder Abuse”, at ‘https://v1.lawgazette.com.sg/2010-05/feature3.htm’|