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What Is The Law of Elderly Fraud?

Posted: Tuesday, 7 May 2024 @ 09:11

What is the Law of Elderly Fraud?

If there was a Lasting Powers of Attorneys(LPA) you need to consider the obligations connected with the LPA attorney who must:

  •         follow any instructions the donor included in the LPA
  •         consider any preferences the donor included in the LPA
  •         help the donor make their own decisions as much as they can
  •         make any decisions in the donor’s best interests
  •         respect their human and civil rights.

The general rule for deputies and attorneys about giving gifts is simple: apart from some exceptions, the law says you must not make gifts from the person’s estate.  

For attorneys acting under a registered property and financial affairs LPA, these exceptions are set out in section 12(2) of the MCA 2005.

To count as an exception, the gift must satisfy all three points below. 

It must be:

1. given on a customary occasion for making gifts within families or among friends and associates (for example, births, birthdays, weddings or civil partnerships, Christmas, Eid, Diwali, Hanukkah and Chinese new year)

2. to someone related or connected to the person or (if not a person) to a charity the person supported or might have supported

3. of reasonable value, taking into account the circumstances in each case and, in particular, the size of the person’s estate.

The Law of Presumed Undue Influence

One of the key legal issues is there is a presumption of undue influence for lifetime gifts where there is:

  • a relationship of trust and confidence is assumed in some incidences, namely that between parent and child, solicitor and client, medical practitioner and patient or trustee and beneficiary;


  • a transaction is of such a size or nature that it calls for an explanation.

Once these requirements have been satisfied, the burden of proof shifts to the person seeking to uphold the transaction to show that on the balance of probabilities the transaction was entered in to by the influenced person independently and free from influence.

If undue influence is proved, then the transaction is declared void. A presumption of influence in certain categories of relationship, for reasons of public policy,  there is a legal  presumption of influence (as opposed to merely an evidential one). 

A significant gift made by an elderly and/or vulnerable individual, particularly where that gift is substantial in the context of the individual’s other assets is often a warning in these types of cases.

The law presumes that the person in the dominant position may have taken advantage of the other person’s vulnerability or dependence.(ascendancy)  

The person claiming to be influenced does not need to prove the undue influence; they merely need to prove the existence of the relationship and that it was one of trust and confidence.