Family dinner /File

FINANCIAL exploitation and abuse of older Australians is becoming a big concern, especially as they are now living longer and very soon will be retiring with much wealth tied up in their superannuation funds.

"Older Australians are much more vulnerable to the long-term effects of financial abuse than younger people as they often will not be able to recoup losses at this later stage in life,'' Public Trustee Peter Whitehead said.

Worse still, he said, many of those who abused or exploited older people were loved members of the family.

"If the financial abuse has been caused by a family member either through power of attorney or the failure to pay back a loan, then many older parents will not confront their adult children for fear of retaliation which can even take the form of limited or no access to grandchildren, or losing contact with them.''

Mr Whitehead said a person is considered an older Australian on turning 55, when many were either retiring or planning to.

He said this milestone was the perfect opportunity to secure wealth and ensure it didn't go astray years down the track when the risk of mental or physical incapacity was greater.

He said people should appoint an attorney to manage their affairs, someone they trusted to make the right decision and look after their best interests.

A power of attorney is a document giving someone else the power to make decisions on your financial affairs.

You can pick a time when it can start, when it ends or you can make it enduring, Mr Whitehead said.

For example, if you decided to take an overseas trip that would have you out of the country for a long time, the person with the power of attorney could make decisions to protect and enhance your assets.

Mr Whitehead said you should make an enduring power of attorney once it was confirmed you were in the early stages of dementia or Alzheimer's Disease and it was irreversible.

Children given power of attorney should also be made aware of the penalties if they abused the trust.

Quite often children take what's not rightfully theirs because they think they deserve it, or they need it or the parent can afford it.

But even if a parent is in the nursing home or is just weeks away from death, the assets still can't be taken for the benefit of others.

Mr Whitehead said there was a danger in appointing someone to mind your estate who didn't have good asset experience and could make bad decisions.

Mr Whitehead said they should seek advice if they don't have these skills, or they may be tempted to spend the money on themselves, which is criminal as well as immoral.

An example of where children can abuse their parents' trust is if a child persuaded the parents to take out a reverse mortgage on the family home so they didn't have to wait until they died to get hold of the estate.

In this instance, said Mr Whitehead, the lawyer handling the paperwork should see the warning signals and look out for the parents.

"There was a recent case where the lawyer was held personally liable for work he did on a standard mortgage for an older person,'' he said.

"It was for about $200,000 to $300,000 and he didn't prevent the mortgage from being taken out even though all the warning signs were there,'' Mr Whitehead explained.