Spending Mum’s money

Posted on February 15th, 2017

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spending money mum A recent case in the Supreme Court (Lindsay v Arnison [2017] NSWSC 41) highlights a need for family members to take seriously the requirement to keep proper financial records when helping aged parents pay bills and operate their accounts.

 

In this case, one sister accused another sister (Ms A) of failing to account properly for their mother’s money in her lifetime and after her death.  The mother’s accounts showed regular withdrawals of money and other expenses which were said by the Judge not to be usual for an 80 year old woman. Ms A sought to argue that her approach to her mother’s finances was appropriate.

However, she had not kept good accounting records.  The Judge remarked that when Ms A operated her mother’s bank account, she did so as her mother’s agent whether she was acting as a formally appointed attorney or her informally appointed agent.  He stated that in either case she was subject to a fiduciary duty to act in accordance with the instructions of her mother, and to not engage in transactions on her mother’s accounts for her own interests, or the interests of her family except with the freely given and fully informed consent of her mother.  The Judge also stated that the sister was entitled to a much more accurate, and independently verified, accounting in relation to her mother’s affairs than she had received to date.

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