Scams, AI complaints and a beds crisis - elder law has never been more complex or more consequential
When a complaint landed on Theresa Donnelly's desk recently, something was immediately off. The language was fluent, the structure plausible, but the tell was unmistakable to a trained eye.
"I could tell right away it was AI generated," said Donnelly, Perpetual Guardian’s head of legal and a recognised expert in wills, trusts, estates and elder law based in Auckland. "It was just obvious on its face. But part of the challenge there is to go, well okay, I see all this AI output. What does it mean, and what's behind it? Is there a real person behind it who deserves a real and appropriate answer?"
Despite clients using AI to sometimes produce dubious results, Donnelly is experienced enough not to throw out the baby with the bathwater.
Once she peeled back the generated text to find the human issue underneath, it turned out there was no real substance to the grievance. The person got a proper response from Donnelly anyway.
Strip away the AI-generated text and there's always a human being underneath - that's an instinct Donnelly keeps returning to. But finding the real question inside the noise is getting harder. Elder law practitioners are navigating a confluence of pressures: clients wielding tools they don't fully understand, a demographic wave that shows no sign of cresting, care costs that can outrun even careful planning, and a legal landscape where the grounds for challenging a will are quietly expanding. The technology is new. The human stakes are not.
For practitioners in the wills and estates space, one of the more closely watched developments is a cause of action that has a long history in English courts but has yet to be formally established in New Zealand: fraudulent calumny.
Donnelly, a recognised expert in wills, trusts, estates and elder law who presents regularly for the New Zealand Law Society and other professional bodies, laid out how the traditional grounds for challenging a will have always worked: incapacity, undue influence, and failure to understand the consequences of what was drafted. The emerging ground sits alongside all three.
"Fraudulent calumny is not to do with capacity, it's not to do with undue influence. It's where the person was lied to by someone who, knowing it was a lie, told that to them so that they would do something, so that they would rely on the lie."
A recent New Zealand case saw the ground argued for the first time in local courts. It did not succeed on that particular limb - the person spreading false information genuinely believed her own version of events, which meant the fraudulent intent required by the test was absent. The court found for the claimant on testamentary promises grounds instead. But the argument having been put before a New Zealand court at all is significant, and Donnelly expects it to be tested further in the years ahead.
"Litigators will be happy," she said.
For estates and trust practitioners, the implication is direct: the grounds on which a will can be attacked are widening, and getting planning documents right matters more than ever. The costs of litigation in this area are, as Donnelly put it, such that an entire estate can be consumed before any beneficiary sees a cent.
"If you've got a lawyer for the estate, you've got a lawyer for one of the children, and another lawyer for another client who is not aligned with the first," she said, "you'll quickly lose $300,000 and some change."
Within PG Legal, Perpetual Guardian's in-house specialist legal team, AI is being used seriously and with some discipline. The team works from a closed-source tool integrated with LexisNexis Protégé, chosen specifically because reliability and low hallucination rates matter more than speed when you are constructing legal arguments from case law. Because it sits within a secured legal research environment, the outputs can be checked back against source material rather than treated as stand-alone answers.
It also allows some of the research and drafting process to happen in the same place, which helps reduce the stop-start of moving between multiple systems. The time savings are substantial. A research task that once took a full day can now be done in an hour, and Donnelly is direct about what that buys back.
"It means that we can then focus on the more important work, like the advice, and really listening to our clients and what they really need," she said. "Having that relationship, knowing what their needs are, and being able to spend the time completely focused on that space gives better results."
That time dividend has had a visible effect on what junior staff can accomplish. A recent law graduate at the firm completed roughly 200 wills in his first few months - work that Donnelly said would typically take five years to accumulate in a private firm handling trusts and estates.
"He wasn't needing to spend all the time on the research," she said. "He was able to get stuck in and do the work, the wills and the probates and the drafting of retirements and appointments of trustees and get into some early bits of litigation."
Whether clients will eventually expect lower fees because AI has reduced the time spent on routine tasks is a question the profession has not yet had to fully answer in New Zealand. Donnelly thinks the conversation is coming.
"We need to have an answer to that," she said. "The answer is that in some cases there will be some transactional work that is able to be cheaper because it can be done at a lower level and done faster. But where the real metal meets the road, the really important stuff, there just isn't actually that substitute for that advisory [side] by experienced lawyers."
There is also a risk running in the opposite direction: clients using AI carelessly with material they should be protecting.
"Please don't take litigation-privileged legal advice and then sticking it out to the world on AI [platforms]," she said, "because that's going to cause issues, particularly if you've got a case coming up in terms of losing that privilege."
Technology has introduced a subtler problem for practitioners taking instructions from elderly clients: the question of who is actually in the room.
Donnelly has recently delivered a paper on spotting capacity, duress and undue influence in drafting. When instructions arrive via a child's email address, or a client appears on a video call, the first principle of client care (who is instructing you) becomes genuinely difficult to satisfy.
"[If I have the filter on in a video call] you can't see that there might be someone standing over my shoulder telling me what I'm to say to you," she said. "Who are you getting your instructions from? This is becoming an increasingly fraught question for practitioners."
Donnelly pointed also to the informal financial arrangements that spring up around elderly parents and that can create serious legal problems later. Banks, she said, sometimes encourage joint accounts as an easier alternative to properly formalised enduring powers of attorney.
"The banks… are saying, oh, it's too hard to do things under an enduring power of attorney. Why don't you just have a joint bank account with your daughter? Well, that's great for while mum's alive, but probably the siblings aren't going to be very happy when it [the account] passes by survivorship when mum dies and it doesn't hit the will."
The scam risk for elderly New Zealanders runs alongside all of this. Donnelly described fraudulent messages mimicking police infringement notices and parcel delivery services, convincing enough to catch people who live alone and have no one to ask.
"I'm not 88 and living alone," she said. "I can ask my partner… but [for elderly people with little outside contact] who do you ask and how do you know?"
Perpetual Guardian holds around 110 property manager appointments at any one time, over which Donnelly have oversight. This gives Perpetual Guardian a unique insight into elder law issues from the ground up. What she sees increasingly is complexity: multi-jurisdictional property, blended families with competing interests, and asset plans that were made in good faith but have since broken down.
One of the most pointed examples she gave involved aged care costs. A son wanted a deluxe facility for his mother: a licence to occupy priced at $750,000, weekly care fees of $1,500 or more in Auckland, additional charges on top of that, and a 30% depreciation hit on the licence value when it was eventually returned. Perpetual Guardian, acting as property manager, declined to proceed because the funding was not adequate.
"We're doing the maths with families," Donnelly said, "and we're saying, well, if you decide on this ultra option for mum, she's going to have to die in nine months because that's what her funds are going to allow."
Nine months later mum was still alive. Had she moved into the deluxe option, her funds would have run dry.
The aged care sector is largely self-regulating, and a review has identified a shortage of 20,000 to 30,000 beds in the next 10 to 15 years. The cost pressures this creates fall heavily on families, and on the professionals who advise them.
Donnelly's own situation mirrors the wider demographic picture. Her grandmother, now 97, has been on New Zealand superannuation since age 60. Her mother is retired. She has two children. Approximately one in five working-age New Zealanders is now supporting someone of non-working age.
"We often, particularly the women in our society, are referred to as the sandwich generation," she said, "because we are having to provide care for older family members at the same time as caring for kids who've got more and more complex needs."
New Zealand adds 25,000 people to superannuation each year, and the exits do not match the entrants.
Against this backdrop, Donnelly's message on asset planning is consistent. Every adult New Zealander, she said, should have a will and an enduring power of attorney prepared by a professional. The savings from a DIY approach are illusory.
Donnelly urges anyone reviewing their planning document to consider:
The Law Commission has recently finalised a review of adult decision-making capacity legislation and is recommending a single, broad capacity test to replace multiple existing tests. It has also proposed a voluntary register of enduring powers of attorney. Donnelly is cautious about whether a register would meaningfully reduce misuse, and notes that property manager orders, unlike attorney appointments, are already reviewed by the court.
"People are afraid of fees in this space," she said, "but it's showing more and more that having the independent is actually worth its weight in gold because it means that issues between the parties can be resolved. They may not be happy about it, but they're hearing it from an independent. They know that person doesn't have skin in the game, and so they're prepared to take that advice."
Donnelly chairs the New Zealand Law Society's Elder Law Conference this year and is using that platform to make a case for younger lawyers to consider the field. She believes AI, used properly, makes the work more attractive rather than less, and that the volume and complexity of Elder Law matters will only grow.
"People assume that elder law is about poor, frail people who are subject to financial abuse," she said. "But it can also be about rich, frail people who are subject to elder abuse. People's circumstances are just so much more complex."
Protégé - Legal AI built for real legal work. Powered by the industry’s most trusted legal content, Protégé brings legal research, drafting and analysis together in one seamless AI-powered platform. Every workflow is connected, every output is informed and every citation is grounded in authoritative sources.
This article was produced in partnership with LexisNexis.
