Undue Influence in Australia 2025: Legal Risks & How to Protect Yourself

In 2025, the concept of undue influence remains a critical issue in Australian law—impacting everything from inheritance disputes to business contracts. With the value of estates rising and a growing emphasis on financial elder abuse, understanding undue influence is more important than ever for Australians looking to protect their assets and relationships.

What Is Undue Influence?

Undue influence occurs when one party uses their power or position to manipulate another into making decisions against their true wishes, particularly in legal or financial matters. This can render contracts, wills, or gifts invalid if proven in court. Typical scenarios involve elderly Australians, high-value estates, or situations with a clear power imbalance.

Some common contexts include:

• Wills and Estates: A caregiver persuades an elderly individual to change their will in their favour.
• Business Transactions: A dominant business partner pressures another to sign an unfavourable agreement.
• Financial Arrangements: Family members or advisors influencing someone to transfer assets or take out loans.

How the Law Handles Undue Influence in 2025

Australian courts continue to treat undue influence seriously, especially in the context of a rapidly ageing population. In 2025, several state governments have introduced or strengthened legislation targeting financial elder abuse, reflecting a broader push for consumer protection. Notably:

• NSW and Victoria have updated their succession laws, making it easier to challenge wills on the grounds of undue influence.
• Royal Commission into Aged Care Quality and Safety recommendations are influencing stricter scrutiny of power of attorney arrangements and financial transactions involving vulnerable people.
• New guidelines for legal and financial professionals require enhanced record-keeping and client verification, aiming to prevent coercion and document genuine intent.

To establish undue influence in court, the influenced party (or their representatives) must generally show:

• A relationship of trust or dependence existed.
• There was an imbalance of power.
• The outcome unfairly benefited the influencer.
• The influenced party would not have acted as they did without the undue pressure.

Recent cases highlight that courts are increasingly willing to set aside transactions or wills where any hint of manipulation is found—especially in cases involving dementia, isolation, or language barriers.

Red Flags and How to Protect Yourself

Spotting undue influence early is essential, especially as Australians become more aware of financial abuse risks. Here are some warning signs and best practices:

• Sudden changes to wills, superannuation beneficiaries, or property titles.
• A new or previously uninvolved person becoming heavily involved in someone’s financial or legal affairs.
• Unusual financial transactions or unexplained asset transfers.
• The individual making decisions appears confused, isolated, or under stress.

To safeguard against undue influence:

• Always seek independent legal or financial advice before major decisions.
• Document the decision-making process—keep records of meetings, witnesses, and written statements.
• Encourage open discussions with trusted family or advisors, particularly when updating wills or signing contracts.
• For professionals, follow the latest industry guidelines for verifying client intent and capacity.

Case Study: The Cost of Overlooking Undue Influence

In 2024, a widely reported NSW case involved an elderly woman who changed her will to leave her entire estate to a neighbour, excluding her children. The children challenged the will, citing evidence of isolation and the neighbour’s control over her finances. The court found undue influence had occurred, ruling the will invalid and restoring the previous version. This case underscores how courts balance autonomy with protection—and the real financial stakes involved.

Looking Ahead

As Australia’s population ages and intergenerational wealth transfers accelerate, the risks of undue influence are only set to grow. Proactive awareness and robust safeguards are the best defence—whether you’re managing your own affairs or looking out for loved ones.