Did a decedent inform you about what they were leaving you as an inheritance, but when the time came for you to receive it, the amount distributed was drastically lower than what you’d expected?
Are you certain a decedent had executed a will or trust during their lifetime, but the document cannot be found?
Is an executor/administrator being extra-secretive about estate activities and finances? Is the trustee mismanaging trust assets or charging excessive trustee fees?
Did a family member emotionally manipulate an elderly decedent to be left an inheritance?
Was property gifted away to someone during the decedent’s life at a time when the decedent was incompetent or was susceptible to undue influence?
What you may gather from these examples is that inheritance theft can take many forms, and it can be committed by anyone from the decedent’s family members and estate/trust representatives to power of attorney agents, caregivers and other third parties. The worst part? It can be difficult to detect unless you have an experienced probate attorney by your side who is knowledgeable about the signs of inheritance theft.
If you believe you are a victim of inheritance theft, it is crucial that you take swift legal action to recover your inheritance, because once the executor/administrator or trustee makes distributions, your inheritance may be more difficult (although not impossible) to retrieve.
Whether the suspected inheritance theft was blatant or hidden, it will need to be proven to the court, first by petition and then at a court hearing. Proving inheritance theft requires a thorough analysis of financial and estate planning documents, and on occasion, a full investigation, which may include contacting financial institutions and gathering witness testimony.
We know this process can be overwhelming, especially if you are still grieving the loss of your loved one. But on a positive note, there is always help. Your attorney can handle the complex aspects of your case to keep your involvement in the matter minimal. Additionally, they can file the necessary petitions and documents on your behalf and persuasively argue your case at the subsequent court hearing.
What Is Inheritance Theft?
Inheritance theft is exactly what it sounds like. It occurs when an individual or institution steals money or property that a decedent intended or the law required to go to someone else.
This type of misconduct can occur when the original owner of the assets was alive, or after they’ve died. The most common perpetrators of inheritance theft are the decedent’s relatives, estate or trust representatives or third parties.
The types of assets that are stolen as a result of inheritance theft can vary from case to case. Some cases will involve tangible/physical assets, such as artwork, jewelry or real property (which generally is stolen through a type of fraud known as deed fraud). Other cases will involve assets with beneficiary designations, such as bank accounts, retirement accounts and life insurance death benefits. And lastly, there will be a handful of cases involving just liquid assets.
Signs of Inheritance Theft
As we mentioned previously, it is not always easy to detect inheritance theft because the bad actors who are stealing are likely doing everything in their power to hide their misdeeds.
Additionally, estate representatives and trustees often are the ones committing inheritance theft, but since they also are the ones who are in charge of the decedent’s assets and with providing you information about them, it can make inheritance theft even harder to uncover.
By learning the signs of inheritance theft, you not only will be able to detect if something is awry with your inheritance but you will be able to better protect your inheritance as well.
In the following subsections, we discuss the most common forms of inheritance theft, but keep in mind that there are countless ways in which inheritance theft can occur — more ways than we possibly could include on this list. Therefore, it is a good idea to work with an attorney if you believe inheritance theft could have occurred. Your attorney can investigate whether inheritance theft occurred, and if it seems like it did, determine the best way to move forward.
Destroying, Discarding or Forging Estate Planning Documents
Suppose that a decedent created a will or trust from which one of their direct heirs (e.g., their adult child) was excluded. Upset at their lack of a future inheritance, this heir resorts to getting rid of the will or trust document by burning it or hiding it so that it can never be located by others.
Now, there is no estate planning document to provide instructions regarding to whom the decedent’s assets should be distributed, so the court defaults to appointing an administrator of the estate (instead of an executor) to distribute the decedent’s assets in accordance with the law of intestate succession.
Intestate succession laws provide an inheritance to the closest heirs of a decedent, which generally include their surviving spouse and adult children. It’s easy to see why the heir thought it was in their best interest to destroy the will or trust.
Another way people could steal an inheritance is by falsifying the decedent’s signature on estate planning documents. For example, they could draft a trust amendment that favors them and falsify the decedent’s signature to execute it.
While the examples mentioned in this section could lead to an inheritance being stolen, they can be difficult to prove, because in some instances there will be no estate plan on which to base your allegations, and in other instances, you likely will need to hire a handwriting expert to confirm that a forgery had occurred.
That said, probate attorneys deal with these types of challenging cases every day, so they will know exactly what to do to give you the best chance of winning your case.
Undue Influence
Undue influence occurs when a person exerts excessive pressure on another person in an effort to get them to override their own free will. As an example, a niece or nephew may move in with their relative and isolate them from their family and friends in order to unduly influence them into leaving them a greater inheritance in their will.
Most victims of undue influence are elderly adults with diminished mental capacity, because such persons may not be capable of sensing when another person is taking advantage of them, or people who are otherwise infirm and dependent upon their abusers for care and support.
In the context of inheritance theft, undue influence is a common tactic bad actors employ to either directly steal from the decedent when they are alive (which affects their future beneficiaries’ inheritances) or indirectly steal from their beneficiaries by securing themselves a place in the decedent’s will or trust, despite the decedent not having wanted them to receive an inheritance.
Undue influence also can potentially lead to property disputes. For instance, a vulnerable elder may be unduly influenced into signing a deed gifting their home to someone they never intended to receive their home.
Proving undue influence can be somewhat complicated, but if there is evidence to back up your claim, you can try to contest a will or trust or another contract (such as a deed) on that ground.
Fraud
Suppose that an elderly decedent had employed a live-in caregiver to tend to their daily needs because their family members were unavailable to take on that responsibility. The caregiver had started to notice that the decedent’s mental capacity was declining, and she saw an opportunity to take advantage of his compromised cognitive state by having him sign a deed that conveyed his home to her.
To convince the decedent to sign over his home, the caregiver presented the decedent with a document that the caretaker described as a power of attorney document. In reality, however, the document was a deed transferring the decedent’s home to the caregiver.
When a person is intentionally deceived, and it causes them to act in a way they otherwise would not have, it is fraud. In the aforementioned case, the type of fraud perpetrated was deed fraud, but fraud can take many forms, and it, too, is a valid ground for contesting a will or trust.
Misappropriation or Mismanagement of Estate or Trust Assets
Executors/administrators and trustees are bound to certain fiduciary duties, which require them to always act in the best interests of the beneficiaries when making estate- or trust-related decisions. Unfortunately, many estate and trust representatives don’t take this responsibility seriously.
Suppose that, aside from managing a trust, the trustee was working on opening their own business. They had fallen short of collecting the funds they needed for their business to work, so they decided to borrow funds from the trust, believing they would be able to return the funds as soon as their business was off the ground. To their dismay, their business never took off, so they were unable to return the funds that they borrowed to the trust.
It is generally against a trustee’s fiduciary duties to borrow from a trust for their own personal needs, and it can be a form of inheritance theft, especially if the borrowed funds are not returned. But this is not the only way a misappropriation or mismanagement of estate or trust assets can occur.
As an example, an executor could charge excessive fees, or they could hire third-party professionals to work on legitimate administrative tasks, but then report to estate beneficiaries that the professionals charged more than they actually did and pocket the extra funds for themselves.
In some instances, estate or trust assets may have been misappropriated by a beneficiary or third party before the decedent died. Perhaps they stole the decedent’s money or valuable items from their home, which would equate to inheritance theft, since the money and items were included in the decedent’s will/trust and would have been distributed had they not been stolen.
When an executor/administrator or trustee mismanages or misappropriates estate or trust assets, it is considered executor/trustee misconduct, which is a form of fiduciary misconduct. Proving that such misconduct occurred can be challenging, because it will require a thorough review of estate and trust accountings. Many beneficiaries ask their probate attorney to conduct this review on their behalf, since they know what red flags to look for.
On the other hand, if a beneficiary or third party misappropriated assets from a decedent, the executor/administrator or trustee likely will bring a claim against them to try to recover what was stolen. If their claim is successfully proven, and the bad actor was a beneficiary, the beneficiary potentially could be disinherited from the estate.
Conservator/Power of Attorney Abuse
Many people sign a document known as a power of attorney to grant another person the authority to manage either their financial and legal affairs or their health care in the event they become incapacitated in the future, though this is not the only purpose for which powers of attorney are signed. For a power of attorney to be valid, it must be signed by a principal who is mentally competent.
If a person becomes mentally incompetent, but failed to sign a power of attorney before becoming incompetent, then their only option for having another person manage their personal and financial affairs would be a conservator. To establish a conservatorship, one of their loved ones or the court will have to file a conservatorship petition and attend a court hearing.
Once a general attorney-in-fact or conservator of the estate has the authority to act on behalf of the incapacitated person, they generally will have full access to that person’s assets, which they only can use for that person’s benefit or to provide themselves with a reasonable fee. However, because incapacitated persons may not be able to detect if they are being financially abused, attorneys-in-fact and conservators of the estate could steal from them, believing they would be none the wiser. When attorneys-in-fact resort to this type of wrongful conduct, it is considered power of attorney abuse. When conservators do it, it’s considered conservatorship abuse.
While these dishonest fiduciaries may not get caught during the principal or conservatee’s lifetime, there’s a possibility they’ll be caught once the principal or conservatee has died by the executor/administrator of their estate or the trustee of their trust after they notice assets to be missing. If they are caught, the estate or trust representative will need to file a claim against them with the court in order to recover the assets that were stolen so they can be distributed to beneficiaries and/or heirs.
Like other signs of inheritance theft, stealing by an attorney-in-fact or conservator can be difficult to prove without the help of a skilled probate attorney, who has many tools in their toolbox to help them uncover more information about the financial abuse that may have occurred.
Inheritance Theft Laws in California
Inheritance theft laws in California can vary based on the severity of the misconduct and on the cumulative value of the assets that were stolen. And sometimes whether the offending party was a fiduciary, a beneficiary/heir or a third party can also play a role.
In most cases of inheritance theft, if it is proven that someone stole assets from an estate or trust, they will be asked to return those assets. Additionally, they may be asked to pay damages and the injured party’s attorney’s fees and costs. If the person from whom they stole was an elder or if the offending party’s misdeeds were particularly egregious, they could even be asked to pay double damages, treble damages (i.e., triple damages) or punitive damages (which go beyond merely compensating the party that was a victim of theft).
Executors/administrators and trustees who commit inheritance theft may not only have to return the assets they stole, but they may also be removed and surcharged if beneficiaries bring a fiduciary misconduct claim seeking these remedies.
Beneficiaries or heirs who commit inheritance theft generally will be asked to return the assets they stole, but they could also be disinherited, meaning that they no longer would have an interest in the estate or trust. If the inheritance theft involved a will or trust, and a claim is subsequently brought to contest the will or contest the trust, the will or trust could be invalidated, requiring for the relevant assets to be distributed to the decedent’s heirs in accordance with the laws of intestate succession.
If you are someone who has been accused of inheritance theft, hiring an experienced probate attorney to defend you is a must, because there’s always the possibility you also could be charged criminally. It’s a good idea for anyone pursuing an inheritance theft claim to have an attorney as well. Inheritance theft cases can be complex. By having an attorney on your team who can carry out an investigation on your behalf, you will have a greater chance at success.
Is Inheritance Theft a Crime?
Technically, any form of theft is a crime, but whether a person is criminally charged for inheritance theft generally will depend on the nature of the misdeed and on the amount that was stolen. That said, inheritance theft cases are usually heard in the probate court first, and frequently such disputes do not result in criminal charges being brought. However, it is certainly possible that a criminal claim may be brought against the alleged perpetrator of the theft, particularly with larger thefts where liability is clear. As an example, if there was a misappropriation of trust funds by the trustee that resulted in millions being stolen from the trust, it is possible the trustee could face criminal charges, in addition to being asked to return the stolen property, and being removed and surcharged.
What Is the Statute of Limitations for Inheritance Theft?
There is no hard and fast inheritance theft statute of limitations. Rather, the statute of limitations will depend on the type of inheritance theft that was committed.
For example, inheritance theft that occurred as a result of a beneficiary or heir forging or destroying trust documents, or unduly influencing or perpetrating fraud against the decedent with the intention of getting them to change their trust, may have to be litigated as a trust contest, which generally must be brought within 120 days from the date of a Notification by Trustee being served on the heirs and beneficiaries.
If you are looking to file a fiduciary misconduct claim based on information you obtained from a trust accounting, the claim may need to be brought within three years of the disclosure, or sooner if the trust document shortens the statute of limitations period.
How to Prove Inheritance Theft
Proving inheritance theft isn’t always easy. There are many steps involved, and often, getting to the bottom of how much was stolen, how it was stolen, and when it was stolen will require an investigation that can entail speaking to witnesses, examining financial documents and more. Many people don’t have the time or wherewithal to tackle this process on their own, so they hire a probate attorney to do it for them.
In the following subsections, we go over the steps for proving inheritance theft. While more steps may be required than what are listed, this is a general overview of what you can expect.
Gather Relevant Documentation
When trying to prove inheritance theft, the best place to start is by reviewing the financial documents of the decedent, or of their estate or trust (i.e., estate and trust accountings). If the alleged misdeeds involve their will or trust, you may also wish to closely examine those.
Suppose that you suspect a decedent’s former attorney-in-fact to have siphoned money from their bank accounts. For you, uncovering the inheritance theft may be as simple as tracking down the decedent’s bank statements and reviewing them for unusually large or frequent withdrawals.
Proving that an executor or trust committed inheritance theft may be more challenging, because you will need to analyze the accountings they provided you, which they may have falsified to hide their misdeeds. When an estate or trust representative fails to provide accountings or provides accountings that don’t add up, it is within your rights as an interested party to petition the court to either compel the representative to provide an accounting or challenge the accounting that they provided and to request supporting documentation.
If the inheritance theft involves a will or trust, and a beneficiary or heir having used unsavory tactics to secure themselves a greater inheritance, you can review the will or trust for red flags, such as the decedent having made last-minute changes to the document or having excluded family members with whom they were close. Probate attorneys are dealing with wills and trusts daily, so they generally can notice almost immediately if anything is amiss.
Talk to the Decedent’s Family and Friends
Perhaps a relative had moved in with the decedent toward the end of their life under the guise of caring for them, but their true intentions had been to unduly influence the decedent into adding them to their will. In such a situation, it’s likely one or more of the decedent’s family or friends knew what was going on.
Perhaps the decedent had owned valuable family heirlooms, which their relatives had remembered from visiting their home in the past, but upon the decedent’s death, these heirlooms were nowhere to be found. A family member or friend may be able to not only confirm the existence of the heirlooms, but also provide information about which of their visitors might have had an opportunity to steal these items.
While not all decedents will have had family members and friends with whom they were close, if they did, they can be a helpful resource in helping you get to the bottom of the inheritance theft. And if it comes down to it, they may even be able to testify in court about what they had observed to support your claim.
Take Legal Action to Recover Inheritance
Once you have gathered evidence of the alleged inheritance theft, it is time to take legal action to recover your inheritance. If you previously hired a probate attorney to help you investigate your inheritance theft claim, they can take the process from here.
The date of the court hearing will be set once the court receives your relevant petitions, which should include specific details about the inheritance theft, including your name and contact information, the alleged wrongdoer(s) and their contact information, and the reasons for your claim.
After filing your petition, your attorney can assist you in acquiring additional evidence in support of your claims through a process called discovery. All the evidence you uncover can be used by your attorney to strike a settlement deal with the opposing party through mediation, which can help save you considerable time, as well as money in litigation costs. If you are not able to settle your case, a qualified probate attorney can help you put on your case at trial and, if your claim is successfully proven, you generally will be able to recover the part of your inheritance that was stolen and possibly even damages and your attorney’s fees and costs.
Inheritance Theft Stories
Inheritance theft cases are Keystone’s bread and butter. We’ve summarized the most interesting ones below.
To view our whole catalog of case studies, most of which deal with inheritance theft, click here.
Pseudo Caregivers Steal Millions From Elderly Doctor
We had a client who came to us seeking help after her brother, who at one time had been a highly regarded ophthalmologist, suffered an untimely death. The brother had been suffering from mental illness for years, so when he randomly ran into a couple who offered to be his caregivers, alarm bells didn’t go off in his head. Rather, he allowed them to move into his home after just a few days of knowing them.
The brother was believed to have died with minimal assets besides his home. Our client wanted to be appointed as administrator of his estate, so our lawyers helped get her appointed, but what she found next was that he actually owned assets worth more than $60 million. She suspected that her brother’s so-called caregivers had been stealing money and property from him.
From here, the case escalated dramatically. Not only had one of the caregivers made the brother sign a power of attorney document that provided him access to everything from the brother’s medical records to financial accounts, but the two “caregivers” had also been drugging the brother with mind-altering substances that were actively exacerbating his mental and physical health issues.
In the end, our attorneys convinced the court to hire what is known as a third-party “receiver” to track down the assets that were missing from the brother’s estate. The receiver managed to recover around $2 million from the brother’s financial abusers, after which we helped the client reach a settlement deal that she regarded as a resounding victory, since it required her brother’s abusers to pay an additional $1 million in damages.
Read our in-depth case study to learn more about the case.
Trustee Uses Trust to Fund His Own Lifestyle
In this case, we represented the younger of two sons who had been disinherited from his parents’ trust as a result of his older brother financially abusing their elderly father, who was the surviving settlor of a trust. The financially abusive son was acting as trustee of the trust without ever having been appointed to the role, and he not only used his de facto authority to cut his brother out of the trust by unduly influencing his father to execute three amendments to that effect, but also to encumber the trust’s real properties with unnecessary loans.
The father ostensibly had not been of sound enough mind to resist the older brother’s influence, but both he and the deceased settlor (his wife) had wanted both their sons to inherit equal amounts of the trust. We brought a breach of trust claim against the older brother, since he had been acting as the de facto trustee, but many challenging circumstances, including the unwillingness of the older brother and father to cooperate, delayed our client from being paid the settlement sum he was owed.
Unfortunately, both the older brother and father passed away before the terms of the settlement agreement could be carried out, causing the older brother’s 50% interest in the trust to pass to his children. Once the older brother’s surviving spouse accounted for trust assets, it came to light how far her husband’s theft had gone to fund her family’s lifestyle, and her children agreed to surrender a portion of their inheritance to cover their father’s surcharge. Additionally, we helped our client get appointed as trustee of his parents’ trust and secure a 100% interest in the trust’s most valuable property.
Read our in-depth case study to learn more about this case.
Elder Unduly Influenced Into Giving Assets to “Sugar Daddy Abuser”
This was a trust contest case that was far from ordinary. Typically, these types of cases involve bringing a contest because the settlor lacked the mental competence to create a trust. However, in this instance, the settlor had not only been mentally competent, but he’d had a successful legal career as an attorney before retiring. Moreover, a reputable estate planning firm in Los Angeles had drafted his estate plan.
Adding to the complexity of this case, our clients had been beneficiaries under the previous version of the decedent’s trust, giving them the standing to challenge the new version, but they were no longer related to the decedent due to a divorce. Given the challenges involved, our attorneys knew it would not be an easy task to have the trust invalidated.
The decedent’s life had turned upside down after meeting a young boyfriend through a “sugar baby” dating site, which allows for wealthy “sugar daddies” to make financial arrangements with “sugar babies” for companionship. The decedent recently had gotten divorced from his longtime husband and was feeling lonely as a result. The sugar baby saw an opportunity to emotionally manipulate the decedent into giving him more and more of his assets because of how desperate he was to have a companion, and he often would withhold his love from the decedent to get what he wanted.
Things kept escalating between the two until eventually the sugar baby unduly influenced the decedent to go to his estate planning attorney to disinherit his former beneficiaries (our clients) and name him as the sole beneficiary and trustee. Soon after, the decedent died under suspicious circumstances.
Our attorneys knew that it was going to be an uphill battle to prove why the trust should be invalidated in favor of their clients, since they lost any relation they had to the decedent when he divorced. Still, they carried out a far-reaching discovery, which uncovered that the sugar baby had been using the dating site on which he met the decedent to exploit multiple men. When this information was presented at mediation, the sugar baby immediately changed his tune; he was ready to settle.
In the end, our attorneys helped invalidate the new trust on the grounds of undue influence and elder financial abuse, and secured a generous settlement sum for the clients.
Read our in-depth case study to learn more about this case.
FAQs About Stolen Inheritances
Didn’t find the answers you were looking for in the article? Check out our FAQs. If you still can’t find them, give our attorneys a call to request a free consultation.
I need a contingency attorney for inheritance theft. Do attorneys work on a contingency basis for inheritance theft cases?
This generally will depend on the firm, the nature of the case, and how much money is at stake.
As an example, if clients have a weak case or if the amount of money that’s at stake is minimal, it’s possible they may have a hard time finding a firm that is willing to work on a contingency basis. On the other hand, if clients have a strong case and there are millions of dollars at stake, a firm may find it worth the risk to litigate the case on a contingency basis.
That said, even if clients have to cover attorney’s fees and costs up front, there is a chance they can recover these costs if they successfully prove their claim, especially in inheritance theft cases.
The best way to find out whether a firm will work with you on a contingency basis is to discuss your case with them.
I suspect my inheritance was stolen, but I can’t prove it. What should I do?
If you cannot find proof that someone else’s actions resulted in all or a portion of your inheritance being stolen, your best bet would be to discuss your concerns with a probate attorney, who can investigate your claim for you to help you determine whether any evidence exists to confirm your suspicions. Attorneys have the experience to notice clues you may have missed.
How can I protect my inheritance from inheritance theft?
The best way to protect your inheritance from inheritance theft is to play an active role in estate or trust administration and inspect any accounting documents you receive for anomalies and other red flags. If you have an attorney, this is something they can do on your behalf.
When you have an attorney in your corner, your inheritance will be better protected, because they will be able to tell right away if something is amiss with your inheritance and take the appropriate legal action to protect or recover it.
How do you recover an inheritance stolen by family?
You would go about recovering an inheritance stolen by a family member in the same way you would go about recovering any inheritance. If your concern is privacy or keeping a family member out of jail for their theft, then you may wish to handle the issue privately with them or in a mediation.
Think your inheritance was stolen? We can help you find out.
If you believe your inheritance was stolen, it is essential that you take action as soon as possible to recover it. Waiting too long could make your inheritance harder to recover.
Keystone attorneys work on inheritance theft cases day in and day out, and we have the experience to not only help you get your inheritance back, but also to get you damages. If you need to remove and surcharge an executor or trustee because of inheritance theft, we can help you with that, too.
We’d love to speak to you about your legal issues and how we can help resolve them. Call us today to request a free consultation.
