You might assume that your will or estate plan ensures that your money will go to your intended heirs. But inheritance theft is an insidious and underreported problem that can cost families dearly. And since inheritance thieves are usually family members, the fallout often is not only about money, but also family ties.
Here is what you need to know about the problem of inheritance theft, and how you can protect yourself and your heirs from inheritance thieves.
What Is Inheritance Theft?
Inheritance theft can take many forms, ranging from manipulating the person’s wishes while they’re still alive, to theft and embezzlement that occurs after the death.
For blended families, this issue is a common problem, even if the estate in question isn’t worth millions. According to John K. Ross IV, an estate planning and elder law attorney based in Texas, “90% of all contested probate cases are between a surviving spouse and the deceased spouse’s children.”
Of course, this is not the only way that someone other than the intended heir can get hold of an inheritance. “It goes from very small to very big,” Ross says. “I can’t tell you how many times I’ve heard that Dad’s watch or Mom’s engagement ring has simply gone ‘missing’ after the funeral.”
But Ross has seen much greater inheritance theft occur. It happens when someone with access to the funds gets sticky fingers: “Inheritance thieves will often rationalize what they are doing by claiming they need a little bit of money out of the funds because of how much they are doing for the estate. But a little money inevitably becomes a lot of money because they don’t realize how deep they are until they have taken hundreds of thousands of dollars.”
While this is, of course, illegal, this kind of inheritance theft often goes unreported and unchallenged because the heir has to use their own funds to pay the legal fees to prove malfeasance.
Forms of Inheritance Hijacking
Even without direct access to funds, unscrupulous family members can use other methods to get a piece of an estate. The following tactics are common when a relative is vulnerable to manipulation:
Undocumented Loans
Family members who borrowed money from a relative might insist that such loans were gifts after the relative’s death. If there is no loan document in place, the heirs have no recourse to get the money back from the borrower on behalf of the estate. The only way to protect an estate from this kind of hijacking is to insist on loan documents whenever a large amount of money changes hands.
Denigration of Fellow Heirs
Rather than focus on the bonds between each other, heirs are sometimes more focused on what they can do to increase their piece of the estate pie. An heir might lie about the other heirs, claiming that one sibling can’t be trusted with money, while another has more than he needs. This kind of denigration can persuade an elderly parent to change their will in favor of the lying heir. Unfortunately, it is difficult for an heir who is being denigrated to protect themselves from this kind of insidious hijacking—in part because the denigrated heir rarely knows it has happened until after it is too late.
Forging or Destroying Documents
In some cases, a family member or advisor might prepare a fake will or a fake amendment to a real will, giving the forger a bigger slice of the inheritance pie. For instance, imagine a parent who leaves most of his estate to a disabled child who cannot take care of herself. If the older sibling of the disabled child were to destroy the will, then the parent would be considered to have died intestate, and the money would be distributed equally between the siblings.
How to Protect Your Heirs
The best method of protecting your wishes is through a well-written estate plan. Such a plan includes a detailed will, a power of attorney, and trusts for your assets. For each of these documents, you will need to consult a well-vetted estate attorney (see below for tips on finding an estate attorney) to make sure your wishes are legally binding.
Here are the particular concerns you will need to consider for each of these documents.
Your Will
This is the center of your estate plan, and you can make your will as detailed as you like, so that the distribution of your property can follow your exact wishes. You can also change your will anytime you like, and it’s prudent to review it every few years to make sure that everything is still up to date.
One of the important choices you will have to make when drawing up your will is who will act as your executor. This is the person who will handle the logistical details of your estate after your death. Since this person will be managing your assets until they are distributed to your heirs, you must choose someone whom you trust to follow your wishes. An untrustworthy executor is in a position where they could embezzle funds after your death.
Most people name their spouse, a close friend, or family member as their executor. However, it’s possible to hire an executor who will be paid from your estate, and, in fact, lawyers will often perform executor services. If you have an already-contentious family situation, hiring an executor can ensure an unbiased third party is handling your estate after your death.
Financial Power of Attorney
If you were to become mentally or physically incapacitated, you would need someone to act as your power of attorney to make financial decisions on your behalf. As with choosing an executor, you need to trust that this individual will follow your wishes, since a power of attorney has control over your assets.
Without a power of attorney in place, the courts will step in to appoint what’s known as a conservator should you become incapacitated. This process is lengthy and expensive, and you have no choice in whom the court appoints as your conservator, which is why choosing your power of attorney is so important.
Trusts
In the simplest terms, a trust is a financial agreement among three parties: the grantor, who creates and funds the trust; the beneficiary, who receives the assets from the trust; and the trustee, who has a fiduciary duty to responsibly manage the assets in the trust.
Creating a trust for your assets can be an excellent way to make sure that money is available for beneficiaries unable to handle money on their own—such as minor children. In addition, certain types of trusts can provide a surviving spouse with income during their lifetime, while leaving the assets themselves to additional beneficiaries, such as adult children, after the death of the surviving spouse.
It is vital that you choose a trustee who you know will respect their fiduciary duty, since the trustee has control over the assets in your trust. Requiring two co-trustees and asking for dual signatures on all financial paperwork can help ensure that no one abuses their power as a trustee.
Actions to Protect Your Heirs
In addition to the well-written estate plan and the careful choice of anyone who will be in control of your assets, there are several other actions you can take to protect your heirs from inheritance theft:
1. Appoint two executors to your estate. Make one of your two executors a non-family professional, such as a trust company, a financial planner, or an attorney. This lowers the likelihood that your executor will take advantage of their position.
2. Discuss your estate plan with the entire family. Telling the whole clan—ideally at the same time—what your plans are will make it more difficult for any one family member to try to circumvent your wishes later. Talking about money with family can be sticky, but it can prevent a great deal of resentment and mismatched expectations.
3. Put a disclosure requirement in your will. If your will requires your executor to disclose all details about estate expenses, assets, and financial transfers, it will be more difficult for an untrustworthy executor to hide misappropriation or theft.
How to Protect Yourself From Inheritance Theft
What if you are an heir who fears your inheritance has been stolen or is in danger of being hijacked by someone else? This is a very difficult situation, since it can be both expensive to fight an inheritance thief in the courts and difficult to prove that your inheritance has been hijacked.
According to Valerie Rind, author of the book Gold Diggers and Deadbeat Dads, the first thing you need to do is “consult a lawyer who specializes in trusts and estate work. The attorney who handled your brother’s DUI probably isn’t the best choice.” That’s because an estate attorney will know the specifics to look for in proving your case, and will have plenty of experience in dealing with inheritance shenanigans.
It’s also important to know your rights, says Rind. While the laws vary from state to state, there are certain rights that you can count on as an heir or beneficiary. In particular, as an heir, you have the right to receive information about the will and the estate, if you request it from the executor. If the executor is trying to keep you in the dark, that is a major red flag.
In addition, you also have the right to an accounting of the estate or the trust. The accounting is a detailed report of income, expenses, and distributions from the estate or trust, explains Rind. The accounting should be in writing, and should provide supporting papers such as receipts or cancelled checks. These supporting papers should match the information on the accounting that the executor or trustee provides.
Be Prepared to Spend Money on Legal Fees
The good news is that most estate attorneys will not charge you a fee for your initial consultation. During this meeting, your prospective attorney will ask you questions about your family, financial situation, and goals. The attorney also will let you know how much you can expect to pay for your specific estate plan.
In general, attorneys ask for a flat fee to prepare your estate plan, rather than charging you on an hourly basis. The average flat fee for a relatively simple estate plan is about $1,000-$1,200, although costs can range much higher for larger and more complex estates.
If you are an heir fighting inheritance theft, you will likely have to pay your attorney on an hourly basis, since you will be engaged in an ongoing legal dispute. U.S. law firms’ hourly rates averaged $245 per hour in 2018. The average heir may experience sticker shock when hearing how much they may have to pay to fight for their inheritance.
Legal Fees for a Trust
When a trust is involved, Rind also cautions beleaguered heirs that trusts can cause increased financial headaches, because “the trust itself is a separate ‘person’ and might need its own attorney. The legal fees get paid out of the trust’s assets, so you could wind up spending the money you are fighting over.”
This is why it’s important to determine ahead of time if the fight over your loved one’s money or property will be worth the time, energy, and legal fees you will have to put into it. Legal fees have decimated plenty of estates when heirs fight long court battles over what belongs to whom.
Tips on Finding an Estate Attorney
Whether you are planning your own estate or you are fighting for your inheritance, you may feel overwhelmed when trying to find the right estate attorney for your needs. But according to Ross, you can start this search the way you start any search for a service provider: online.
“Go to your prospective attorney’s website and see what they claim to specialize in,” Ross says. “If the site says ‘estate planning, elder law, and 18-wheeler accidents,’ that’s not the right attorney for you.” Ross recommends finding an attorney who specializes in estate planning.
Questions to Ask Your New Attorney
Once you have requested an initial meeting, there are a few more questions to ask. Specifically, Ross recommends you ask the following before hiring your new lawyer:
Does my specific estate need make up the majority of your practice?
Even within estate law, there is still more specialization, from marital trusts to charitable giving to special needs trusts. The more experience your lawyer has with your specific needs, the better they will be able to help you.
Can you tell me how this could go wrong?
Ross states that many drafting attorneys don’t necessarily think about wills in terms of how families act in reality. If you are writing a will, you want an attorney who is willing to remove the rose-colored glasses. Your attorney should look at ways your heirs or family members could exploit vague language or legal loopholes. If you are fighting inheritance theft, you want your attorney to be up front with you about your likelihood of success.
Do you offer formal updating and maintenance services?
It’s easy to look at estate planning as a one-and-done process, and many attorneys view it that way, as well. But attorneys are starting to offer annual or semiannual check-ins regarding your estate planning, for a nominal fee. With this service, your lawyer will let you know of any changes in the law or estate planning practices. They will ask you if there have been any major changes in your life that affect your estate plan. Finding an attorney who offers this kind of service can protect you from keeping an out-of-date will in place past its usefulness.
Rest in Peace of Mind
Fighting against an inheritance thief is both exhausting and expensive. It will not necessarily bring back the money that was taken. This is why the best defense against inheritance theft is a good offense:
- Prepare a well-written estate plan.
- Appoint multiple individuals as executors, trustees, and powers of attorney as a safeguard against untrustworthy behavior.
- Be open with your entire family about your wishes.
If you do all of these things, you can feel much more secure in the knowledge that your wishes will be carried out after you are gone.
Do you have an aging parent? Are you concerned about your own well-being as you get older?
View Comments (290)
This is a very informative article. Inheritance is one of the reasons why families argue with each other. If you feel that the will is not correct you must act and dispute the will with the help of a lawyer. 1st thing you need to do is seek legal advice and lawyer up to protect you. This very thing happened to me. I won the case and all is good up to now.
Hi there, I enjoy reading through your post. I wanted to write a little comment to support you.
I live in Oklahoma City & my 2 nieces and cop husband came into my family and moved my 86 year old mother off her estate where me and my 2 little sisters did not have their address for 2 years until my mother passed away and then nieces husband calls me with the news of my mothers passing and then he provides me with his address.Only to find out they acquired the keys to my mothers house and found her estate plan which was already shown to me since im the oldest and nieces brought in a new attorney in the last 2 years of my mothers life which gave 2 nieces everything and disinherited us 3 adopted kids.Cannot find legal representation in Oklahoma City now going on 16 years .Im the only disabled person in our family on SSI.
Is there a time limit on someone looking into inheritance theft from a gold digging step mom who took every penny my dad owned even trust funds he had set up for his 3 children were empty when he died! He had many life insurance policies and said had some in each of our names that we never got. Though we were good she was broke she bought brand new 60 ,000 dollar cars for her kids sent everyone of her grandchildren to college in England , continued to travel world wide on cruises and live a lavish life in the million dollar home my dad had bought her in palm beach Florida! He told each one of us kids we would be well taken care of for life and ended up with nothing. They were only married 8 years and my mom and him married 50 some years! He started his own company here in Wisconsin and walked out of there with over 5 million dollars plus money he already had accrued! She let him die like a pauper and refused to let us kids take her to Dr for a second opinion when we saw what she was doing with him ! Even took her to court and hired an attorney and he was shocked when he found out the judge wouldn’t let us take him to an oncologist because she was eating he had lung cancer but had never taken him to an oncologist! My heart has never recovered from what this woman did to my dad and family and the guilt I carry within me is devestating that we couldn’t help our dad! She didn’t even come up here to his funeral and threatened the funeral director up here she would have him creamated asap if we had an autopsy on him and wouldn’t give funeral director up here permission! I would love to see this woman be questioned about her actions and be able to find peace for my dad.
My father passed away 16 months ago prior to his passing. He had contacted me to let me know that he had made sure I would be fine and that I would not have to worry about anything in the future part of the plans that he had made was that money he left to his sister The sister he had had no contact with for 10 years but as soon as she found out he had inherited money from his deceased wife decided she would show up and have him buy her a car and do this and do that he asked her to take 20,000 out of the account she received and hand it to me she promised him he would do that And up until recently I was told that she would in fact she had put money into an account at Wells Fargo and showed me that she had done that now she has decided since there was no paperwork and no proof and that she did not make that promise that she did not have to do it And was not going to, and I was just hit with information, not too long ago, which my aunt is well aware of that one of the accounts that my father was supposed to receive apparently was swindled out of his deceased wife prior to her death and my father was not informed of that either so I am sitting here with a disability that is going to kill me within the next four years with the money. My father intended for me to have been taken and controlled or stolen out right the one account that I was given suddenly now I’m not able to get it until back. Taxes are paid on that account as well as his military pension benefits in the SSDI , when I did my investigation to find out exactly how much taxes would have been taken out of those things I was told point-blank, but neither the SSDI or the military pension benefits would have been taxed if there were any fees or penalties to come out of his income it would have come out prior to him receiving that money and the account that is being withheld for six months past the date that it was signed over to me that money is still being controlled by the executor of the estate who has told me that she cannot hand it over until my fathers, outstanding tax, debt or paid. I’ve been told that was not true, but she is insisting that it is, and for some reason determined not to have that money over what are my options
Hi Karen, I'm sorry for your loss and what has happened to your father and yourself. We are going through a similar situation with inheritance theft from the Executor of our parents' wills. The part about back taxes having to be paid before heirs can receive anything is true, not sure what if any exemptions there are with the IRS that could be made in your situation. From what I've read and researched is that all Federal taxes must be paid before anyone, or any other debtor is paid. This isn't the answer you were hoping for but .... if the Executor spent any of the estate money on herself or any other debtors, or even retaining an attorney, and has not paid the back taxes, then she is personally responsible to pay those back taxes. FYI. I'm not an attorney but just wanted to leave you with another way of looking to get justice from a deceitful executor.
Somebody out here to do the same thing like it sound like hey it's only a move to Florida
hello i keep getting emails about an inheritance from the royal scottish bank but i fear they are scamming me ive saved all the emails and they want me to send a reactivation fee of 780.00 they also say im entitled to 3 estates as well i believe the lawyer isd trying to scam me it does sound like it may be the real deal,, can i send u the emails if this ends up being promising i could really use the upper hand they say its 5,600,000.000
That's the address
Hi Lizabeth – A good place to start may be contacting a legal professional. Good luck!
I WOULD REALLY LIKE TO KNOW MORE ABOUT THIS SUBJECT AND I REALLY NEED AN ADVANCED, EXPERIENCED, WISE PERSON TO CONFIDE IN ABOUT SOME OF MY CONCERNS AND THE OBSTACLES I HAVE ENCOUNTERED AND STILL AM HAVING TO ENDURE 4 YEARS LATER FROM WHEN MY FATHER PASSED.
THANK YOU
HANNAH ASHLEY WELLER THE FIRST
my father hadnt updated his will before he got sick and passed away. it happened very quickly and i wasnt expecting him to pass away we didnt think he was as sick as he was. he hasnt been with his ex-wife for many years nor has his other children even bothered to stay in contact with him or help him when he was very ill. none of them could care less. i am his daughter i moved in with him i cooked for him and cleaned the house as well as i was the one that took care of him when he couldnt take care of himself. his passing was extremely fast he was taken to the hospital by ambulance and went right into surgery and within hours he passed away because his infection was so bad it turned septic. he hasnt even been gone 12 hours and my half brother and his wife walked right into his house and started going thru his belongings as well as his mother my step mother also walked in like she owned it. they made arrangements for him to be cremated and for a funeral service without even including me. the one thats been there taking care of him over these last years when nobody else would! my step mother and i do not get along she dislikes me and shes pushing me out of the picture. shes went as far as changing the locks on me and not allowing me in his house that i have lived in with my father. my father actually payed his exwife off by buying her a brand new car right off the lot and it had to be exactly what she wanted. he also had to drive it all the way down east because she stole his brand new truck and took off out east to live. my father didnt know he was as sick as he was and hadnt gotten around to rewrite his will obviously because he wasnt expecting to die. my step mother and my half siblings her children with my father have taken over everything even though nobody cared about him while he was alive. what can i do to stop these money hungry looters from taking my fathers house, vehicle, harley davison motorcycle all of his belongings as well as his savings. i am the only one that was there for him and these strangers think that they deserve everything. how can i stop this?
Hi Amber, first, I'm not a lawyer. I'm only relating to you through similar experience and to hopefully save you the grief and sleepiness nights that come with this. Take a deep breath first, then, look up in your state courts the probate division. Look at the forms available for "application for executor/personal Rep. " - as a daughter you can apply. If the step-mother was separated from your father and living in another state, you would have jurisdiction over your father's estate. Fill out all the forms for "personal Rep" , You must do this immediately. You are asking for informal probate - Letters from the County Clerk that authorize you to administer the estate. Do everything it says to do. You need to publish in a local paper a notice to creditors and anyone who has a claim against the estate. This gives them 4 months to make a claim. You then start gathering assets of estate. This would be all things in your father's personal name. If his real property were in a living trust that would not pass through probate. When you get your letters of personal Rep. If these people continue to try and take things you can have them arrested. Follow the Courts rules for Probate.
I need to find representation to contest my mother’s estate. Her and her mother was from Reims, France and married an American soldier after WW2. The farm where they both resided was in part my mother’s after the death of her parents. I had been told at an early age that if I left the principal alone that I could live off of the interest. She had told me many times and on her deathbed that my brother and I would split the marital assets and that I would receive her personal account. My dad quickly remarried after her death and then his new wife sent me an E-mail telling me that he had passed 2 days previous. I was never invited to a funeral and have heard nothing from her since. I suspect this to be fraudulent and intended to deceive me of this money.
In addition, there are other legal matters at hand that need to be investigated. I am seeking investigators from another state because my father was a high ranking military member with ties to law enforcement and other divisions (that I suspect he has used in the past to create events that could use later to imply guilt in crimes that have not yet been brought before me and could have already sent an ex-boyfriend to prison for 14 years on a charge I don't think we committed but was finished for this purpose.) that can control information and outcomes of these inquiries in most counties as well as other states. I know this sound hard to believe but once you spend a few minutes looking into the people involved and the situation at hand you will see that this is on solid ground.
I suspected there could be foul play in 2015 and made mention to an attorney then and once again sought representation in 2020 to no avail (no return calls, rejection).
I also believe he has contacted every possible agency that could help me with a fabricated or elaborate story as to why I should not be believed or helped.
Any information you have that could lead me to people that can help me would be greatly appreciated.
Thank you.