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How to Recognize Fraud in Estate Planning

estate planning

Estate planning allows people to make plans for the end of their life and ensure that their legacy lives on. But when money is involved, you can expect people to act in unusual ways. Some go so far as to commit fraud to get their hands on money they are not owed. Estate planning fraud can cause an individual’s entire estate to be wasted, leaving their loved ones with nothing.

It’s crucial that caretakers and loved ones of susceptible individuals know the warning signs of estate planning fraud. If your loved one has been a victim, call John H. Ruby & Associates at 502-373-8044 to set up a consultation immediately.

Types of Estate Planning Fraud

There are numerous ways an individual or agency can engage in estate planning fraud. Forgery is one blatant form of fraud that occurs when someone alters or completely fabricates documents to distribute assets to themselves or anyone other than the intended beneficiaries. 

Some individuals exert undue influence over the testator. This means using pressure, manipulation, threats, or coercion to get the testator to change their estate plan in a way that benefits the influencer. You may see this when a caregiver forbids a testator’s family to contact them or spend time with them.

People may also exploit individuals by taking advantage of their limited mental capacity. Those of advanced age or with dementia may be at significant risk of exploitation. Individuals can encourage a testator to create or edit documents in a way that benefits them. This is similar to exerting undue influence in several ways.

Once someone has passed, it’s still possible for fraud to occur. You should be able to trust the executor of your estate or the trustee of your trust to carry out your final plans as intended. Again, when people have access to money, they may act in cruel or calculated ways. Financial advisors can also engage in this type of fraud, although it’s often those closest to the testator who are guilty of asset mismanagement. 

When an executor, trustee, or financial advisor mishandles the estate, they can drain it without the intended beneficiaries finding out until it’s too late. This is very dangerous—while the court can order the fraudster to return the funds, there’s nothing the beneficiaries can do if the fraudster has already used the funds. In many cases, they are simply left without options.

Warning Signs

What warning signs can you look out for if you suspect estate planning fraud? Common indicators include:

  • Unexpected drastic changes: If a loved one suddenly makes massive changes to their estate plan, that could indicate that someone is interfering or encouraging them to make those changes.
  • Excessive time with one caretaker or family member: When someone suddenly becomes a loved one’s closest confidant, that may indicate that the new confidant does not have the best of intentions. However, it could also be completely innocent—it’s just something to watch.
  • Isolation: If a caretaker takes steps to isolate an individual from the rest of their family members and friends, it’s important to intervene.
  • Dementia, Alzheimer’s, or other conditions: Certain groups are at greater risk of exploitation than others. If your loved one is vulnerable, they may need extra care and oversight.
  • Unclear language in documents: Unclear or unprofessional language in documents may indicate that someone has made their own changes without the help of chosen financial advisors or attorneys.
  • Unexpected changes in the estate planning team: If a loved one suddenly brings in new financial advisors or other professionals, make sure to vet them carefully.

Get Help Early

The longer estate planning fraud goes on, the more likely it is to be irreversible. It is crucial to reach out to an attorney as soon as you suspect estate planning fraud. You can also reach out to Adult Protective Services to report possible abuse.

Reach Out to John H. Ruby & Associates Today

We know how hard it is to see a loved one be mistreated or taken advantage of. Let us help you protect their best interests. To schedule your free consultation now, call us at 502-373-8044 or reach out online. We’ll listen to your concerns and help you find a path forward.