What Is Inheritance Theft (and How to Protect Your Money)?
If you have money, property, or other assets that you wish to pass on after death, or if you are the recipient of an inheritance from a relative, you must ensure that everything is distributed according to the plan.
But often family conflicts complicate or completely disrupt the distribution of inheritance – and this can even escalate into a type of theft known as “inheritance theft” or “inheritance theft”, which can be charged as a misdemeanor or a crime. So what is it, and how can you protect your money?
What is inheritance seizure?
Inheritance theft can occur in a variety of ways :
- Theft, destruction or forgery of trusts or testaments.
- Coercion or the use of undue influence (part of which includes “over-persuasion” ) to persuade someone to change their will or trust.
- Theft, concealment or diversion of assets from property or for personal gain.
- Abuse of power of attorney .
- Charging excessive fees for services related to the performance of the duties of an executor or trustee.
- Marriage under false pretenses in order to obtain an inheritance.
While probate theft may be committed by professionals assisting in the planning or execution of an inheritance, it is more likely to occur within the family or among close guardians. Emotional manipulation is one common tactic and usually involves a family member hunting down someone’s assets in an attempt to get closer to that person, often doing them a favor. Similarly, family members may insult each other to persuade a person to redistribute their inheritance.
Please note that stealing assets from the elderly or falsifying documents related to finances is considered a form of elder abuse .
How to protect your assets from theft
First of all, start the estate planning process in advance and with the help of a lawyer who specializes in this area. An experienced lawyer will help you draft a competent inheritance planning agreement. Keep several sets of detailed records of everything related to your property, and clearly discuss your wishes with those involved.
You can also consider allocating assets in advance so that they are distributed the way you want, says Jason Porter, Senior Investment Manager at Scottish Heritage SG in the UK. This can prevent coercion or diversion, although you should work with a tax preparer to understand the impact of large gifts.
Again, since emotional manipulation among relatives is a more likely scenario than any professional theft or fraud, hiring lawyers and financial professionals who specialize in estate planning may be your best defense. You may also want to consider having multiple executors who are responsible for allocating your assets according to your real estate plan.
How to protect your inheritance
Let’s say you are an heir, and we assume that you have the best intentions to fulfill the wishes of a relative and be honest with the law. You may watch family members act strangely or flirt with a relative with whom they have had many conflicts. Financial abuse and exploitation — the mismanagement or misuse of money — can be difficult to spot, but warning signs can also include sudden changes in banking activity, large or unexplained withdrawals or transfers of assets, and unpaid bills.
The laws governing inheritance theft and penalties for violations vary by state, but if you suspect this is happening, a probate planning attorney or forensic accountant can help you resolve these issues. You can also report elder abuse to your state agency.