How to Prove Inheritance Theft

Proving inheritance theft requires identifying how the theft occurred: whether through a fraudulent will, trust, power of attorney, joint account, deed, taking personal property or actions of a personal representative. Each scenario requires gathering specific evidence and pursuing targeted legal strategies.

Theft by a Will

To recover an inheritance stolen by a fraudulent will, you would have to successfully contest the will and have it set aside by the court. To contest a will, it’s not enough to disagree with it. You would have to establish one of the following grounds:

• Technical Failure. There were technical errors in how the will was made.
• Pressure and Manipulation. Someone pressured and manipulated the person into making the will.
• Diminished Mental Capacity. The person suffered from cognitive decline that interfered with his ability to understand the will.
• Forgery. The will is a fake.
• Fraud. The person made the will because someone has been lying to him.

To learn more about contesting a will, read our guide to will contests.

Theft by a Trust

To prove inheritance theft by a trust, you would have to prove that the person who made the trust did not have the mental capacity to make the trust and was unduly influenced into making it. In some cases, you would also allege that the person making the trust was defrauded into making it or was forced into making it. You can even try to prove that the trust is a forgery, or that it was not made correctly.

Theft by a Power of Attorney

For example, if inheritance theft is committed by a person holding a financial power of attorney and committed such abuse either before or after the death of the account owner, the personal representative can file a discovery or turn over (or a similar or equivalent) proceeding, requesting the court to direct the person with possession to turn over the funds. Money in the bank account is easily traceable for as long as it is not laundered.

Proving abuse of the financial power of attorney after the account owner’s death is easy. It is simply showing the transaction done through a financial power of attorney and the death certificate proving the date of death of the account owner. Any transaction conducted after the death of the principal using the financial power of attorney is considered illegal.

Proving abuse of the financial power of attorney before the account owner’s death is a little bit more complex. You must show that the withdrawals made in the bank account were not made for the benefit of the principal or given as a gift by the principal to the agent.

Theft by a Joint Account

When the allegation of inheritance theft involves  joint account, you have three different pathways to proving inheritance theft:

• The person who actually put the money into the account was being unduly influenced to do so or did not have the capacity to sign the beneficiary designation
• The account was solely for the convenience of the person who put the money into the account
• The account was changed without authorization, either by computer or through a power of attorney

Banking law will apply in recovering this inheritance. Your lawyer will review signature cards and bank records to see whether these joint accounts are accounts for convenience.

Proving lack of capacity and being unduly influenced into changing the beneficiary designation are related. A combination of undue influence and fraud or misrepresentation, precipitated by the owner’s weakened mental state. This is usually proven by the discovery of the account owner’s medical records.

In some states such as New York, if the allegation of inheritance theft involves the account owner designating someone as a joint account owner, you may be able to invalidate this designation by showing that the joint account owner was included in the bank account for the original account owner’s convenience only. This is proven by showing that all withdrawals in the bank account during the lifetime of the account owner were made for the benefit only of the original account owner.

Money can be stolen by abusing a financial power of attorney, either before or after the account holder’s death. There is inheritance theft when undue influence is exerted upon the account holder to change the designated beneficiary prior to death.

Theft by a Personal Representative

Sometimes the personal representative (executor) commits inheritance theft. They can do so by

• Outright transferring estate property to themselves
• Not making distributions to the other beneficiaries, only to themselves or family members aligned with them
• Skimming off estate funds and charging their personal expenses to the estate

If the personal representative commits inheritance theft any interested person such as a beneficiary or creditor can file a petition requesting the removal of the personal representative and the nomination of a successor. You can also request that the personal representative be restrained from committing further acts, pending resolution of your petition. If found guilty, you can file a surcharge action, holding the personal representative liable for damages caused to the estate due to the inheritance theft. Depending on the state, the personal representative’s violation of fiduciary duty may be penalized with punitive damages.

Theft by a Deed

Real estate and vehicles can be stolen through the execution of deeds. The real estate owner could have been unduly influenced into deeding the property to someone else. Generally, if the property, such as real estate, is transferable by deed, most deeds are invalidated by proving a combination of undue influence and fraud or misrepresentation. Undue influence occurs when the owner was coerced into executing the deed by the beneficiary. It normally happens when the owner is in a weakened state or physically reliant on the beneficiary for his daily activities. This is proven through the owner’s medical records, showing the medication the owner was taking and the owner’s health status at the time the deed was executed. When the owner is suffering from a mind-debilitating disease, is taking mind-altering medication, or is physically reliant on the beneficiary for his activities, this can bolster the allegation that the owner was unduly influenced into executing the deed of transfer.

Theft by Taking Personal Property

Personal property can be physically stolen before or after the owner’s death. This is particularly more difficult to prove since stolen personal property can easily and immediately be sold so the thief would not be caught with possession of it. Stolen personal property is a little bit more complicated to prove because control over personal property usually gives rise to the presumption that that person who controls it has ownership, unless the personal property is titled, such as an automobile or a valuable painting.

Some More Tips

If you suspect that your inheritance has been stolen, immediately conduct your own due diligence and consult with an inheritance recovery attorney. Some places to start the investigation are:

• Tax records to see whether title to property has changed via deed or sale, and whether any liens have been placed on real property
• Bank, brokerage, and retirement account statements to see if there have been unusually large withdrawals
• Changes in beneficiary designations on insurance policies, annuities, brokerage accounts, and retirement accounts, to see if there are recent replacements made
• Bank accounts to see if another joint account holder has been added
• Receipts and invoices for legal expenses, notary fees, or other estate planning services
• Federal and state tax returns to determine if there had been gifts to others
• Examination of personal property in drawers, closets, and safety deposit boxes to see if jewelry, coins, bonds, cash, and other collectibles are missing.

When looking into inheritance theft, it is important to be mindful of the statute of limitations, and to the ability to recapture the inheritance. The sooner to the time of death the inheritance was stolen, the easier it is to avoid statute of limitations issues and the bigger chance you have that the money is still there for you to recover.

Because of the many ways inheritance theft can be committed, how proving inheritance theft requires a careful evaluation and a targeted intervention by an experienced estate litigation attorney. Should you need assistance in the evaluation of your case, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].