Trust and Estate Fraud and Elder Financial Abuse

Even a trusted trustee, executor, conservator or other fiduciary can embezzle money under certain circumstances. The money may be used to pay for personal expenses/lifestyle or otherwise. Accountings may not be done or may be falsified and supporting documents and records may be missing. There may be complex calculations concerning bequests/distributions in the will or trust instrument.

The deceased person may have died intestate or may not have left an updated will listing their assets, which situations may be made more complex if the deceased was secretive with family and advisors about their assets and those assets need to be identified. If no one knows about an asset except the fraudster, no one will notice when it is misappropriated. The deceased may have had a business while they were alive that was being defrauded. The monetary inflows and outflows of the business may need to be accurately determined as this will impact the value of the business/assets in the estate of the deceased.

A forensic accountant can compare the nature and amount of expenditures by a beneficiary presented to the trustee for reimbursement with the provisions of the trust instrument. A beneficiary can, under certain circumstances (e.g., having access/colluding with the trustee/executor), perpetrate a fraud upon a trust/estate.

A forensic accountant can determine if there is evidence of unauthorized use of funds of an elder person even if the access itself has been authorized. There may be issues of undue influence and/or control of the elder person which may also bring into question the competencies of the elder person and if there was really control or undue influence at all. This situation may be made more complex if there was mind-changing on the part of the elder person or mental capacity issues because, for example, this can impact intent.

An elder person or their business may have employed an individual who later stole from them, which may have taken place in multiple ways. In a business scenario, the totality of the fraud may have been so large that it caused the business to fail or to severely decline. The fraudster employee may blame the decline or failure of the business on the incompetence or lifestyle of the elder person or better new products in the market having become available which reduced the profitability of the business, etc. In another scenario, such circumstances may have actually existed and the unexplained monetary shortfall may be explained by those circumstances instead of by fraud. People do not always track or accurately recall just how much they may be spending on their lifestyle.

There may be business dealings between an individual and an elder person that did not work out or that resulted in monetary losses. The relationship between the individual and the elder may have soured for that, or for other reasons. Later, elder financial abuse may be alleged regarding the failed business dealings. Verbal authorizations may be presented as no authorizations having taken place at all. Just because someone is an elder person does not necessarily make them a victim of fraud when money has been lost – the elder status of a person may be manipulatively used to make false allegations.