In my work as a lawyer specialising in Wills and estates, I am witness to some appalling human behaviour.
Due to the popularity of this series of articles, here are some more examples as cautionary tales:
Probate fraud can take many forms and, like many other types of fraud, it has steadily increased in recent years, more so during the COVID-19 pandemic.
In some cases, executors, administrators, beneficiaries or third parties have misappropriated (stolen) monies or assets.
Common examples include:
- executors failing to notify a beneficiary of their entitlement and taking it for themselves;
- underpaying a beneficiary by omitting assets from the estate or falsifying estate liabilities;
- selling estate assets at an undervalue to close associates;
- assets are stripped from the estate (either before or after the death of the testator);
- Wills are forged or fraudulently modified to alter entitlements;
- Probate fraud also encompasses a situation where someone deliberately destroys a Will to ensure that a testator dies intestate or to allow an earlier Will to be admitted to probate.
In my 35+year career, I have personally seen instances where an executor deliberately ignored a later Will in order to seek probate of an earlier Will that was more to their liking.
However, the evolution of cybercrime has meant that newer types of probate fraud have emerged. It is perhaps unsurprising that fraudsters are targeting this area more frequently, given the large sums that can be involved, and executors and their lawyers should be aware of and be prepared to identify and address new forms of probate fraud.
Tricks and manipulation
In particular, there has been significant growth in the use of ‘Social Engineering’ (psychological manipulation) to trick people into making substantial payments or giving away sensitive security information.
This includes impersonation scams, where fraudsters pretend to be from trusted organisations such as executors, government agencies or law firms. These have seen the biggest increase of any type of scam.
By way of example: an email may be sent from a fraudster regarding a substantial sum to which they say the individual concerned may be entitled as a beneficiary.
The recipients may be genuine potential beneficiaries, but they can also be individuals who are not in line to receive anything by way of inheritance.
A typical scenario involves the fraudster requesting funds to cover alleged tax or other costs before the inheritance can be released.
It is not uncommon for fraudsters to ask for bank details so that they can pay in the alleged inheritance. Obviously, this usually leads to the fraudsters clearing out the victim’s bank account.
Although some of these emails may be easily detected as scams (e.g., being sent from webmail addresses rather than professional email addresses), others are much more refined, with false documents, such as powers of attorney, attached in some cases.
Impersonation scams can also involve false debts. For example, fraudsters may contact an executor or administrator posing as an individual or business that is owed money for goods or services bought by the testator prior to death. The executor or administrator then pays the alleged debt from the estate.
Given the increasing awareness of these types of scam, and the fact that the general public has become much more aware in relation to suspect emails or communications, criminals have started to use more sophisticated methods.
For example, their correspondence might adopt official letterheads, refer to registered offices, domain names, genuine solicitor names and sometimes even the names of real law firms in order to add legitimacy and authenticity to the fraud.
Greater sophistication, combined with developments in technology, has increased the likelihood of recipients being deceived.
Executors, administrators, lawyers and other professionals operating in this area need to ensure that payments are made to the right people.
This is why law firms have to be very diligent about verifying client identification at the start of every new instruction, and checks also need to be carried out throughout the matter, particularly when payments are to be made.
Anti-money-laundering protocols are increasingly mandated for fiduciaries and lawyers. Running additional checks to confirm the identity of alleged debtors or beneficiaries, including whether the bank account details provided correspond to the individual or business concerned, can prove vital.
Genders and Partners is the oldest law firm in South Australia, established 1848.
Contact us to learn how to protect yourself, your family and your assets by assisting you to administer a deceased estate, by visiting our website today and schedule a free no obligation telephone consultation to find out how we can help protect you and yours.
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