What is Inheritance Theft?
Inheritance theft, sometimes referred to as inheritance hijacking, is the act of fraudulently acquiring a person’s inheritance. Inheritances are often misappropriated by relatives, friends or caretakers, especially in cases where the person in question is elderly, disabled or suffering from diminished mental capacity. Under certain circumstances, California law will allow the person who has been deprived of their inheritance to recover the money or property.
Inheritance theft involves the use of deception and coercion to convince a person to change their estate plans in favor of the person committing the inheritance theft. For example, an adult child who takes advantage of their elderly parent’s dementia to have them grant power of attorney or update their will to leave behind their estate to them may be held liable to the other beneficiaries.
Inheritance theft is typically a concern when no will or trust has been established , which means that the distribution of property is at the discretion of the court. If abuse occurs, California Probate Code Section 859 allows the victim of inheritance theft to file a lawsuit against the trespasser to obtain one and a half times the value of the assets that were stolen.
Additionally, if a person is able to avoid detection in committing inheritance theft, the property may be hidden or sold outside of the legal system. California Penal Code Section 496 PC provides that persons who improperly conceal or sell another person’s property can be fined or even imprisoned for felony theft, which is punishable by up to three years in state prison.
Inheritance theft laws are complex in California, so it is critical to consult an experienced attorney if you believe you were deceived into changing the distribution of your assets or if you suspect that your inheritance was misappropriated. With the right guidance, it may be possible to recover your inheritance.
California Legal Authority
California’s laws related to inheritance theft fall under California Probate Code, which is designed to ensure that the wishes of a decedent are carried out and that no one is allowed to take from their estate by undue influence, fraud or other means. Section 65 of the California Probate Code defines what constitutes an escheat, or the process by which unclaimed property is disposed of by the state. Although the law says that property owned by a decedent at the time of death escheats to the state if there are no heirs, the process described in the statute is lengthy. Another statute that includes specific language about escheatment involves intestate succession or what happens to the property in a probate matter when a person dies without a will. Section 6404 and thousands of other subsections to the California Probate Code contain legal terminology and describe specific situations around death that are pertinent to any estate, including one in which there is suspected inheritance theft.
California Civil Code section 2224 is a civil statute that includes the following language: "One who is entrusted with the management of another’s estate…who willfully and contrary to good faith takes possession of it, embezzles, fraudulently converts it, or secretes it, is liable for treble damages, and a fair compensation for the plaintiff’s necessary expenses." This statute provides for the filing of a civil lawsuit against someone in the case of inheritance theft, although the burden of proof is on the plaintiff to demonstrate that the property was legitimately stolen or converted, and there was malice involved in the taking of the estate property.
Common Ways Inheritance is Stolen
Various Common Methods of Inheritance Theft
As discussed in this article, California Probate Code Section 850 is the main statute that provides a method to seek recovery of stolen inheritance. However, this is only a remedy, which means after the fact, the statute provides no prevention against inheritance theft. A remedy for inheritance theft begins with knowledge of how inheritance theft occurs. Otherwise stated, knowledge is power. Inheritance theft can occur through any means, and by anyone. However, certain individuals and entities are more likely to engage in inheritance theft than others. More importantly, persons susceptible to inheritance theft are more likely become victims of inheritance theft.
Common Method #1: Undue Influence What is Undue Influence? Undue influence can be simply defined as an improper use of influence to take away the free will of a victim. When a victim’s free will has been taken away and the influence is improper, the result can unfairly benefit one party at the victim’s expense. Let’s say that Bill is a millionaire with no children and owns a 10,000 square foot mansion. Bill is 85 years old and has some difficulty remembering even the simplest of things. Billy is Bill’s only nephew, and has been coming by to visit Bill for most of the last 10 years. Based on Billy’s visits, Bill’s health has improved tremendously. Billy feels proud. One day, while Billy is watching television with Uncle Bill, Billy notices chicken scratchings on a piece of paper. He takes a closer look and finds Uncle Bill’s signature on pieces of paper leaving Billy $2 million and his mansion. He notices a few changes on Bill’s bank accounts that Billy never made before. Billy lets Uncle Bill know that he wants to talk with him about the documents. Upon meeting with Uncle Bill, Billy learns that Bill is in love with his nurse. Bill hired the nurse more than 10 years ago, and she has been staying over more often. Bill loves the attention, and loves the cuddles. He always felt embarrassed that he never had a girlfriend, until now. Bill tells Billy that he looks forward to seeing his nurse everyday, and often asks her for advice. After a few months passes, Billy notices that $7 million has suddenly disappeared from Bill’s bank account. Billy worries and confronts Uncle Bill about the money. Uncle Bill denies knowing anything about it. What he doesn’t realize is that the nurse pays all of the bills on behalf of Uncle Bill with bills money. She claims it is a gift. She never mentions the missing 7 million. As time goes on, Billy starts to see more changes in Uncle Bill’s estate plan. He notices that Uncle Bill has given his mansion to his nurse. He also finds out that Uncle Bill has left another $1 million to his nurse as part of her inheritance. This time, Billy finds something interesting that he never saw before. He notices a brand new Will dated 30 days earlier. The Will leaves 99% to his niece, and 1% to Billy. Billy realizes something is terribly wrong. He knows Uncle Bill has not talked to his brother (Billy’s father) for the last 20 years. Now that Billy has read the Will and learned about his secret inheritance, he contacts his attorney.
Common Method #2: Forged Wills Californians lose an average of $700 million per year due to forged documents. Wills are among the most commonly forged documents. A common method of forgery is for someone to use an authentic signature. If a person is not dead, his/her signature can be used on a new signature. Let’s go back to our previous example with Uncle Bill and Billy. Ten days following the Will that left 99% of Bill’s estate to his nurse, Uncle Bill dies in a routine bath. Billy learns of his uncle’s death the next day. He decides to take a look at the Will one more time, and finds the signature to be slightly different. Through a forensic handwriting expert known as an expert witness, Billy learns that the Will was probably faxed or scanned before it was printed out and signed. Based on this, Billy realizes that Bob either faxed or scanned the purported Will and faxed it to his lawyer. Based on a previous visit with a lawyer, Billy learned that Bob did not have a fax machine, nor did he have internet access. Also, Billy learns from a handwriting expert that the signature looked forced. Additionally, Billy learns that it is extremely difficult to forge someones signature if they are still alive. Based on Billy’s claims, he hires his attorney to contest the Will on Billy’s behalf. If successful, both Billy and his uncle would be declared to be ruled by a prior Will that left the entire estate to Billy.
Common Method #3: Elder Abuse As discussed in the previous stories, Billy’s uncle is 85 years old. Anyone with sound mind knows that older folks are more likely to fall prey to manipulation and undue influence. For example, let’s say that even at this age, Uncle Bill is extremely healthy. Based on Bill’s, and others experiences with nursing homes, he decides to visit home health care workers or nurses at the retirement community. Let’s say that Bill meets Pamela during one of his visits. After a few weeks of getting to know her, Bill falls madly in love with Pamela. Pamela learns from Uncle Bill that his girlfriend left everything to him, and even purchased a $10 million life insurance policy naming Pamela as the sole beneficiary. Pamela learns quickly that she can benefit greatly from soon to be Uncle Bill, and decides to forge a Will leaving her 90% of his estate. When Bill dies he leaves behind 9 grandchildren, 5 children and one estranged brother living in Ohio. All of them knew Uncle Bill for most of his life. Pamela is able to change Uncle Bill’s bank account to her own name, leaving everyone guessing where Uncle Bill was getting his money.
Each method of inheritance theft can occur in combination with other methods. Many people may be honoring their fiduciary duty and have good intentions at heart. There are common methods that almost always provide a person with foul play. Knowledge is power and those who have it are less likely to fall prey to inheritance theft when they understand the common ways in which inheritance theft occurs.
Signs that Inheritance Theft is Occurring
Spotting the signs of inheritance theft can be tricky. Initially, it may appear that your loved one is simply disorganized as they age. However, if you are noticing a pattern of "misplaced" assets or sudden changes in a will, you may need to step in with legal help. The following are some signs that inheritance theft could be occurring: These red flags indicate that your family member may be vulnerable to inheritance theft. A criminal will take advantage of any situation that they can and if someone has large amounts of assets, they will do everything they can to gain access to those assets by any means necessary. Caretaker Abuse: Caretaker abuse occurs by a relative or private caregiver. Often times this abuse is done verbally and physically to manipulate the senior into changing their will. If your loved one is living in private care and you begin to notice bruises and other unexplained injuries, there could be abuse taking place. Misplaced Wills: If your loved one suddenly appears to have more than one will that has suddenly appeared. This could be a sign that someone is trying to profit at the expense of your loved one. A will is a legal document and that only one will should be the one upheld in a court and enforceable. Deeds & Titles: Keep a close watch on the titles and deeds to your loved one’s home or land. Typically, these titles are registered with the state. If any of these states suddenly and mysteriously change, this could be a sign of inheritance theft. This is just a sampling of the many signs that could indicate inheritance theft. It can be frustrating when you realize that a loved one is being taken advantage of, however, if they rapidly lose their assets in short period of time, it is time to get an attorney involved.
Litigation and Legal Steps
A victim of inheritance theft should seek to promptly take all necessary steps to ensure that the wrongful recipient of a trust or estate asset is not able to use, transfer, hide, spend or otherwise dispose of the assets prior to further action.
If the asset is already transferred, the victim can request the return of the assets from the wrongdoer. If the request is unsuccessful, then recourse to the civil courts may be necessary. Under California law, a victim of inheritance theft has a variety of remedies: • A claim for breach of a fiduciary duty against the wrongdoer. • An action seeking damages for conversion against the wrongdoer for the value of the asset sought to be recovered. • An action for recovery of the assets against an innocent third party transferee of the wrongdoer (i . e., the person who has the assets now that the wrongdoer stole them). This would usually be combined with a damages claim against the transferee to the extent there was a good faith purchase in exchange for adequate consideration. • A claim in an estate litigation proceeding to require a claim to be filed in the trust (or estate) for the amount of the stolen assets (i.e., a priority claim). • A claim for financial elder abuse against the wrongdoer and against any trustees or estate administrators who enable the conduct of the wrongdoer. • A claim for legal malpractice against the attorneys who assisted the wrongdoer in connection with the theft and who ignore red flags raised by the victims of the crime. • A criminal complaint against the wrongdoer.
Guard Against Inheritance Theft
Individuals can take proactive measures to safeguard their inheritance and protect it from potential thieves. One of the most important steps is to ensure that individuals have a will that outlines their wishes and intentions. If a person does not have a legal will, then California law determines who inherits their property and assets, regardless of what they might have said verbally to family or friends. A will is a legal document that needs to be created by a qualified attorney who can help its creator determine any potential pitfalls in their future which may effect their decisions today. Even though some people may believe that they are too "young" to draft a will – and that perhaps they will get around to it later in life – that day may never come and it’s best to get the ball rolling as soon as possible. While no one can control what happens to their property and assets after they have passed away, they can make an accurate accounting for their beneficiaries to understand what the deceased person’s specific wishes were. It is important to note that all wills must go through probate, and that if a person dies without a will – also known as dying "intestate" – then their survivors must petition the court to determine the validity of their claim to those assets. Many times, that becomes a battle that takes long and tiresome hours in front of a judge to determine. Providing a will document for your loved ones can help to expedite their grieving process. Drafting a living trust is another way to help protect one’s assets and ensure that they are properly accounted for. Living trusts are legal documents that people can use to transfer their assets from their estate to their loved ones while they are still alive. To transfer property and assets via living trust, individuals must ensure that they have the proper legal language drafted by an experienced lawyer and that all assets are transferred to the new entity. This process protects your assets from becoming a costly legal battle, and instead allows individuals the agency to determine how they are passed on.
Case Examples
Inheritance theft is a crime in California, but it’s not a crime that the Penal Code (at California’s government website) specifically defines. The courts have nonetheless sentenced defendants for this common-law crime, which consists of a defendant attempting to steal a person’s inheritance and which California courts define as larceny by scheme or trick (among other variants of the crime). Some notable cases demonstrate how California’s legal principles have applied exceptions and affirmative defenses to inheritance theft.
- The case of People v. Weber (1978) involved a defendant who conspired with a third party to steal the inheritance of an elderly, wealthy man. The defendant was not only convicted of conspiracy, but also of possessing the property that the conspirator had stolen. The California Court of Appeal for the Fourth District affirmed that the possession of property gained through conspiracy was tantamount to possession of stolen property, affirming that it met the criteria for grand theft (Section 487 of the California Penal Code (see FindLaw), which has been updated to California Penal Code Section 487(a)). While this case established that possession of stolen property could be a separate crime, it did not formally identify inheritance theft as a specific crime.
- The case of People v. Perkins (1930) involved an heir who attempted to sell his father’s property for a sum that was only five percent of the property’s actual value. The heir lied about his father’s age and disease, even lying that he was bedridden. The heir was found guilty of inheritance theft, though the language of the ruling did not establish inheritance theft as a distinct crime in itself. It merely suggested that inheritance theft was an example of larceny by scheme or trick (one subtype of larceny).
- Later, in the case of People v. Clarke (1944), the California Court of Appeal for the Second District noted that inheritance theft qualifies as larceny by scheme or trick, which is simply larceny that occurs when the thief employs some sort of system to achieve the theft rather than relying on simple methods of theft.
- The latest relevant case is In re Estate of Gallo (1996), in which a California appeals court found that once a defendant has stolen through scheme or trick, it doesn’t matter if the defendant did not succeed in obtaining the inheritance. This is because the very act of placing oneself in a position to obtain the inheritance is the crime under consideration, even if this act is thwarted by outside forces.
Further Resources and Conclusion
In conclusion, we’ve highlighted some of the most critical elements of inheritance theft laws in California. If your loved one has been the victim of inheritance theft, there is a good chance that those responsible could be prosecuted for their actions under California Penal Code 496. It’s important to understand that the penalties for inheriting stolen property are far heftier than the penalties for the initial theft of that property.
As we explained above, inheritance theft begins long before a loved one dies. If the actions leading up to inheritance theft are proven and charged, the perpetrators could face a lengthy term in the county jail along with having to pay restitution to the victim .
California is one of the most effective states in the union when it comes to prosecuting criminals for inheritance theft, as this crime is considered a serious offense in the state. What should you do next if you suspect that inheritance theft has occurred in your loved one’s estate? There are many avenues to take, including contacting local law enforcement and seeking legal representation right away.
If you need sound legal advice or want to find out more about inheritance theft laws in California, the best course of action is to get into contact with an experienced California attorney who specializes in inheritance theft cases.