probate / trust, financial abuse

Probate court matters generally involve Wills, Estates, Trusts, Guardianships, Conservatorships, and Powers of Attorney.  In many of these matters a legal relationship of trust exists with individuals who exercise considerable control over what can be significant assets.  With control also comes a fiduciary duty to exercise care and an obligation to act in good faith and solely in the best interest of the beneficiaries.


Case Examples:

Example 1:

I was approached by my 92-year old client to assist in tracing and documenting the assets that he and his wife owned as of the date that she passed away. The client had allowed his wife’s cousins to assist him in dealing with his finances during the time that his wife needed full-time care before her passing away. After his wife passed on, the trusting client was informed by his wife’s “good-natured” relatives that all of the assets that he thought were community assets had somehow made their way to his wife’s separate property trust.  One of the significant problems in this case was that the trustee for the wife’s estate and her attorney steadfastly refused to produce any records.  Ultimately we reconstructed their finances, spanning more than forty-years, by using their tax returns and our efforts resulted in a judgment of more than $1 million before legal fees were added.  The court also commented that both the analysis and testimony were reasonable and credible.

Example 2:

The description of the facts of this example could apply word for word to numerous other examples with relatively few changes.  The client’s sister and the sister’s husband took over care of their mother’s health and finances.  The father had passed on sometime earlier.  Assets, which were supposed to remain in the fathers half of the trust, disappeared. Other expenses such as meals, entertainment, auto repairs, clothing, and miscellaneous expenses grew exponentially each month while the mother was allegedly bedridden.  We documented the expenses and presented reports that explained the nature of the expenses. Furthermore, we documented why these expenditures appeared to be for the benefit of someone other than the mother.  We also traced cash transfers by the sister of funds to undisclosed joint bank accounts. As is typically the case, when a party is faced with overwhelming evidence of their wrong doing and financial abuse, a settlement was reached thereby avoiding a costly and lengthy trial.

Practice Areas

It is unfortunate that individuals disregard their fiduciary duty and act partly or wholly in a fashion contrary to the interests of those they are supposed to put first.  As forensic accountants we have seen circumstances where:

  • Unsupported and unexplained reductions in estate assets
  • Highly excessive use of estate assets for personal expenses
  • Excessive compensation paid to Trustees
  • Use of estate residence without compensation to the estate
  • The transfer of community assets to a separate property trust
  • Transfer of assets contrary to the directives of the Trust
  • Joint signature deposit or brokerage accounts were created without understanding or the intention the survivor will inherit the balance of the account at time of death
  • False claims to financial institutions of being the only beneficiary of a Trust
  • Incomplete and/or inaccurate accounting for Trust assets, income and expenses
  • Modifications and/or amendments to Trust documents that are contrary to your understanding of the wishes of the original Trustor

An all too frequent problem is beneficiaries waiting too long to raise a red flag that something seems amiss. While waiting can help keep the peace, you can also lose certain rights with the passage of time, such as your ability to challenge a Trust.

As forensic accountants we routinely work with legal counsel on probate and trust matters. We analyze the financial information available, identify the records not yet provided and participate in determining the best course of action to follow to insure fair and accurate treatment for all parties.