To Catch a Thief- How to Prevent Inheritance Theft

When you create a will or estate plan you may assume that your money will go to the intended heirs. But inheritance theft can happen right in front of your heirs, and the thieves will probably get away with it if the proper measures aren’t put into place to stop them. Since the thieves are usually family members, the fallout is not only about money, but also previous family tensions.

Here is what you need to know about the problem of inheritance theft, and how you can protect yourself and your heirs from inheritance thieves:

Forms of Inheritance Hijacking

Inheritance hijacking takes many forms, including outright theft. It is not unusual for valuables such as antiques or jewelry, to disappear from your home after you die. Missing items could have been taken by a stranger breaking into your home, or even someone close to you. A family member may want to grab a treasured item before someone else gets the chance. Even an in-home caregiver could take valuable items as a sort of do-it-yourself severance payment.

Denigration of fellow heirs is a frequent tactic used to increase an inheritance. Sometimes heirs are so focused on what they can do to increase their chunk of estate that they forget about the bond they have with their fellow heirs. One may lie about the other heirs, claiming that one sibling cannot be trusted with money, and make false promises. This kind of talk can persuade you to change your will in favor of the lying heir.

Undocumented loans are another type of inheritance hijacking. Family and friends who borrow money from you may say that the money was a gift. If there is no loan document in place, the heirs have no recourse to get the money back from the borrower on your behalf. The only way to protect your heirs from this tactic is to insist on loan documents whenever you loan out a large chunk of change.

Heirs or advisors might also prepare a fake will or amendment to a real will, giving the forger a larger piece of estate. For example, if you leave a larger piece of your estate to one heir, and another sibling destroys the will, then you would be considered to have died “intestate”. If this happens, your money would be distributed equally between your children.

Protecting Your Estate

If you take certain steps while preparing your will, you can greatly increase the odds that your assets will reach the intended heirs. A will or estate-plan document you prepare yourself is more likely to be successfully contested than those created by an experienced estate-planning attorney.

Discussing your estate plan with your entire family present will ensure everyone is on the same page. If the whole family knows about your assets and how you intend to divide them, it is much more difficult for any lying, arguing, or confusion to happen.

Appointing two executors to your estate will minimize the chance of your executor taking advantage of their position. Make one of the two executors a non-family professional, such as a trust company, a financial planner, or an attorney.

Another way to ensure that there is no inheritance theft involved is to give assets to your heirs before your will goes into effect. Another benefit of this tactic is that you will be able to see your heirs enjoy the gifts you have given them.

Insist that your executors share details with all of your beneficiaries about the estate’s expenses, assets, and financial transfers. Your estate-planning attorney can write this requirement into your will. This requirement makes it harder for an executor to hide theft.

It’s important to also reconsider your estate plan before you get remarried. You may assume that your spouse will treat the children from your first marriage fairly during the estate-distribution process. In reality, your intended heirs may receive a much smaller share of the estate than you intended, or even nothing at all. The new spouse or the new spouses’ heirs may put their own financial interests first.

Our California estate planning attorneys help clients in Oxnard and the surrounding areas of Ventura County with a complete range of trust and estate services. We can help you figure out the best course of action for your estate and create a legally valid plan under California law. Call Lowthorp, Richards, McMillan, Miller & Templeman, APC today at (805) 981-8555 or contact us online for more information.

Will I Get My Spouse’s Inheritance?

Inheritance laws help control the rights of the decedent’s property and how much is inherited by each of his or her survivors. California is a community property state, which means the law presumes all property acquired during a marriage is owned equally by both spouses. However, property one spouse owns alone before a marriage or acquires by gift or inheritance during a marriage is considered separate property.

But just because inheritances are generally considered separate property does not mean that this cannot change. It is possible to invalidate separate property in California if you do not do your due diligence in managing that property. Commingling is a term that refers to one spouse’s separate property becoming mixed with a couple’s marital property. This means that if you do not manage your inheritance properly, it could be considered marital property under state law. For example, if you were to inherit a large sum of money and deposit that money into an account you hold jointly with your spouse, that inheritance loses its status as separate property.

Divorce and Inheritance

If you and your spouse are divorcing, you should look into your state’s laws regarding divorce and inheritance. You may also seek a free consultation with an attorney that can provide assistance to help you figure out what will happen to your inheritance once you pass away.

Questions About California Inheritance Laws?

If you have more questions about inheritance laws pertaining to you and your spouse, contact a lawyer for legal assistance. Call the trusted estate planning attorneys at Lowthorp, Richards, McMillan, Miller & Templeman at (805) 981-8555 or fill out our online contact form.

Can I Make Sure My Assets Are Not Distributed Through the Probate Process?

Courtroom, Judge, male judge in black mirror backgroundThe probate process involves the court distributing a person’s assets upon death. It usually occurs in situations where a person does not have a will. However, just because a person has a will does not mean that their assets will definitely not be distributed through the probate process.

What to Do to Prevent Your Assets From Being Distributed Through the Probate Process

Here are a couple of tips to help you avoid having your assets distributed through the probate process:

  • Joint Ownership – Set up any real estate or other property you own so that you share ownership with the person, persons or entity that you want to be the beneficiary of the property or real estate after you die. Property or real estate that is jointly owned with a survivorship right will not be subject to the probate process.
  • Living Trust – There are both revocable and irrevocable living trusts. Revocable living trusts allow the creator of the trust to revoke it while he or she is still alive. Irrevocable trusts cannot be revoked once they are created. The way a living trust works is that you create the trust and you become the trustee of the trust, which means you fully control any assets, such as property, that you transfer to the trust while you are alive. After your death, a person who you chose to takeover as your successor trustee will distribute the property and other assets you transferred to the trust while you were alive to your chosen beneficiaries. This protects your assets from being distributed through probate.

Next month, we will examine how the transfer-on-death designation, creating a will and setting up a pay-on-death account can also enable you to avoid probate.

At Lowthorp Richards, our experienced probate attorneys have been successfully guiding people through the probate process, as well as other complex estate administration matters, for decades. We are dedicated to providing individuals and families in Ventura County, the Central Coast and throughout California with the highest caliber legal services possible. To learn more about estate administration or to set up a consultation, call Lowthorp Richards today.

When Is a No Contest Clause Ineffective in Probate Court?

The California Court of Appeal just handed down an opinion very strictly limiting the application of a no contest clause contained within trust to later trust amendments.

Peggy was battling cancer for 5 years, during which time her friends, Tracy and David, became the exclusive suppliers of medical cannabis upon which Peggy depended for treatment.  Anticipating her demise, Peggy placed Tracy in custody of all of her estate planning documents.  Soon after, Peggy complained that Tracy read the documents and confronted her about the disposition of her estate.  Shortly after, Peggy executed a trust amendment created in secret, and without advice or assistance of her longtime estate planning attorney, leaving all of her money to Tracy – to the exclusion of Peggy’s brother and godchildren, natural objects of her bounty, and beneficiaries under the estate plan in existence when placed in Tracy’s custody.  After Peggy’s demise, Tracy produced the trust amendment, and the beneficiaries went straight to court. Continue reading

What is Probate in California?

Sitting down and having a discussion about what will happen to your assets and finances after you pass away is certainly not an easy thing to do, but it’s something that should be done. You should start your estate planning as early as your graduation from college, and especially once you’re married with children.

When you pass away, most likely your estate will pass through the probate process. This process is the official way your estate is settled through the supervision of probate in California. The estate is frozen until the court determines the Will is valid, all relatives have been notified and that all of the property in the estate is identified. The court will also ensure that creditors and taxes are paid. Once that is all done, an Order is issued by the court for the distribution of the remaining assets. If you die without a will, the court will determine who is appointed as the administrator of the estate and will determine who receives your assets based on a “family tree” of surviving relatives.
Continue reading