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Creating an estate plan is the ideal way to ensure that final wishes are carried out and that preferred beneficiaries receive the assets intended for them. Unfortunately, the best-laid plans can go awry when family members or trustees commit fraud. If you suspect fraud, you need a San Mateo, CA, Estate Planning and Civil Litigation lawyer who can get to the bottom of it. This is where Loew Law Group can help.

Whether you believe a loved one has been tricked or coerced into signing an invalid trust document or an unscrupulous trustee is mismanaging the family trust, you need legal help to prove fraud and go after whoever is responsible. The experienced team at Loew Law Group is here to provide the legal support and representation San Mateo residents need to fight fraud.

Understanding Fraud

Fraud is a type of deception that rises to the criminal level. It includes activities intended to result in personal gain, which is often financial in nature. In the case of trusts, fraud is most often perpetrated by family members deceiving or coercing a loved one for their own benefit or by trustees knowingly and unlawfully mismanaging assets.

Types of Fraud in Estate Planning

There are two main categories of fraud connected to trusts in estate planning. The first centers on the creation of trust documents, while the second has to do with how the trust is managed.

In both cases, fraud occurs when the wishes of the grantor are not represented. This could happen either when a family member has added themselves as a beneficiary and tricked the grantor into signing or when a trustee is using assets to buy themselves lavish gifts. What types of activities constitute fraud in trust planning and management?

Trust Creation Fraud

Fraud can occur at the time trust documents are created or signed. Lack of capacity could be a factor if the grantor is not mentally capable of entering into a contract agreement. In that case, another person might take advantage by getting them to sign something they otherwise would not have agreed to.

Such fraud could be as simple as misrepresenting the content of the document to trick the grantor into signing. It could also be a case of undue influence, whereby a loved one manipulates or coerces a grantor into signing against their will. Duress could be at play as well if the grantor feels somehow threatened and signs for that reason.

If the grantor is incapable of signing, another party could commit fraud by forging the grantor’s signature. These acts are illegal, and if you can prove them, you could invalidate the trust.

Estate Mismanagement

This type of fraud can occur when trustees are negligent or act in their own interests instead of those of the beneficiaries. Trustees are fiduciaries, which means they are bound by law to act in the best interests of their clients.

The following forms of estate mismanagement qualify as fraud:

  • Embezzling funds 
  • Choosing high-risk investments 
  • Commingling personal and trust assets 
  • Using assets for the benefit of the trustee 

In order to act in their clients’ best interests, trustees must avoid these fraudulent activities and instead invest and manage trust assets responsibly. It is their duty to safeguard and preserve the assets until they are distributed to beneficiaries.

Accounting Fraud

Accounting fraud could encompass a range of activities designed to benefit a trustee. It might be as simple as charging inflated management fees or failing to keep accurate records of management costs and other trust activities.

This type of fraud could go much further, though. For example, a trustee might sell off assets to family or friends for below market value. A trustee could also alter financial documents to hide mismanagement or fail to provide required reports to beneficiaries.

There are times when mismanagement could be chalked up to inexperience, which is why it is so important to choose qualified trustees. However, if a trustee benefits financially or in some other way from actions that harm the trust and its beneficiaries, it could be a case of fraud.

How to Handle Suspected Fraud

Fraud may not be easy to find or prove. Those committing fraudulent acts will likely go to great lengths to cover their tracks. 

However, if a loved one suddenly alters their known end-of-life plans under suspicious circumstances, you might want to investigate. The same goes for questionable financial management, such as a trustee who is evasive when you ask for reporting or information concerning trust activities.

Loew Law Group Is on Your Side

Losing a loved one can create tension among family members. Emotions may run high if people feel they were passed over in a will or trust. If you have reason to believe your loved one’s wishes were tampered with or you fear mismanagement, you need a reliable and experienced legal professional to help you get to the bottom of it.

Are you a San Mateo, CA, resident seeking help with suspected trust fraud? The capable Estate Planning and Civil Litigation attorneys at Loew Law Group can help you determine whether you have a case. Contact us now to schedule a case evaluation and get started.