If an executor, beneficiary, or some other person steals estate money or assets or unlawfully sells the property of the deceased before it can be distributed to heirs, it is known as estate fraud. This crime can be committed by a beneficiary who defrauds the estate. It can also be committed by an executor who transfers assets from the estate to an entity the executor controls against the terms of the will. Depending on the acts committed, it could implicate both civil and criminal issues.

Civil vs. Criminal Remedies

If a person defrauds the estate, he or she could be subject to criminal prosecution for fraud or similar crimes. If convicted, the state may levy fines against them and give some or all of the money as restitution to the victims. Criminal fraud is pursued only by the government; individuals may not pursue criminal penalties.

However, victims of fraud can file lawsuits against the persons they believed committed the fraud or wrong them in some way. Furthermore, even if the act didn’t raise the threshold of a crime, victims of estate fraud can still be a civil suit to recover monies or properties transferred.

Undue Influence: Civil Cause of Action

There are several causes of action related to estate fraud, including, undue influence. For a testamentary instrument to be valid (i.e., a will or corollary), the testator must conceive of the terms and sign it of their own free will and intent. So, individuals who sign away their property in a will based on threats of violence have not created an enforceable will.

Moreover, the law also provides that acts of undue influence, such as over-persuasion, duress, or mild coercion, invalidate a will. To establish a cause of action for undue influence, the moving party must submit testimony, documents, and other evidence to substantiate the case.

Examples of Estate Fraud

There are many varieties of estate fraud:

• An executor overcharges the estate for administrative fees;
• A family member uses his or her power of attorney over a parent to transfer assets from the parent for personal use;
• A disinherited family member destroys the will to force the estate into intestate succession; and
• A family member uses undue influence over a sick parent to coerce them into amending parent’s will to make the family member a beneficiary.