Guard Your Inheritance from Theft

If you think that your family has some dysfunction while you are living, wait for a member of the family to die. This often brings up old feelings of past wrongs and can often highlight the fact that certain family members were favored by the deceased loved one over other family members. This is only exacerbated by money from the estate. This often leads to the worst coming out in people. Even people that are most trusted and have a long history of being good can be turned by the grieving of death and the prospect of large assets changing hands. There are things that both the creator of a trust and the inheritor of a trust can do to make sure that inheritance theft is not part of the legacy left when there is a passing.

What can be done in the planning process?

Here are three key things that can be done in the planning process to assure that inheritance theft is not part of your plan.

1. Openness: Having a family meeting about the trust is a great way to clear the air. You as the creator of the trust can be referee of the discussion or you can seek the help of an estate planning attorney. This meeting can inform all members of their roles when the inevitable happens. A chance to voice concerns should be offered so that everyone can get everything off their chest. This helps ensure that these unresolved feelings are dealt with before the loss of a loved one and before large amounts (or even small amounts) of assets are changing hands.
2. Clarity: Creating a clear plan that is not confusing is very important. An ambiguous or unclear plan cannot only lead to family squabbles but can lead to legal actions.
3. No Contest Clause: If the above doesn’t work, there is always the stick method. I usually guide clients to use a carrot and stick method. You can write a term in your trust that says that anyone who argues with the trust receives nothing, but this doesn’t carry much weight if the beneficiary is already not receiving anything.

What Can be Done by Beneficiaries?

There are also a few things that a beneficiary can do when they are about to receive an inheritance to protect themselves.

1. Stay informed: You are always allowed to receive an accounting of the trust assets. This is a document (or a set of documents) that shows all the assets as well expenses, etc. In California, a trustee cannot contract out of this right either, so this right always exists for California beneficiaries.
2. Make and Keep Records: When you have any contact with the trustee, the executor or anyone else regarding the estate, document those interactions as proof.
3. Get a professional: You can also get an attorney to help you pursue your rights as a beneficiary.

While we do not participate in litigation, we can point you to a great litigation attorney to help you assert your rights if you are a beneficiary. However, we would love you help you plan so that your estate plan avoids these types of potholes. Further, we would love to help any trustee or executor, so they are not accused of inheritance theft. If you are a trustee or executor or you want to protect your estate plan from these problems, give us a call at (951) 516-2292.