If you have elderly parents, this may be your worst nightmare: Your elderly mother who is suffering from dementia has a caregiver who takes advantage of her. When she passes away, you find out that the caregiver has produced a new Will that leaves all of mom’s assets to the caregiver. You strongly suspect that this person has manipulated your mother through coercion and isolation. Now there’s a legal document that seems to have made changes that go against your mother’s real wishes.
Stan Lee’s Inheritance Gets Hijacked
This is an example of elder abuse and unfortunately, it is all too common. For example, legendary comic book author Stan Lee died on November 12, 2018, leaving his estate in chaos. Lee was responsible for some of the most memorable characters ever created, like Iron Man, Thor, Spider-Man, the X-Men, and Daredevil. Lee’s estate was conservatively valued at $40 million. But with great riches comes great responsibility, and Lee’s daughter was allegedly quite irresponsible. Lee frequently said that his daughter Joan asked him for tens of thousands of dollars and that she spent tons of his money. Some friends say that Lee spent his last years terrified that his daughter would spend it all.
So, Lee and his wife made a trust fund to manage the money, with Lee’s wife as the trustee. But when Lee’s wife died, the daughter was left floundering. People with nefarious intentions got Joan’s ear. Meanwhile, Lee started acting out of character by firing people who had worked for him for years, like his accountant, lawyers, housekeeper, and gardener.
How bad was it? Joan hired Jerry Olivarez, a florist turned publicist, as a key advisor. Olivarez then fired Lee’s banker, a man who had worked with him for 26 years. Lee’s lawyers also got the boot. Olivarez then managed to transfer around $4.6 million out of Lee’s bank account seemingly without Lee’s express authorization. Olivarez also coerced Lee into giving him his power of attorney. With the POA in hand, Olivarez allegedly appointed his own lawyer to represent Lee without disclosing the fact that the man was his lawyer too. This is an obvious conflict of interest. All of this became public after a Hollywood Reporter investigation into allegations that Joan was physically and verbally abusing her father.
While you work hard to secure your financial future and leave a meaningful legacy for your loved ones, it's essential to be informed about potential risks that could jeopardize your intentions. The Stan Lee situation highlights how serious this problem is. In this post we at FastWill are going to shed light on the problem of inheritance hijacking and identify all the ways you can safeguard your assets and protect your beneficiaries.
What is Inheritance Hijacking?
Inheritance hijacking refers to the unauthorized or improper diversion of someone’s intended inheritance. This can happen in many different ways, such as through fraud, manipulation, or undue influence. Unfortunately, even within families, instances of inheritance hijacking seem to be on the rise. In such cases, the rightful beneficiaries are deprived of their intended assets, and the deceased's wishes are disregarded due to coercion and manipulation.
Identifying Potential Threats
The first step in safeguarding you and your family members against inheritance hijacking is to identify potential threats. This entails understanding the typical scenarios that can lead to abuse. Some common scenarios include:
-
Undue Influence: This occurs when someone exerts pressure or manipulates a vulnerable person into modifying their estate plan or beneficiary designations against their actual, known wishes.
-
Fraudulent Acts: Fraudulent schemes can range from forged signatures on documents to deceitful tactics employed by unscrupulous individuals who are trying to gain control over an inheritance. For example, someone could forge a person’s signatures on legal documents, like insurance policies or Wills, to divert assets to themselves or others. They may exploit the vulnerable state of the deceased or exploit loopholes in the execution process to perpetrate the fraud.
-
Disputes among Family Members: Family conflicts can arise when multiple beneficiaries have differing interpretations of the deceased's intentions, leading to contentious legal battles that can deplete the estate's assets. This often happens when the language used in a Will or trust document is too ambiguous, which then leads to family members making conflicting interpretations. This happened on the fourth season of the HBO show “Succession.” When the family patriarch died, he left a Will that underlined his son’s name, indicating that he wanted the son to be CEO. Or did he? The line also went partially through the son’s name. Another family member argued that the line actually meant that the patriarch no longer wanted the son to be his sole heir.
-
Negligence or Mismanagement: Executors or trustees entrusted with administering an estate or trust may engage in fraudulent activities or mismanage assets, diverting funds intended for beneficiaries. This can include embezzlement, improper investments, or self-dealing at the expense of rightful heirs.
Tobacco Heiress Doris Duke: A Cautionary Tale
Tobacco heiress, Doris Duke seemed to fall prey to several classic inheritance hijacking schemes just like the ones outlined above. Duke’s father James Buchanan Duke created two trusts for his daughter. The terms of the trusts made it clear that when Duke died, the remaining funds would go to her children. But Duke didn’t have any children who survived to adulthood. Then in 1988, when she was 85 years old, Duke adopted a Hare Krishna devotee named Chandi Heffner, who was 35 years old. She seemed to manipulate Duke into believing that Chandi was the reincarnation of Duke’s biological son, who died in infancy. Duke tried to negate the adoption and removed Chandi from her Will, but Chandi still sued for a piece of the estate.
That wasn’t the only challenge to Duke’s fortune. In her Last Will and Testament, Duke gave almost her entire fortune to the many charitable organizations she supported. However, she named her butler, Bernard Lafferty, as executor, and Lafferty wasn’t up to the job. In fact, Lafferty used his role for personal gain. The estate was worth $1.2 billion and when proof piled up that Lafferty was spending wildly, Duke’s former executor went to court to have Lafferty removed. The suit alleged that Lafferty and his lawyers cooked up a scheme to manipulate Duke, who was sick and sedated. Lafferty was eventually removed.
And that wasn’t the end of the story because Duke’s nurse said that Lafferty was in cahoots with a physician to keep Duke sedated with Demerol and morphine, which also could have hastened her death.
How to Protect Against Inheritance Hijacking
Thankfully, there are several proactive steps you can take to mitigate the risk of inheritance hijacking:
Open Communication: Engage in open and honest discussions with your loved ones about your estate plan. Clearly communicate your intentions and ensure that they understand your wishes, reducing the likelihood of misunderstandings or disputes later on. It can be helpful to leave a letter summarizing your intentions.
Execute a Well-Drafted Will: Drafting a legally valid and detailed Will is essential. By clearly stipulating your wishes for asset distribution, you provide a solid legal foundation that can discourage any attempts of inheritance hijacking.
Update Your Estate Plan Regularly: Life circumstances change, and so should your estate plan. Regularly reviewing and updating your Will ensures that it remains relevant and aligned with your current wishes. When people neglect to update their Will, this leads to misunderstandings and conflict between family members, which someone else can exploit.
Consult an Estate Planning Attorney: Working with an experienced estate planning attorney can help you protect your estate, particularly if it is a large estate. A lawyer can guide you through the legal complexities and help craft a comprehensive estate plan that reflects your true wishes, while also safeguarding against potential challenges.
Conclusion: Be Vigilant
Protecting your hard-earned assets and ensuring your legacy remains intact requires vigilance and strategic planning. By understanding the risks of inheritance hijacking and taking proactive steps to safeguard your estate, you can significantly minimize the chances of unauthorized diversions. If you are concerned that a family member might be exploited, you should remain vigilant to all signs of abuse, including isolation. By being proactive you can ensure that all wishes are honored.
