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Probate Fraud

 

 

From The Times - free subscription - link broken as at 23 March 2005. Article cached by UnjustIS

Like this one, taken from the Sunday Times on 10 July 2005: Wills: why you can be cheated

 

Further reporting:

Telegraph 23 march 2005

Guardian 23 March 2005

Independent 23 March 2005

Edgware Times 23 March 2005

 

Selection of the case history:

 

Neutral Citation Number: [2004] EWHC 1613 (Ch)

Neutral Citation Number: [2005] EWCA Civ 326

 

Original article:

Copyright: Times Newspapers 2004

July 25, 2004

Fraud robs bereaved of £150m

Beneficiaries are being swindled out of millions of pounds by trusted advisers. David Budworth investigates the rise in probate crime

DISHONEST solicitors and legal advisers are plundering the wills of elderly people and swindling the rightful beneficiaries. The Royal National Institute for the Blind (RNIB), which has been a victim of probate fraud, estimates that it costs £150m a year.

Tim Stone, head of legal services at the RNIB, said: “The perpetrators tend to be very skilled and most people are not even aware of it.”

Probate fraud is often committed by solicitors and other legal advisers who are appointed to wind up an estate. They have access to all the deceased’s property and paperwork.

Frank Nesbitt, a detective in the economic crime squad of Northumbria police, said: “Probate fraud is a big problem. There is no control over solicitors when they are drawing up a will or administering an estate.”

The means of deception are varied and frequently ingenious. They include bogus wills, mythical credit-card bills and hidden bank accounts. And the sums involved can be huge.

Nicholas Furr and Paul Flint, who ran Legacies (Will & Probate Services) in Brentwood, Essex, “misapplied” more than £4m in funds from the families of the recently deceased. The pair were not solicitors but provided will-writing services and administered estates. Since the crime was discovered the firm has gone bust and only £200,000 has so far been returned. The two men are banned from running a company for 11 years and their case may be taken up by the Serious Fraud Office.

Fiddling the accounts or stealing from the home is extremely easy, as the RNIB knows all too well. When Evelyn Hudson died, her will stated that her estate should be left to the charity. The RNIB duly received the estate accounts from a firm of solicitors, Sparrow & Sparrow, based in Bognor Regis. The accounts showed Hudson had credit-card bills of £14,039 when she died, and outstanding nursing-home charges of £7,943. These would all need to be paid by the estate before the rest of the money could be handed over.

The RNIB was surprised by the scale of the bills because it knew that Hudson was in her eighties when she died. It made some inquiries and discovered that she had never owned any credit cards; nor did she have any outstanding nursing-home bills. The estate administrator who had drawn up the accounts had invented the bills and tried to pocket the £21,982.

In another case, a solicitor failed to mention the deceased’s Swiss bank account worth £34,000. And one lawyer charged £45,000 in fees to wind up an estate when he should have billed for only £3,000.

It is not only solicitors who commit fraud. Neighbours, carers, rogue tradesmen and even family are also guilty.

Probate issues hit the headlines earlier this month when (edited 10 Apr 2005) was taken to court by her three stepchildren after they were cut out of their father’s will seven weeks before he died.

The court ruled that (edited 10 Apr 2005) had signed the will, which had been drawn up by (edited 10 Apr 2005) without being aware of what he was signing. The will was found to be invalid for failing to comply with safeguards aimed at preventing fraud.

Peter Jeffreys of Wilsons, a solicitor in Salisbury who has dealt with fraud cases, said: “One of the best ways to recognise fraud is to rely on gut instinct. Abrupt changes to the will or unexplained withdrawals made not long before death might be cause for alarm.”

So might the transfer of large sums of money or property, or the disappearance of valuable items. Other warning signs are the inclusion of someone else’s name on a bank account, the sudden involvement of a relative who takes over the management of the person’s finances but leaves bills unpaid, or a person who is anxious and confused about his or her finances.

It is particularly easy for someone who has been granted enduring power of attorney (EPA) to commit fraud. EPA is given by an elderly person to a solicitor, family member or friend, and grants the executor complete control over his or her financial affairs and property, either now or in the future.

If you are suspicious you should get a copy of the will and all previous wills. You should also ask for the estate accounts, which show what was in the estate at death and where the money went.

All beneficiaries are entitled to answers to any reasonable queries, but under the English system they are not legally entitled to see the estate accounts.

Banks and building societies can compound the problem. There have been cases where banks have denied that money has been deposited with them by a dead person. The money is only repaid after threats of legal action or adverse publicity.

In one case, a dead woman’s accountant was told in writing that she had no money deposited with Northern Rock, even though the family supplied an account number.

The bank found it had £50,000 of the woman’s savings following a telephone call from The Sunday Times.

Northern Rock blamed an administrative error, but experts urge beneficiaries to remain vigilant.

 

 

 

 

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