The Fraud Examiner
How Opportunity for Probate Fraud Arises
Volunteer and Writer -
Death is an inevitable part of life and as loved ones pass away, many find themselves dealing with a number of practical matters. One aspect that needs to be handled is probate — a legal and accounting process that is triggered by the death of a person.
The word “probate” originates from the French-Latin word “probare” or “to probe,” so probate is specifically the probing of accounts for the person who died.
Probate is supervised by the state court system — usually at the county level in the U.S. Court oversight provides the legal path for debtors and creditors to make claims on the estate. For instance, did the person who died owe back taxes to the town
in which they lived? Did they make a loan to someone who hasn’t paid it back? Probate provides both the audit of the deceased’s finances and the legal tools to resolve financial claims. Once the audit is complete and the claims are resolved, the estate is considered closed.
Probate forces people to face hard topics at a time of loss and change, and unfortunately due to that hardship, it can serve as an opportunity for unscrupulous fraudsters to prey on victims. Probate opens the door for people to justify a wide variety of claims (real or fraudulent) against the estate.
Unfortunately, I know about probate fraud from personal experience — I was the lead trustee of my family’s estate, which was a target of probate fraud.
The fraudster likely has their own rationalization and pressure to make up two aspects of the Fraud Triangle, but the eye of the storm in probate lies in the “opportunity” for fraud. How can fraud happen under the nose of the Court system?
One portion boils down to lack of resources — there are millions of probates active at any point in time in the U.S., but there are not enough judges to personally oversee every probate case. Additionally, administrators of probates are often friends or family and are not likely to provide the same amount of
accountability as an outside individual.
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