Frequently we hear stories about family members, acquaintances, home health care workers, and even clergy financially abusing the elderly and infirm. Sometimes their assets are stolen with the victim’s “cooperation,” as when the victim is influenced for the sake of “convenience” to execute a power of attorney or joint account designation.

Following the victim’s demise, the family and duly appointed fiduciaries may be unable to locate valuable personal property, that discover suspicious withdrawals, or bank accounts have been re-titled. In some cases, the beneficiary designations on life insurance policies were changed when the decedent was on his or her deathbed. Fortunately, the family has recourse to discover assets which rightfully belong to the estate.

DISCOVERY PROCEEDINGS

In practice before Probate Courts, “discovery” is often broader, when compared to other Courts, because the fiduciary is usually empowered to investigate what happened to assets of the decedent during his or her life if there is an implication of fraud or undue influence.

A discovery proceeding has two stages. First is the inquisitorial stage where the fiduciary discovers relevant information about assets thought to belong to the estate. A discovery petition may be commenced against anyone believed to possess estate property or having knowledge of the whereabouts of estate property. The Court may order such persons to give testimony under oath or before the Court.

Second is the trial stage, where the fiduciary must prove the wrongful taking of property. If successful, the respondent may be subject to a money judgment, or be ordered to turn over the assets. If specific assets can’t be returned, a money judgment will be entered.

It is worth noting that while the estate’s fiduciary is generally the person who files discovery proceedings, other interested parties may also do so when the fiduciary has a conflict of interest or simply refuses to act.

A CASE STUDY: THE OVERLY HELPFUL AIDE

Alfred and Mary Fischer hired a health care aide worker who assisted them with their affairs. After they passed away, their estate fiduciaries and the United Jewish Appeal (the residuary beneficiary under Alfred’s Will) brought a discovery proceeding against the caregiver. It was alleged that the caregiver had misappropriated $1 million dollars from the Fischers prior to their deaths.

The caregiver explained that most of the withdrawals over the years were spent for the Fischers’ benefit. The caregiver further explained that the rest were gifts to her and salary. At trial, the testimony demonstrated that the Fischers were very infirm and were completely dependent on the caregiver. This subjected her to vigilant scrutiny and shifted to her the burden of proving that the Fischers actually intended to make gifts to her. The caregiver was also required to account for the money she allegedly spent on the Fischers. The Court concluded that the caregiver did not meet her burden of proof and had engaged in constructive fraud. The Court charged her with returning to the petitioners $956,000 with interest.