Estate fraud is not a victimless crime, a recent article on the Today’s Will and Probate website pointed out, depriving beneficiaries, including charities, of much needed income.

Writing for Today’s Wills and Probate, law firm Wilsons Solicitors pointed out that sadly estate fraud is not an uncommon as once might assume. Those who do it might ask themselves if anyone will ever find out, or promise they’ll return the money as soon as they are able to do so.

The firm says it deals with the fallout from cases where money is stolen from an estate, which often results in charities that were due to receive a significant legacy income from that estate become victims of crime and lose out on a substantial donation.

‘Extreme’ level theft

The firm quoted the Court of Appeal judgment in HDI Global Specialty SE v The Guide Dogs for the Blind Association & Ors as an example of an extreme level of theft by a probate practitioner. The case refers to a senior partner at a law firm who admitted to misappropriating client funds of more than £4 million, though it would appear she had stolen more than that.

Linda Box’s firm Dixon Coles & Gill in Wakefield has since been shut down by the Solicitors Regulation Authority. Box had targeted money belonging to deceased person’s estates, often pocketing the funds that were intended for charities.

She was caught when one of the firm’s other partners had to deal with a task on one of her files while she was absent. He realised that payments had been made from the estate funds of the late Mr Scholefield to a creditor who was not owed money by the estate. When she was confronted, Box immediately admitted misappropriating estate assets to pay her credit card bills as well as other things, and she’d taken more than £500,000 from that one estate alone.

Client account ledgers ‘dodgy’

Further investigations showed that she’d made payments to the same range of creditors from other estate administration client account ledgers.

Dixon Coles & Gill’s insurance firm was not obliged to cover her actions directly because the fraud negated the insurance contract. But it was obliged to cover her two partners because they were regarded as being vicariously liable for her actions. As the law company had only taken out the minimum legal insurance requirement, the insurance firm argued it should only be liable for £2 million, reasoning that Box’s crime, though it had gone on for more than ten years, should be considered one continuous act, and therefore one claim or a series of related acts.

The charities who stood to benefit from Mr Scholefield’s estate along with the Bishop of Leeds (Box stole money from the Bishop of Wakefield too) defended this line of argument all the way to the Court of Appeal and have set a legal precedent (if it is not successfully appealed at Supreme Court level). This should help beneficiaries (both charities and individuals) who find that their rightful inheritance has been stolen from them by dishonest probate practitioners.

Wilson’s Solicitors note too that the judgment should come as a relief to partners in legal firms dealing with probate, ensuring that they do not have to cough up should their colleagues do something similar.

The solicitor firm said that a second pair of eyes on probate administration files was vital to stop such things happening in the first place. Legal firms should be open and honest with charities, providing them with the documents that support the sums distributed to them, and hand over the estate accounts for checking.

Mr Scholefield’s intended beneficiaries haven’t yet received the money they were meant to get, though the Court of Appeal judgment might make this possible.

Finders International is an award-winning probate research firm.  Our regulations and credentials include the IAPPR, Friends Against Scams, we are approved APSE partners and are the first probate research firm to be approved by the Chartered Trading Standards Institute (CTSI).  For a full list of our credentials, please visit our website here.  Alternatively, you can call +44(0) 20 7490 4935 or email [email protected]