Ways Bad Fiduciaries May Take Advantage of the COVID Crisis
During the past two decades, there has been a nearly 75% increase in trust and estate malpractice claims. Therefore, unfortunately, bad fiduciaries are more common than you may think. Being aware of the way unethical fiduciaries can take advantage of COVID can help you keep them from harming your assets.
Using Illness to Gain Fiduciary Powers
Most fiduciaries for trusts or power of attorney arrangements only begin their job once the original person in charge passes away or becomes extremely ill. COVID is the perfect opportunity for unethical people to position themselves as fiduciaries. When a person has very severe COVID, he or she can be more easily taken advantage of. For example, a son could talk his mother into signing a financial power of attorney document. Then when she gets COVID, he could take control of her estate. It is easier for ill people to be manipulated into these dangerous situations. Working with an estate planning lawyer to name a trustworthy person as your fiduciary before you encounter any health care problems will help ensure you have a fiduciary you can count on.
Poor Financial Advice During a Time of Economic Crisis
One of the most common ways that individuals fail in their fiduciary responsibility is simply by making poor financial decisions. A fiduciary may do this specifically to benefit himself or herself, an acquaintance’s business or another family member. A fiduciary may also just provide poor advice because he or she is not being appropriately cautious. COVID-19 has caused all sorts of financial upheaval, so this type of fiduciary malpractice is particularly likely right now. Investing in risky stocks, unproven COVID cures and uncertain real estate markets could all be a sign that a COVID fiduciary is failing in his or her duty.
Using COVID-19 as an Excuse for Unethical Behavior
All the turmoil of COVID can be a way for a bad fiduciary to mask his or her actions. For example, a fiduciary could choose to hire a business acquaintance who charges exorbitant fees and then claim that this person was the only option because other competitors were closed during COVID. All the delays, changes and closures caused by COVID can be used to explain away conflicting interests and other situations in which the fiduciary may use your assets for personal gain. It is important to actually look into any suspicious activity instead of just accepting the fiduciary’s COVID-related excuses.
Outright Stealing From Distracted Beneficiaries
In worst-case scenarios, fiduciaries may use the general mayhem of COVID-19 to pocket funds directly. During COVID-19, board meetings and other accountability checks may be delayed. This gives fiduciaries more time to move funds to their private accounts without being detected. Some may use the lack of supervision to plan a getaway or frame someone else for the crime. It is tempting to put off financial matters until a calmer time, but doing so makes it easier for fiduciaries to steal.
Take Action Against Bad Fiduciaries
Being aware of how a bad fiduciary can use COVID to take advantage of a person helps prevent these sorts of situations from happening. However, what should you do if a bad fiduciary is already taking advantage of you or a loved one? If this situation occurs, you need an estate planning litigation lawyer to help you file a claim. You can make a legal claim in court alleging that there has been a breach of fiduciary duty. If you can successfully prove your claim, you may be able to get the fiduciary replaced or ensure that he or she has to pay compensation.
When you want a knowledgeable estate planning litigation lawyer on your side, turn to the Knee Law Firm. We help clients in the Hackensack area with a variety of estate planning tasks, including making wills, organizing trusts and handling litigation. During COVID, we are operating remotely to keep our clients and team safe. Call (201) 996-1200 or fill out our contact form to arrange your consultation.