Unauthorised or Unfair Transfers During the Life of the Deceased

Unfortunately, disputes often arise upon the death of a family member, it is an emotional time that can be exacerbated when beneficiaries believe that unauthorized or unfair transfers were made during the life of the deceased. Aside from the emotional despair, such unauthorized or unfair transfers impact beneficiaries, as their inheritance from the Estate is reduced.

The solution is usually forensic exercises to work out which transfers were authorized or lawful; transfers that were unauthorized or unlawful will be “clawed back” into the Estate.  However, forensic investigations may be time-consuming and costly, as it usually results in litigation. According to Hong Kong’s Social Welfare Department, between January to March 2020, at least 15 cases of elder financial abuse were recorded.

Examples of unauthorized or unfair transfers

There are many ways in which unauthorized or unfair transfers may occur during the life of a testator (a person who has made a Will or given a legacy), particularly in their later years. Very often, the mental incapacity of the testator contributes to such unauthorized or unfair transfers, as he/she becomes more vulnerable. Here are a few examples:

• using the testator’s bank account or credit card without their consent;
• falsifying records or forging signatures for the testator’s Will or cheques;
• investments made without knowledge or consent – these often include high fees or trading activity that may generate commissions for financial advisors;
• inappropriate sales/purchase of insurance policies; and
• coercion into changing their Will, for example, to gift certain assets such as property title(s).