Inheritance Scams: Red Flags to Prevent Fraud

A common inheritance scam in Canada involves an individual contacting a person, often by phone or email, claiming to be the executor for the estate of a ‘long lost relative’ who the person has never met. They tell the person that they are to receive a large inheritance from the estate, and in order to receive it personal banking details must be given to them to arrange the transfer of the inheritance. It is also common that they request a moderate sum of money in order to facilitate access to the funds from the bank, though they assure the victim that the money will be returned in the inheritance. Sometimes, it’s painfully obvious when a person is a target of a scam such as this one, but many people are more vulnerable to online scams and sadly fall victim, losing considerable sums of money.

Receiving an Inheritance in British Columbia

In British Columbia, a person does not have to pay or give anything to receive an inheritance. An inheritance is a gift, meaning it is received for free. Further, there are no gift taxes or inheritance taxes in British Columbia. Any taxes the estate owes will be paid out before the inheritance is distributed. If an executor or supposed executor is asking for money for fees or taxes to be paid to distribute the inheritance, it is very likely that the person is trying to scam a victim. Beneficiaries do not pay any of the estate’s fees or taxes – this is the responsibility of the estate executor, using the estate’s funds. The only information an executor might need is your bank account number to transfer funds into or an address to ship physical assets to.

Detecting Inheritance Scams

While it might sound far-fetched that a distant relative who a person has never heard of has left them a large inheritance, it is a possibility. When someone dies intestate (without a valid will) in British Columbia, their assets are distributed according to the intestacy laws. By the chain of rightful heirs for an intestate estate, it is possible that a very distant relative is entitled to the estate. The courts will track down heirs to give them their inheritance. It might seem unrealistic; however, it could (and does) happen. Because of this, a letter or email indicating that a person has been identified as a beneficiary of an estate should not be immediately brushed off as a scam.

Usually, inheritance scammers are careful to craft their emails or letters to create the illusion that they are coming from credible law firms in your city. If you search for the firm’s name in the fraudulent letter, it will typically be a real place. Further, scammers sometimes have access to some personal information such as your name, address or family member names. This makes it look as if they are a legitimate organization.

To detect an inheritance scam, the first spot to look is at the sender’s address. If it’s an email, you can check the address to see where the email came from and it will usually not be a standard email address. Most law firms will have a custom mailing address with the name of their firm. For example, our firm uses @leaguelaw.com as the domain name for all staff email addresses. Another indicator of fraud is that there will usually be spelling, grammatical, or even basic English language errors in the letter. In general, law firms are very particular with their language and will not have any of these errors in their writing.

As provided by the Australian Competition & Consumer Commission’s Scamwatch, an example of a standard inheritance scam letter – see the inheritance scam letter here.

Fraudulent Wills

Another type of inheritance scam is done using a fraudulent will. With the ability of the Wills, Estates and Succession Act to cure imperfect documents into valid wills, it can be quite difficult to detect these types of scams. Usually, a fraudulent will is handwritten and lacks the witness signatures required of a valid will. The difficulty arises because the courts can cure an invalid will that does not meet the usual requirements into a valid will. The only way to know the will is invalid is if a person is certain that the named testator was not the one who wrote the document. It can be difficult and incredibly time-consuming to prove whether or not a document was written by a particular person.

To prevent being involved in inheritance scams, understand that you will never have to pay out-of-pocket for estate administration or estate inheritances. The estate is responsible for paying any fees or taxes that arise from the estate.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.