When Family Finances Turn Sour: Understanding & Preventing Money Conflicts

Introduction to Probate and Family Law Fraud

• Growing Concern: Probate fraud and family law fraud are now among the fastest-growing scams in the financial services industry, especially during major family events such as divorces, deaths, conservatorships, or transitions to long-term care.

Shifting Wealth Dynamics Across Generations

• Challenges for Younger Generations: Unlike previous generations, current generations (Gen Z, Millennials, Gen X) face significant economic barriers—high housing costs, inflation, and limited job opportunities—making it hard to build wealth.
• Older Generations’ Accumulated Wealth: Baby Boomers and earlier generations built wealth during more favorable economic conditions, making their saved assets a tempting target for younger family members.

Exploitation of Family Events for Financial Gain

• Inheritance Manipulation: Some individuals attempt to divert assets before a relative’s passing or while settling an estate.
• Asset Transfer in Divorces: In contentious divorces, one spouse may try to transfer assets to themselves before the proceedings to avoid sharing them with their partner.

Strategies Used in Financial Fraud Scams

• Hiding or Reducing Income: Individuals may create fake bank accounts, hide assets, or even lower their income intentionally to minimize spousal maintenance or child support obligations.

Protective Steps

• Seek Expert Guidance: If you’re facing a major family event, consider consulting legal professionals, doing asset research, and seeking reliable advice to protect your interests.
• Resources Available: Check the link below for recommended consultations and additional resources to help safeguard your family’s assets.

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In 2024 and beyond, probate fraud or family law fraud has become the fastest-growing type of scam in the financial services industry. What does that mean? Anytime there is a family event, such as a divorce, a death in the family, someone going into a conservatorship, or moving into long-term care, other relatives or parties in the family may view it as an opportunity to extract money from the family.

How does this work? In prior generations, younger family members were able to build up wealth and money through work, the economy, and their careers. However, the economy has changed, and now generations like Gen Z, Millennials, and Gen X are struggling to build wealth. They face challenges in buying homes, saving money, dealing with high inflation and insurance costs, and finding stable, well-paying jobs. In contrast, older generations, such as Baby Boomers, have accumulated wealth during a different economic period.

The wealth saved by these older generations, often passed down through probate, has become a tempting target for the younger generation. They don't want to wait until someone dies to access the money, or, if they do, they don’t want to risk not receiving as much as they expect. As a result, they may look at family events as an opportunity to divert money to themselves, even if they don’t deserve it. For instance, after someone dies, assets might be transferred before the will goes through, or in cases where someone is aging, relatives may take money and assets even before the person passes away.

This issue becomes even more prominent in cases of divorce. A spouse in a divorce may transfer assets to themselves in advance to avoid sharing them with the other spouse. Since the relationship is already contentious, with both parties already in conflict, some individuals feel justified in trying to hide or divert assets. They may create fake bank accounts, hide assets, or reduce their reported income to lower the amount they’ll need to pay in spousal maintenance or child support.

If you’re in a situation involving a major family event, it’s wise to seek advice. Consider doing a consultation, using the link below, getting legal advice from an attorney, or researching assets thoroughly before deciding what assets genuinely belong to you.