Siblings Who Swindle Siblings

Shady character can be revealed when it's time to divide money or family treasures.

Reviewed by Margaret Foley

Key points

• Discovering that a sibling is stealing from an estate can be devastating, financially and psychologically.
• Confusing financial transactions in a parent's account or changes to estate planning documents are red flags.
• When parents participate in the swindle, children are dealt a crushing psychological blow.

Recently, on my website, a man—stunned by his brother’s shady behavior—asked me this burning question:

My mother passed away recently, and my brother is acting strange. He won't show me Mum’s bank statement. I’ve managed to get copies, and the money is gone! Have you ever run across a case like this?

Yes!

There are similar stories from others who discovered in the last stages of a parent's life that they had been swindled by a sibling.

Louisa, 60, says her older brother, who abused her as a child, extorted their parents out of a shocking sum of money. Her brother weaponized his children, threatening that his parents couldn’t see their grandchildren unless they handed over thousands of dollars.

"It amounted to a ‘pay to play’ scheme within the family," she says. "He bilked our parents out of their money before they died.”

During her life, Louisa’s mother lived in fear of being isolated from her son’s seven children. When the mother died, Louisa (a co-trustee with her brother of the estate) discovered the financial details. For more than 40 years—from 1982 to 2003—Louisa's mother had kept all canceled checks and had recorded in 13 log books her payments to her son. In total, Louisa’s mother paid $2 million to his family in her desperation to be a grandmother. This money came on top of other gifts to her son's family—mortgage payoffs, contributions to monthly bills, shopping sprees for the entire family, new cars for him and his wife, and even a hot tub. Louisa received almost nothing.

“In the last conversation I ever had with my mother,” Louisa says, “she admitted to me, ‘I was a terrible mother.’ I didn't know then what she meant. Now I know.”

Here are a few other cases:

• Carole, a 64-year-old nurse who has two brothers, learned after her parents’ deaths that they had changed the family trust years earlier, bequeathing a valuable and coveted beachfront home to one brother. She and her other brother had paid off her parents’ reverse mortgage years earlier, with the promise that the beachfront home would be divided evenly among the three children. Her parents had lied about the will for five years. Carole—who had avoided confrontation for most of her life—was so outraged that she sued the scheming brother and, to her surprise, won the case. “The judge determined this was a ‘fraudulent transfer,’” she says. “I am so glad I finally found my voice at 62!”
• A woman handling her ailing mother’s accounts transferred a large sum of money into her private account and spent it, without informing or consulting her siblings. The mother had wanted the money to be divided evenly among her three children. Others have described a similar larceny involving conniving siblings who steal family treasures before everyone has had a chance to decide who gets what.
• The trustee of an aunt’s $8 million trust divided the bulk of the money equitably among eight family members—but the trustee then determined that the $350,000 in the aunt’s checking account, which was not in the trust, belonged to him alone.

Signs of sibling theft

Discovering that a sibling is stealing from an estate is devastating, both financially and psychologically. Scott Rahn, an attorney at RMO Probate Litigation—a firm specializing in probate litigation involving contested trust, estate, probate, and conservatorship matters in California and Texas—says it’s important to identify the issue as early as possible to minimize losses. This type of theft is actually common, Rahn says, and family members should know the signs, including:

• Unexplained financial activity: Confusing transactions—large withdrawals or transfers; unusual increases in spending; new accounts or credit cards, or names added to existing accounts as authorized users, beneficiaries, or joint owners—are red flags.
• Sudden changes in estate planning documents: Newly named beneficiaries, executors, or trustees on a will or trust—especially when the new document disproportionately benefits one sibling—are another red flag.
• Possession of estate assets: Sometimes a sibling is caught red-handed with property or assets that belong to the estate. This sounds the alarm that these assets were acquired through theft.
• Interference with estate management: Siblings should be concerned if a brother or sister hires a new or different estate planning professional, limits access to information, or excludes siblings from the decision-making processes.

The psychological toll

The last stage of a parent’s life constitutes one of the most perilous moments for siblings. As a parent is dying, siblings vie for power, love, and family loyalty one last time, often resurrecting old family patterns. Difficult conflicts arise over who will make healthcare decisions for an elderly parent, who will pay for long‐term care, how the estate will be divided, and who will inherit precious family possessions.

In general, siblings can successfully navigate this stage if they have a solid relationship before a parent’s death. However, those who have had a frayed relationship prior to the parent’s last days may struggle with their sibling relationship during and after the estate is settled. As the money is being divided, a brother’s or sister’s mask may come off, revealing their devious traits.

When parents are involved in the deception, it calls into question everything a child knows about the family. Carole, who discovered that her parents had participated in the swindle, says she is haunted by their “brutally cruel” behavior.

“I wonder, what was ‘the family narrative’ about me?” she says. “I was duped! I can't discuss it with my parents, who are no longer here. It has left the whole family fragmented forever.”

Many siblings who have been swindled say that peace comes with the end of these toxic relationships. “The happiest day of my life,” Louisa says, “was when my mom passed; I knew I didn’t have to have any contact with any of them again.”