Obligation to account and provide an explanation after financial abuse of an elderly person

In practice, we regularly see that heirs wonder what they can do if they suspect that someone has financially abused, for example, their father or mother. This suspicion often arises when the parent has died and the inheritance is a lot lower than expected and there was another family member who helped the testator with the finances during his or her last years of life. In the age of internet banking, it is easy to transfer money. But what are you entitled to as an heir if you suspect that part of the inheritance has disappeared due to the actions of someone else? This blog discusses the legal options for the heirs to do something about the financial abuse afterwards.

In the event that you, as an heir, suspect that money has disappeared, you will probably want to gain insight into the testator's financial administration to see if your suspicions are correct. However, a request for an account and statement is not easily granted. The case law shows a very variable picture.

Right to an account and accountability?

According to settled case law, an obligation to render an account and provide an explanation can be assumed if a legal relationship exists or has existed between the parties under which one party is obliged to the other (the beneficiary) to account for the propriety of any property law policy. Such a relationship can arise from the law, a legal act or unwritten law.

For example, an obligation to render an account and provide an explanation may be included in a power of attorney. A power of attorney is the authority that a principal grants to another person to perform legal acts in his name. For example, a power of attorney may be granted for the management of finances, in which the obligation to render an account and provide an explanation is explicitly included. For the obligation to render an account and provide an explanation to arise on the basis of such a power of attorney, the authorized representative must also have actually conducted the management.

In the event that a power of attorney has been granted by the testator, but that power of attorney does not explicitly include the obligation to render an account and provide an explanation, there may still be an obligation to render an account and provide an explanation under certain circumstances. This may be the case on the basis of unwritten law. This may also be the case if no power of attorney has been granted.

If there is a legal relationship that is related to one or more cases regulated by law in which such an obligation is laid down, such as community, assignment or agency, this may contribute to the judgment that an obligation exists on the basis of unwritten law to render an account and statement of the management conducted. Circumstances that may also play a role in the existence of an obligation on the basis of unwritten law include:

1. The reason for conducting management
2. The relationship between administrator and beneficiary
3. What was customary in the relationship between the parties
4. The extent to which the person in charge could and was allowed to act independently
5. The extent to which the beneficiary has been able to oversee the actions of the person managing the property and to defend his interests.

In this respect, case law distinguishes between testators who no longer managed the estate themselves and testators who received assistance and who also managed the estate themselves. If the testator received assistance but also managed his own finances, there is usually no obligation to render an account and statement after death. During his lifetime, the testator can then request an account and statement from the person from whom he received assistance. If the testator did not request an account and statement during his lifetime, it may be assumed that the financial transactions were carried out with the consent of the testator. For that reason, in this case there is in principle no obligation to render an account and statement after death.

In the other case, if the testator himself no longer managed the financial affairs and someone else did, the obligation to account and render an account may exist under certain circumstances. For example, if the testator was in a vulnerable and dependent position, an obligation to render an account may arise from that dependent situation under unwritten law. This obligation may also exist if the testator was unable to oversee the actions of the person who managed the affairs (due to incapacity). However, in family relationships in which one of the children assumes the care tasks, including the management of the finances, it is appropriate to exercise some restraint in establishing this obligation, in the sense that not every small expenditure needs to be accounted for. However, this restraint is limited in the case of financial transactions that the child has performed on his own behalf and financial transactions that, in terms of nature and/or size, cannot be considered part of the normal spending pattern of the testatrix (GHAMS:2017:1272 and RBMNE:2019:2313). In addition, the fact that the testator did not request an account and statement during his lifetime is no reason to assume that the testator agreed to these actions or had no objection to these actions. Furthermore, the obligation to account and statement applies even more strongly if there are clear indications of improper use of the power of attorney and there is no explicit obligation included in the power of attorney to render an account and statement.

How does this work in my case?

How it is in your case depends on the circumstances of the case. We can provide excellent advice on whether there is an obligation to render an account and accountability in your case. Our office has extensive experience in assisting heirs with these types of issues.