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  • Writer's pictureJerry Ipsen, CFE, MBA

More Ways CFEs Can Help Probate Attorneys - Part II

Fiduciary’s Commingling of Funds

When it comes to allegations of commingling, both the intent and actions of the fiduciary must be considered. The CFE’s fraud examination can influence a beneficiary’s decision to pursue criminal and/or civil remedies, if warranted. The same fraud examination procedures can help clear accusations brought against a fiduciary. A CFE can help counsel and their client from either perspective.


Statutory Durable Power of Attorneys

CFEs could assist in resolving a fiduciary dispute from several perspectives. First, fiduciaries or their counsel could retain a CFE to assist the fiduciary in preparing the accounting and defending the fiduciary’s decisions. Second, beneficiaries, often family members who may be disgruntled or simply frustrated, could retain a CFE to review the fiduciary’s accounting and trace the reported amounts to the underlying documentation, such as bank statements, supporting paid bills, receipts, credit card statements, etc. Third, counsel from both sides, the fiduciaries, and the beneficiaries’, might agree to mutually engage a CFE to report back to both counsels upon performing an independent analysis of the accounting, transactions, and activity, maximizing efficiencies by utilizing one expert, and minimizing the cost to both sides.


Guardianships

As with other types of fiduciary relationships, there are occasions when allegations are raised about the guardian’s handling of transactions and funds, decisions that were made, and overall mishandling or misusing funds while acting as guardian. As with Statutory Durable Power of Attorneys, the CFE could assist the guardian in preparing the accountings and defending against accusations or assist counsel representing the beneficiaries by reviewing the transactions and activity. Either side could retain a CFE, or they could decide to mutually engage one expert.


Trusts

In addition to assisting counsel in disputed fiduciary trust matters similar to those discussed above, a CFE is often viewed as the fiscally responsible individual who could be retained to act in the best interest of the beneficiaries, regardless of the type of trust. Appointing a CFE to act as the fiduciary, such as a conservator or trustee, and requiring both transparency and regular reporting, may help all parties get peace of mind that the funds and assets entrusted under the fiduciary relationship will be best utilized for their intended purposes.

Fiduciary Fraud

Fiduciary Fraud can best be addressed by having a CFE involved to help resolve financial issues.


Information for this blog piece was sourced from the article " Fiduciary Fraud: When Trusted Individuals Turn Untrustworthy" by Stephen Pedneault, CFE, CPA/CFF




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