Inheritance hijackers: Syndicates cash in on deceased estates

Highly sophisticated syndicates are intercepting payouts intended for beneficiaries of deceased estates by fabricating executor and power of attorney documents.

The fraud, known in the financial industry as deceased estate fraud, is on the rise. Criminals often target the Master’s Office, a division of the high court where deceased estates are lodged, or use cybercrime to target legal firms and email chains.

When fraudsters intercept documents submitted to the Master’s Office – usually in paper form, such as a list of assets, a will, a death certificate and a power of attorney – they can use the information to make false claims to insurers, banks and asset managers.

Momentum Group paid out roughly R90 million in its 2026 financial year after criminals managed to steal data from lawyers’ offices where legitimate lawyers were acting as executors of estates.

The syndicates duplicated documents and posed as estate executors to defraud the insurer as part of an operation targeting multiple financial firms.

Group CEO Jeannette Marais said on RSG Geldsake that Momentum’s losses from deceased estate fraud were among the lowest in the industry over the past year. She noted that the financial industry is working together to tackle the problem.

The Association for Savings and Investment South Africa (Asisa) said there is an industry-wide collaborative effort to combat the fraud, describing it as highly sophisticated.

Helen du Toit, a member of the Asisa Forensic Standing Committee and an expert on deceased estate fraud, and investigator Johan Steyn, head of life and operations at the South African Insurance Credit Bureau, both identified the Master’s Office as a point of weakness.

“One of the problems with the Master’s Office is hand-delivered documents can be intercepted. With Sars, for example, you log in and submit documents. We need a similar system with the Masters of the Court and Home Affairs so financial institutions can find a source of truth [as to who the correct estate executors are],” says Du Toit.

She adds that although an online system has been introduced at the Master’s Office, several problems remain, meaning documents are still submitted in hard copy.

It is also common in South Africa for people who believe their estate is of low value and their will uncomplicated to appoint a family member as executor, she said.

The family member may then sign a power of attorney giving a lawyer authority to administer the estate. This document can subsequently be intercepted or duplicated by criminals.

How the fraud works

• Documents submitted to the Master’s Office at the high court are vulnerable to interception, particularly as people often pay runners to queue on their behalf. These runners may have access to documents that can then be photocopied and passed on to syndicates.
• Deaths can be registered through the Department of Home Affairs, South African Police Service (SAPS), an embassy or a funeral undertaker, creating multiple points at which information can potentially be exposed.
• Less commonly, criminals manipulate the Home Affairs population register to record a living person as deceased. This is similar to a marriage scam seen several years ago in which people discovered they had been registered as married without their knowledge.
• Syndicates identify employees at financial firms through social media and ask which documents may be missing from a life insurance or similar claim. They then send exact but fraudulent documents, often using email addresses that closely resemble those of legitimate executors.
• The Master’s Office has a public portal listing deceased estates. Criminal syndicates can use this information to identify estates that may be vulnerable to fraud, such as those involving beneficiaries living overseas or where there have been lengthy delays. They can then target those estates, sometimes with the help of insiders at law firms.

A working group under the South African Anti-Money Laundering Integrated Task Force (Samlit) has been investigating the issue since the beginning of 2026, says Du Toit.

The group is preparing a white paper on deceased estate fraud.

Samlit is a public-private partnership comprising the country’s major banks, the Financial Intelligence Centre, the South African Reserve Bank’s Prudential Authority, international banking institutions, the South African Banking Risk Information Centre and the Banking Association of South Africa.

Once the money is gone

Steyn and Du Toit explain that once a payout is made into a deceased estate bank account set up by fraudsters, the money can disappear rapidly.

Steyn cites one case with approximately R7 million being paid into different accounts in less than a week.

The pair say criminals seeking to empty deceased estate accounts quickly often recruit people to use their bank accounts to transfer money for a small fee.

These individuals, known as money mules, often do not realise that their accounts are being used in sophisticated criminal operations, which makes it harder to track where the money ultimately is paid.

Du Toit says money taken from deceased estate bank accounts is also being converted into cryptocurrency.

The fraud affects everyone with a life insurance, retirement or savings policy because losses and the costs of preventing fraud can ultimately feed into premiums and fees.

This is one reason insurers and banks are working together to combat the problem.

Deceased estate fraud on the rise

In 2023, Asisa identified deceased estate fraud as an emerging concern and asked its members to introduce two new fraud-reporting categories:

1. Murder for insurance payouts, and
2. Deceased estate fraud.

In 2024, it established a task team to tackle deceased estate fraud. The number of incidents targeting life insurance policies of deceased people increased from 20 in 2023 to 67 in 2024.

Fraud targeting investments such as retirement products and unit trusts rose from 34 incidents in 2023 to 94 the following year. Asisa said statistics for 2025 are not yet available.

The total amount lost in 2024 was estimated at R18.9 million, significantly lower than that believed to have been lost in 2026.

How to protect an estate

• Make a proper will and ensure trusted people know where it is kept.
• Appoint an executor, ideally a professional, rather than relying on relatives.
• Executors should contact financial institutions promptly, identify themselves and provide their telephone number and workplace details. This allows financial institutions to verify their identity before making payouts. Du Toit says institutions need a reliable source of truth for executor contact details.
• Check the Master’s Office portal to confirm who has been appointed as executor, whether the beneficiaries appear legitimate and whether the claim was lodged correctly at the court in the city where the deceased lived or died. Unexplained changes, such as new lawyers or unusual beneficiaries, should raise concerns.

By the time people realise the money has disappeared, it is often too late, Steyn says.

The Department of Justice did not respond to requests for comment.

This article was republished from Moneyweb. Read the original here.