Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Elder Abuse Attorney
Incapacity and lack of capacity are the most frequent claims made when allegations of fraud and involuntary gifting are asserted. Claims of elder abuse and elder financial exploitation are often made because of the elderly person’s physical or mental incapacity or the undue influence of another person.
While doctors and lawyers define the term “capacity” or “lack of capacity” differently, it is agreed that capacity involves the ability to understand and process information, so that a reasoned and rational decision can be made and communicated. New Jersey defines an ‘incapacitated individual” as “an individual who is impaired by reason of mental illness or mental deficiency to the extent that he or she lacks sufficient capacity to govern herself or himself and manage his or hers affairs”. The law in New Jersey also defines an “incapacitated individual” as “an individual who is impaired by reason of physical illness or disability, chronic use of drugs, chronic alcoholism or other cause(s) (except being underage) to the extent that he lacks sufficient capacity to govern himself and manage his affairs”.
One important point must be emphasized when the issue of capacity and the elderly is brought up. Each case stands on its own facts. The law is the same but with different fact patterns. The decisions made based on these facts and the actions taken by the elderly person require different standards of capacity. Let’s look at each one.
The above definitions may seem complicated and in fact… they are, both legally and medically. As a result, many times a determination cannot be made until medical proofs are established. If you have questions about the topic of capacity because you believe elder financial abuse and exploitation may have taken place, please contact me, Fredrick P. Niemann, a New Jersey lawyer experienced in cases involving elder abuse and financial exploitation. I can be reached toll-free at (855) 376-5291 or email email@example.com. Let’s meet and discuss your concerns.
Sometimes gifts are made, money given away, wills signed and trusts funded because a person exercised undue influence over an elderly and vulnerable person. But what does the term “undue influence” mean under New Jersey law? Let’s find out now.
In effect, undue influence consists of either, mental, moral or physical coercion that causes a person to do something that he or she would not have normally done. Because of undue influence, the will or gift actually reflects the wishes and desires of the influencer (dominant person) not the person making the gift (weak person).
When addressing the possibility of undue influence, it is important to obtain information regarding the beneficiary(s). This evidence may show motive or the opportunity why the beneficiary(s) may have attempted to exert undue influence over the testator/donor at the time the will/trust or power of attorney was executed or over the donor at the time the gift was executed.
Not all influences are “undue” influence, however, and this is an important point to understand, to be “undue”, the influence must be such that it destroys a person’s free will and compels him or her to make an involuntary transfer of his or her property. Each case is governed by the facts and circumstances surrounding the execution of the will, trust, or power of attorney, or the making of the gift under a power of attorney or guardianship and the actions taken by the parties who took part in the gifting to determine if coercion or undue influence was exhibited.
The following physical illnesses are generally recognized as diminishing one’s mental capacity:
To be a valid gift and make a voluntary transfer of money in New Jersey, four elements must be found to exist:
If a person does not have donative capacity, then a gift cannot be made. A strategy to defend a “gift” can include reliance upon a general durable power of attorney (POA) providing the agent with gifting powers, including the specific power to make gifts. This power will allow the agent to effect gifts that the person may no longer be able to legally make or effect on his or her own.
New Jersey courts have permitted guardians or powers of attorney to make gifts and engage in estate planning, with a well written power of attorney. To learn more about the use of powers of attorney to make gifts or undertake crisis asset planning go to: www.powerofattorneylawyerinnj.com
A presumption of undue influence arises in situations where there is a confidential relationship and a dominant person in that relationship has gained a unique financial benefit due to that confidential relationship. In a will contest, trust dispute, power of attorney or guardianship fight, a presumption of undue influences arises when both a confidential relationship and “suspicious circumstances” exist.
The disinheritance of a family member or a disproportionate distribution of an estate in favor of a person can be grounds to suspect undue influence. For example: Where one child asks an attorney to prepare a will that disposes of a parent’s estate in a manner highly favorable to that child to the exclusion of his/her siblings; there may be a presumption of undue influence found to exist.
Do you have a question regarding financial elder abuse not addressed here? If so, contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org to schedule a consultation about your particular needs. He welcomes your calls and inquiries and you’ll find him very approachable and easy to talk to.
Please visit our related websites:
Introduction to Challenging a Gift Under a Will, Trust, Power of Attorney or Guardianship Involving Elder Financial Abuse and Lack of Capacity
Elder Abuse and Guardianship | Financial Abuse of the Elderly