Undue Influence and the “Trust Factor”: How to Assert and Defend Against a Claim of Undue Influence (Part 3 of a 4 part series)

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Probate and Trust Litigation Attorney

In my last several posts I discussed examples of confidential relationships, defined the term, and offered case law to explain the concepts involved. To read these articles click here: (PART 1) (PART 2).

In this article I will more fully expand upon my prior two posts to further develop the analysis for a better understanding of the subject matter.

As I earlier stated our courts have recognized that simply developing a confidential relationship with an elderly person or someone in a weakened state is not enough to sustain a presumption of undue influence. The events and circumstances leading up to the development of a new estate plan must be of a suspicious nature such that a court concludes that the testator was improperly influenced by the defendant. A slight amount of suspicion is all that is required to establish this element and shift the burden to the defendant to explain away the questionable act(ions).

A person who is debilitated and dependent on a child, with whom she lives with, who then changes her estate plan to distribute all of her property to the daughter and takes property away from the grandchildren from the other side of her family, is presumed to be under the undue influence of that daughter. In one case the mother-testatrix had her own house, which she shared with her daughter and two grandsons. The daughter died, and the grandsons moved away, so the parent sold her home and went to live with the other daughter. She lived with her, her husband and four children, so in total, she had six grandchildren. Before her move, mom’s will created two trusts with equal amounts of money, one for each family of grandchildren. Later, grandmom met the attorney for her surviving daughter about her estate plans. It was when the attorney for the grandmother talked privately that she mentioned the pressure she was under to change her will to give more money to the one set of grandchildren. The attorney’s suspicions of undue influence grew after the daughter sent a letter to him telling him to draft up a new will giving all her property to her and to give a right to “sprinkle money to Grandchildren when necessary”. She then met with counsel informing him to change the distribution method to per capita from per stirpes after hearing that the plaintiffs would get twice as much as the other grandchildren. Two trust agreements were prepared giving all property to surviving daughter with the remainder equally divided to all grandchildren so that, if exercised, there might be nothing left when she died.

Under all of these facts, the court concluded that not only was a confidential relationship created due to mom’s age, disabilities and dependence on her daughter to function, but that suspicious circumstances were created when “following the establishment of the confidential relationship of the daughter’s attorney with the testatrix, there was a drastic change in the testamentary dispositions of the testatrix, which favored the daughter.” This change in disposition of assets, along with her use of an attorney who had a conflict of interest because he represented the interest of the daughter, caused the Supreme Court to uphold the trial court’s determination of a presumption of undue influence.

Similarly, making gifts to one’s self after being appointed the power of attorney for a low-functioning testatrix and not giving him or her an opportunity to seek counsel and understand how his or her property is to be dispensed is also considered the product of undue influence. In one reported case the testator, was a widow with no children but had a brother who had a son. The grandson and grandmother did not have much contact until his dad died. Then he called his grandmother. After speaking to him, she asked the grandson to fly out to visit her. Previously, she had suffered a stroke, limiting her memory and vision, and he was asked to drive her to her lawyer’s office so she could name him her alternate power of attorney. The current power of attorney, called the grandson stating that grandma wanted to make him her sole heir, a departure from her previous will. The sole power of attorney died a couple of months later, making grandson the sole power of attorney.

Believing himself to be the sole heir, and now in control of grandma’s finances as power of attorney, he made gifts to himself, his wife, and his daughter without consulting grandma about this change, and hired an Arizona attorney to prepare a living trust and pour-over will on behalf of grandmom, naming him (grandson) as trustee and executor. The attorney instructed him to have these documents independently reviewed by a lawyer in New Jersey, but he ignored the advice. He flew into New Jersey and visited her in the nursing home, reading the documents to her as she dozed in and out. The grandson conceded that he only had a high school level education and could not explain to grandmom any of the language in the trust or will. Despite this, he executed the documents after reading them to her and attempted to take control of her interest in a family real estate venture after making himself full-time manager of her funds under his power of attorney position.

Upon hearing of this, a family member who ran the family business, refused to let the grandson take control of the business claiming he unduly influenced his grandmother. He filed for probate of her will after her death so he could gain control of the interest in the business. The court concluded a confidential relationship was created due to her weakened condition and the grandson being the sole power of attorney and visitor to the nursing home. As to whether there were suspicious circumstances, the court found that the grandson was overbearing as he seized control of her assets and interests as soon as he became power of attorney upon the death of the previous power of attorney. This seizure, combined with drafting a new will to give him everything and not allowing the grandmother to consult with her own lawyer about these documents, rejecting the advice given to him by the Arizona attorney, were acts that did not have grandma’s interests at heart, but [instead were] bent on his own enrichment at her expense.” The court found a presumption of undue influence existed and also from the record, there was nothing in his favor to overcome this presumption.

In my next post I’ll further discuss the issue of evidence and burden of proof in undue influence cases.

To discuss your NJ Estate Planning and Trust matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.