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Hands pulling strings

Undue influence claims can be costly; don't let your estate plan be compromised

by Robert Fischer | Contributor
June 25, 2021

A common reason for challenging the validity of a last will and testament is to raise a claim that the deceased person, known as the testator, created their will or otherwise gifted would-be inheritance due to the manipulation and pressure of an unscrupulous person in a position to take advantage of them.

These claims may be brought even where there has been no foul play. Disinherited or disappointed family members may feel that they received less than their fair share and may begin to point fingers at bona fide beneficiaries, alleging that there must have been coercion.

The parties seeking to invalidate the document based on manipulation of this kind will often file a claim based in the legal doctrine of undue influence. Fundamentally, the claim is rooted in the premise that an individual uses exploitative methods to overcome the free will of a testator to give their assets to whomever they please. This is particularly true where the testator is in a weakened mental or physical condition, whether this is due to age and/or cognitive or mental disorders. Often, the alleged abuser is said to have taken advantage of the older person's weakened state by exerting pressure on the individual to change or create estate planning documents in a way that benefits the abuser. Other times, large gifts may be made to the person during the testator's life that eat up the assets of the estate's distribution.

Dominant vs. vulnerable party

What does an undue influence scenario ordinarily look like? Typically, conduct that would constitute undue influence would be those actions that rise beyond mere annoyance or repeated requests by the alleged abuser; again, the party in the position of dominance must overcome or subvert the intentions of the vulnerable testator. This subversion results in certain dispositions of property that would not otherwise have been made.

Individuals closest to the testator during the final stages of their life are often looked at suspiciously by other beneficiaries. This is because they are in a position to most easily take advantage of the testator's trust - it puts them in a position of dominance over the testator. Common relationships susceptible to drawing this suspicion might be hired or voluntary caretakers, children of the testator, friends or neighbors.

Specific examples of behavior that may be considered undue influence between the parties include the following:

  1. The dominant party may make threats to remove support services that the individual might be providing if the vulnerable party does not agree to make substantial gifts to the caretaker.
  2. The vulnerable party may be the victim of a direct threat to cut off the individual's contact from the rest of the family or social circle.
  3. The dominant party may fabricate stories about other potential beneficiaries with the aim of eroding the relationship the vulnerable party has with that person.
  4. The vulnerable party may be purposefully isolated from the other potential beneficiaries by way of screening phone calls or mail from those parties.

As stated, undue influence claims will prompt a court to inquire as to whether the testator was of a weakened intellect at the time the coerced gift or creation of the will disinheriting the challenging party. A court will be strongly influenced to make a finding of a weakened intellect where the testator is diagnosed with a degenerative cognitive disorder, such as dementia, or has experienced a major change in medical status that could negatively affect mental capacity or necessitate an increased need for care and support.

Common methodologies

There are a certain transactions or estate planning maneuvers that may tip a court off that improper influence has occurred. Such transactions may include:

  1. The vulnerable testator might make unusual, repeated or extraordinarily large gifts to the dominant party.
  2. The testator may make sudden and major changes to a will or appointment of an agent under a power of attorney document.
  3. The testator may sell property to the dominant party at a price far below fair market value.
  4. The testator may suddenly add the dominant party as the joint owner of a bank account.

A litigation quagmire for all parties involved

Whether you are a party bringing this type of claim, or whether you are accused of the same, the costs of litigation can be extraordinary. Undue influence claims that successfully invalidate a will notoriously involve a steep uphill legal battle for litigants. Similarly, potentially well-meaning caretakers can be caught in long, drawn-out litigation defending themselves. In either case, both parties will need to take on great expense to get a final resolution, sometimes exceeding the value of the estate. It can truly be a lose-lose for all involved.

In the case of a party bringing a claim, undue influence may be difficult to prove because the evidence of the manipulative behavior is often subtle and circumstantial. These cases involve a primary witness that is now deceased and is therefore not available to explain what he or she was thinking or feeling when the will was drafted, or the gift given. Further, in most cases where there are truly insidious manipulations of one party over the other, these will be deliberately concealed from the public eye.

On the other hand, an innocent defending party may have no proof to show that the transfers were the true will of the testator, which will present problems mounting a defense.

Whether or not a litigant feels that the evidence for undue influence is undeniable, the juice may not be worth the squeeze, even if the person "wins" at court. This is demonstrated in the following example:

Imagine that an elderly mother had an existing will that distributed all estate assets to her only daughter at 50% and her only son the other half. The daughter had the occasion to see and discuss the will multiple times with her mother. She expected that, when her mother passes away, she will be the beneficiary of her mother's savings account in the amount of $10,000. After the death of the parent, a will was submitted to probate by a neighbor, which purported to distribute $9,000 of the assets to the neighbor, and $1,000 to the daughter and son, to be divided amongst them. The daughter, feeling disappointed, searches her mother's house and finds a ledger showing periodic payments to the neighbor.

Further, it becomes known to the daughter that, when the mother and the neighbor went to a local law office to have her estate plan drafted, the lawyer there met with the neighbor and the mother together, and during the meeting the mother indicated to the lawyer that she would like 90% of her estate's distribution to go to her child, and 10% to go to the neighbor. The neighbor requested to meet with the parent alone, and the attorney stepped out of the office. Upon the attorney's return, the mother changed her mind completely and indicated that in fact she wanted 90% to go to her trusted neighbor, and the remaining 10% to go to her daughter and son. The attorney thinks nothing of it and drafts the will as stated.

The daughter, as the result of this newfound information, now feels that this case will be open and shut. To the aggrieved daughter, it may appear that because the available evidence is so overwhelming, the decision to litigate is obvious. She goes to the family attorney and asks them what can be done. The attorney tells her that, even though the case seems strong based on the evidence, the costs of litigation will likely range between $10,000 and $20,000. The daughter moves forward with the litigation, and her efforts are awarding with a judgment in her favor: the will is invalidated, and the estate is divided between the daughter and the son, $5,000 each.

Small gift wrapped with cash

As it turns out, the neighbor had been providing care to the mother for years - care which the mother had desperately needed. The two had a hand-shake agreement that would compensate the neighbor on very fair terms for the services provided and saved her from having to hire someone to do the same at a higher cost. Over the years, these services added up, and the mother wanted to make sure that the neighbor received their fair share. The neighbor was ultimately unable to prove this.

As you can see, in this scenario, all parties lose. A boatload of money was spent on attorneys and court costs to no party's benefit. Well-meaning caretaker beneficiaries such as the neighbor, who diligently provided loving care and support at the end-stages of the person's life, may get caught in litigation that may not only defeat their compensation but may end up costing them a great deal of their own money. Worse still, the mother's dying wishes and desired distributions have been altogether thwarted.

Based on the above scenario, it may seem that this sort of litigation, due to its typical lack of cost-effectiveness, would be uncommon. However, this is often not the case. Notwithstanding the high cost, litigants in these cases are very emotional - some might say for good reason. They feel robbed and disgusted that their loved one has been exploited. Without regard for the cost-benefit analysis outlook described above, they may litigate aggressively.

Preventative measures

The challenging party brining the claim is generally best suited to avoid litigation by becoming involved before a problem arises. For example, in our hypothetical, the daughter, had she known the warning signs, could have insisted that the caretaker relationship was documented. She could have spoken with her mother and suggested she write down her intentions.

On the other hand, benevolent beneficiaries such as the neighbor must take certain measures to avoid any potential claims. There are certain preventative measures that be taken to lessen the risk that this destructive litigation is pursued. The following six courses of action are recommended to avoid uncertainty:

  1. Any potential beneficiary attending a meeting to draft an estate plan should insist that the attorney meet with that party alone. In the event that the testator would like the support of the beneficiary in the meeting, ensure that the attorney meet with the testator before the appointment alone before meeting with both.
  2. Request that the attorney assist the testator to create a memorandum explaining the reasoning for their desired distribution. Ask that the memorandum is physically attached to the will document and referenced specifically in the will.
  3. Avoid adding a beneficiary to joint bank accounts, especially where the beneficiary is not the spouse.
  4. Avoid accepting large gifts or purchasing items from the testator for below market value.
  5. If the testator seeks to compensate a caretaker friend or family member for services rendered during the testator's life, create a caretaker agreement, which clearly states the services to be provided and the compensation to be paid.
  6. Communicate the decisions of the testator to other potential beneficiaries, particularly where they have been disinherited relative to a prior will. This will allow the opportunity for the aggrieved beneficiary to determine for themselves the reason for the seemingly unfair distribution.

A party that is bringing an undue influence claim must consider whether or not the extraordinary costs of litigation is worthwhile in light of the relatively low probability of a successful claim and must view this in light of the relative size of the estate. On the other hand, a party defending an undue influence can become very much intertwined in lengthy and costly litigation. Any potential beneficiary should always approach the support and handling of assets of a loved one carefully, bearing in mind that even good intentions are not enough to protect them where a possible disappointed beneficiary exists. Recognition of warning signs and proper planning will serve to prevent unnecessary litigation and will thus preserve the testamentary intent of loved ones.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

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