Sometimes clients have concerns about whether their Estate Plan could withstand a challenge after their death. If the plan deviates from the equal treatment of all beneficiaries in the same class, then that may cause a client to worry about how best to protect the plan. Often the unequal treatment results because one beneficiary took on a caregiver role as the testator aged. Perhaps a niece or nephew stepped in when the client’s children were out of state. Regardless of the reason, many a beneficiary who has not received what they considered their “fair share” of an estate has challenged an Estate Plan based upon undue influence. This first part of a two-part series explores the concept of undue influence and the second part will provide practical advice for preventing an undue influence challenge in an Estate Plan.
Undue influence occurs when someone takes unfair advantage of another individual, usually elderly, especially when the first individual holds real or apparent authority over the elderly person. Simple enough to explain but harder to understand. To gain an understanding of what constitutes undue influence requires an examination of the underlying behavior. The American Bar Association indicates that undue influence occurs when an individual in a fiduciary capacity or other confidential relationship substitutes their own desires for that of the influenced person’s desires. Put another way, a person influenced the testator in such a way that convinced the testator to alter his or her Estate Plan, usually in favor of the individual exerting the undue influence and to the detriment of the testator’s other beneficiaries.
The states vary widely in their definition of undue influence. Some states, like Florida, Georgia, Louisiana, Nevada, North Dakota, South Dakota, and Ohio, have partial definitions in their statutes which broadly define undue influence as something that occurs when a fiduciary or confidential relationship exists and one person substitutes his own will for that of the donor’s will. Other states have definitions of undue influence in their civil code or penal code, rather than their probate code. In addition, most states, like California, have case law that sets out defining aspects of undue influence. It appears that most states rely upon case law to determine what constitutes undue influence and most of the time it occurs in the probate context. Each state lists certain factors that indicate the presence of undue influence, such as intimidation, physical threat, or coercion. Perpetrators of undue influence use subtle tactics and usually enjoy a close relationship with the testator.
In any undue influence case, it’s vital to understand which party has the burden of proof. While you may assume that all states impose that burden upon the plaintiff, that’s an oversimplification of the matter. Some states, like Florida, allow the plaintiff to demonstrate a few threshold facts that will raise the presumption of undue influence. Accordingly, when the presumption of undue influence arises, the alleged wrongdoer bears the burden of proving there was no undue influence. Usually, the defendant can easily overcome the presumption and the testator’s Estate Plan will stand.
Interestingly, Virginia recently enacted a statute effective July 1, 2022, essentially creating a presumption that undue influence occurred when alleged. While it’s unclear what facts the plaintiff will need to show to raise the presumption, this represents a departure from prior law which created a temporary presumption that defendants could easily overcome. The new law alters the burden of persuasion in most circumstances. Under the new statute, the plaintiff receives the benefit of a “presumption” that undue influence was exerted over the decedent, and the burden now shifts to the defendant to rebut that presumption. In other words, the defendant now has the job of convincing the jury or judge that undue influence did not occur, and if the defendant does not meet that burden of persuasion, the defendant will lose.
As this article demonstrates, undue influence is a grey area of the law. Certain facts provide clues that undue influence may have occurred. As noted above, if the person leaves their assets in a way that departs from the norm or favors one child to the exclusion of all others, that might be a sign of undue influence. If an elderly person disinherits their children or grandchildren in favor of their caregiver, that might also signal undue influence. Of course, that doesn’t mean that you cannot leave your assets in a usual manner. It simply means that if you choose a unique disposition for your assets you need to take additional precautions in creating your plan. Keep the possibility of an undue influence claim in mind.
There are many factors to consider when creating your Estate Plan and potential challenges to it. It’s important to evaluate your beneficiaries and understand whether they have expectations regarding an inheritance and how far they might be willing to go if your plan fails to meet those expectations. While many state legislatures are doing more to protect the elderly and their Estate Plans, others seem to be opening the door to increased litigation. By consulting an experienced Estate Planning attorney who focuses their practice in the area, you can minimize the risk of a challenge to your Estate Plan based upon undue influence.
Tereina Stidd, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
- Exploring the Many Issues Surrounding the Estate and Trust of Richard Blum – Part III - September 12, 2023
- Exploring the Many Issues Surrounding the Estate and Trust of Richard Blum – Part II - September 5, 2023
- Exploring the Many Issues Surrounding the Estate and Trust of Richard Blum – Part I - August 29, 2023