Undue Influence: Inter vivos transfers and Testamentary gifts

In the Matter of the Estate of Tsairis, Superior Court of New Jersey, Law Division, Essex County, Docket No. ESX-CP-0070-2009, the Court addresses the issues of Undue Influence in the execution of a Deed and a Will, as well as the issue of whether a Will had been revoked.

The decedent had four children. In 2000, she had a heart attack and had to undergo surgery. At around the same time, one of her daughters was going to have a Will prepared. So, the decedent and her husband went along with her and her husband, as well as others, to an attorney recommended by a friend of the decedent’s daughter. The Will prepared for the decedent named her daughter and her daughter’s husband as beneficiaries and executors. At the time of execution, the decedent was 75 years of age. Without explanation, the Will did not make any provision for the decedent’s husband or her children. The decedent also executed a general power of attorney at that same time.

The decedent’s husband died in 2005. Over the course of several weeks in June and July of 2008, the decedent met with three different attorneys to review her estate plan. The first attorney drafted documents which were never executed. The second attorney recommended that the decedent continue with the first attorney. The third attorney prepared a deed conveying the decedent’s home to the same daughter named as the only beneficiary in the 2000 Will. She died on October 28, 2008. One child had financial troubles and was accused of physically threatening his mother.

Undue influence is “mental, moral or physical persuasion so powerful that it has destroyed the free agency of a testator by preventing the testator from following the dictates of his or her own mind and will and instead being caused to accept the domination and influence of another.” The influence must be such as, “to destroy the testator’s free agency and to constrain him to do what he would not otherwise have done . . . [T]he coercion exerted upon the testator’s mind must be of a degree sufficient to turn the testator from disposing of his property according to his own desires by the substitution of the will of another which he is unable to resist or overcome.” Mere persuasion, suggestions, or the possession of influence and the opportunity to exert it are not enough.

A legal presumption exists that the testatrix was of sound mind and competent when she executed the [document] and the burden of proving undue influence is ordinarily upon the person asserting it and it must be clearly established. However, this burden may be shifted by the trigger of a rebuttable presumption of undue influence. Unlike undue influence regarding a Will, the presumption of undue influence regarding an inter vivos transfer does not require the existence of suspicious circumstances. In respect of an inter vivos gift, a presumption of undue influence arises when the contestant proves that the donee dominated the Will of the donor OR when a confidential relationship exists between the donor and donee. Then, the donee has the burden of showing by clear and convincing evidence not only that “no deception was practiced therein, no undue influence used, and that all was fair, open and voluntary, but that it was well understood.”

Here, the court found that the July 21, 2008 deed was the product of Undue Influence.

The validity of the May 23, 2000 Will is challenged on the ground that it was revoked, or in the alternative, that the equitable doctrines of estoppel or unclean hands bar the sole beneficiary in that Will from arguing against revocation. The relevant statutes and case law do not allow for oral revocation of a Will, rather a testator can revoke a Will or any part thereof by taking certain actions as delineated by statute: a testator can execute a subsequent Will; or a testator may perform a revocatory act such as burning, tearing, canceling, obliterating, or destroying the document with the intent and for the purpose of revoking the Will. The acts may be performed by the testator or by another person in his conscious presence and by his direction. Here, the Court found that the 2000 Will was not effectively revoked since insufficient action existed to support a finding of revocation even though the decedent may have had the state of mind or desire to revoke her previous Will.

Two necessary elements are required to raise a presumption of Undue Influence with regard to a Will, i.e., a confidential relationship between the testator and the beneficiary, and the presence of “suspicious circumstances.” A “confidential relationship” between the testator and a beneficiary, arises where trust is reposed by reason of the testator’s weakness or dependence or where the parties occupied relations in which reliance is naturally inspired or in fact exists. A confidential relationship “exists when the circumstances make it certain that the parties do not deal on equal terms, but on the one side there is an overmastering influence, or, on the other, weakness, dependence or trust, justifiably reposed. It does not exist where the parties deal on terms of equality” Among the confidential relationships natural in their origin, are those of parent and child.

Suspicious circumstances include the initiation of proceedings for the preparation of the instrument; participation in such preparation; presence at the execution of the Will; efforts to exclude the natural objects of testator’s bounty from his society; concealing the making of the Will; and taking possession of the Will. In New Jersey, once a presumption of undue influence has been established the burden of proof shifts to the proponent of the Will, who must, under normal circumstances, overcome that presumption by a preponderance of the evidence. When the presumption exists, the proponent has the burden of coming forward with credible evidence satisfactorily explaining his conduct and stating what he knows as to the making of the Will.

Here, a presumption exists that the will executed on May 23, 2000 was the product of Undue Influence. This presumption was not been rebutted by a preponderance of the evidence. Therefore, the Court found that the Will was invalid.

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