Key Takeaways
- Undue influence occurs when an individual takes advantage of the vulnerability of another party for personal gain.
- Common elements required to prove undue influence include a perceived vulnerability of the victim, a relationship between the influencer and the victim, an inequitable outcome, and tangible actions employed to exert influence.
- The burden of proof in a trust contest around undue influence lies on the party accusing undue influence unless there is a legal presumption that undue influence occurred.
- If undue influence is proven to have occurred, then the trust instrument may be invalidated and may need to be restructured to guide the distribution of assets in line with the grantor’s wishes or state intestacy laws.
Introduction
Undue influence is the act where one party takes advantage of the vulnerability of another for their own selfish gain at the expense of the victim’s free will. Undue influence is a form of fraud and financial elder abuse that can cloud your loved one’s true wishes after they pass away and can result in a wrongful distribution of assets.
However, if you believe that an act of undue influence had an effect on your family’s trust, then it’s essential that you act quickly to address the issue and ensure that the proper administration of the estate is carried out. Understanding how to prove undue influence is instrumental in protecting the interests of a trust creator and their beneficiaries.
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California
California
Understanding Undue Influence
Undue influence is an act where one party takes advantage of another vulnerable party for their own personal gain while interfering with their own free will, resulting in an inequitable result in a trust or contract. California Welfare and Institutions Code section 15610 defines undue influence as the excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity.
Common circumstances that involve undue influence relating to trusts include:
- Coercing or threatening someone into changing their estate plan
- Guilting someone into changing their estate plan
- Taking advantage of someone’s mental state to influence them to change their trust instrument
- Using an individual’s vulnerability to change their trust document unknowingly
Undue influence is considered legally a type of fraud, and if it occurs at any point in the process, it can invalidate a trust agreement or any of the affected provisions within one if proven during a trust contest. However, undue influence may also occur in other relationships beyond trusts, such as contracts and wills.
Elements Required to Prove Undue Influence
An undue influence claim typically consists of a combination of circumstantial factors to be considered wrongful influence. The following are the most important elements required to prove such a claim.
Victim’s Vulnerability
A victim’s vulnerability is a key component of an undue influence claim, as it is this vulnerability that opens up the door to an individual being wrongfully pressured or coerced. Establishing that a victim was vulnerable in some way to outside influence is crucial for demonstrating that an action constitutes undue influence. The victim does not need to be mentally compromised to be influenced, it is enough that they require care or be physically vulnerable.
Examples of a victim being vulnerable might include:
- A grantor was not of sound mind due to a condition like dementia
- A grantor was under the care of a caretaker due to an illness
- A grantor was under emotional distress from personal circumstances
- A grantor is isolated from their family members
Of course, this is not an exhaustive list. Vulnerability can take many forms and may look different in any case, depending on the circumstances they are facing. Establishing evidence of the circumstances that created this vulnerability will be an important step in proving your claim.
Influencer’s Authority and Relationship to Victim
The authority of the influencer and their relationship to the victim play an essential role in establishing whether a case of undue influence occurred, as this relationship demonstrates to what extent an influencer had the ability to influence the alleged victim.
According to California Welfare and Institutions Code Section 15610.70, roles with apparent authority may include those such as:
- A fiduciary, such as a trustee or attorney
- A family member
- A caretaker
- A healthcare professional
- A spiritual advisor
Ultimately, a perpetrator has a position of authority when they have some sort of potential power over the victim or a confidential relationship with the victim that gives them leverage to exert influence.
Tactics and Actions Employed to Exert Influence
An undue influence claim is often substantiated by clear tactics used by the influencing party that demonstrate an intention to influence the grantor to act in their favor. These tactics may take several forms, from being seemingly innocuous to outright malicious.
Common tactics used to exert influence include:
- Emotional manipulation or blackmail used to create guilt or fear to be exploited to coerce a person into making a decision that benefits the manipulator
- In cases of a close emotional relationship, a withholding of affection, attention, or care may be used to influence a person’s actions or decisions
- Isolating an individual from their family or friends by cutting off communication and shrinking their circle of potential support
- Physical abuse or threats to control a victim and their decisions
- Exploitation of a vulnerability, like forcing a decision when a person is medically incapacitated
Equity of the Final Result of Influence
A key element of undue influence in a trust is that the outcome demonstrates some form of inequity. Wrongful influence typically results in some sort of financial loss or loss of value to the beneficiaries of the trust or the trust itself.
According to California Welfare and Institutions Code section 15610.70, “Evidence of the equity of the result may include economic consequences to the victim, divergence from the victim’s prior intent or course of conduct or dealing, the relationship of value conveyed to the value of any services or consideration received, or the appropriateness of the change in light of the length and nature of the relationship.
Inequity of a final result is often one of the easiest aspects to establish, as acts of wrongful influence are often geared toward directly changing the outcome of the estate plan. For example, if you were initially named a beneficiary of a trust, yet you were suddenly removed or your distribution was substantially lower, this would demonstrate an inequitable result that could establish grounds for a contest.
Role of Evidence in Undue Influence Cases
Evidence is a crucial part in establishing undue influence claims. By combining as many pieces of evidence as possible, you can establish a full picture of the likely influence.
Importance of Circumstantial Evidence
One thing the movies get wrong is that circumstantial evidence is a bad thing. That’s not always the case. Circumstantial evidence is still evidence, it’s just indirect evidence. For example, if someone walks into a restaurant wearing a rain coat with water drops on the raincoat, that’s circumstantial evidence that it is raining outside. You didn’t see the rain (direct evidence), but that is evidence (indirect) that it is raining. Circumstantial evidence is an essential element in undue influence cases because there is rarely an open-and-shut case with a clear smoking gun. Circumstantial, indirect evidence may include witness testimony to establish the context of a victim’s relationship with the grantor, a grantor’s medical records to demonstrate their mental capacity, or prior trusts or communications from the grantor to demonstrate their initial wishes.
Wrongful influence cases often have a significant burden of proof to overcome, which means that a substantial amount of circumstantial evidence is beneficial to demonstrate that another party was able to establish control over the grantor’s free will.
Legal Presumptions and Their Impact
The burden of proof is placed on the party claiming undue influence occurred. However, the burden of proof may shift in instances where there is enough evidence to presume that wrongful influence could have occurred. This presumption often exists when there is a confidential or caretaker relationship.
In these cases, it will be necessary for the proponent of the trust (the person with the confidential or caretaker relationship) to prove that the trust was executed correctly and without influence. The trust proponent can often prove this by demonstrating that the trust was executed under the law with a signature from the grantor and at least two witnesses to attest to the grantor’s mental capacity. Other evidence to refute presumed influence can include medical evidence demonstrating mental competence and previous estate planning documents to demonstrate the grantor’s intentions.
It’s also crucial for interested parties to understand the legal presumptions that could substantiate a trust contest claim. Personal grievances, a dislike of the final terms of the trust instrument, or unsubstantiated suspicions are not enough to pursue a trust contest based on undue influence. The only way to succeed with a legitimate trust contest is to have clear grounds to do so, and to succeed, there must be extraordinary evidence that excessive persuasion led to decisions that would not have otherwise occurred.
Gathering Detailed Evidence
Because proving undue influence requires a detailed evaluation of the facts and a substantial amount of circumstantial evidence, it’s essential that you prepare your case by gathering significant and applicable evidence. As you gather evidence surrounding the suspected influence, it’s important to compile as much as possible to demonstrate the likely influence, given that it is rarely demonstrated out in the open in front of witnesses.
Detailed evidence is typically discovered through the litigation and discovery processes. It’s best to engage a trust litigation attorney as soon as possible. An attorney will have extensive experience in conducting a thorough discovery process and will often know what avenues to pursue to find the most applicable evidence, which may include identifying red flags, conducting interviews, and acquiring past documents. The attorney then plays a crucial role in developing a winning strategy to prove undue influence and presenting it to the court.
Legal Framework and Requirements by State
The necessary criteria to establish a case of undue influence typically vary based on state laws and civil codes. It’s crucial to consult a lawyer in your state so you understand the necessary requirements for proving your case and can proceed accordingly.
Overview of State-Specific Laws
Different states may have varying laws covering undue influence in trusts. Both California and Texas have their own unique specific legal nuances relating to such cases.
California’s undue influence laws are covered specifically under the state’s Welfare and Institutions Code and the California Probate Code. This code states that proving wrongful influence includes establishing the existence of factors like vulnerability, incapacity, and grantor awareness, also known as testamentary capacity.
California offers the presumption of undue influence in circumstances that may have created a likelihood for influencing a trust creator. This may apply to parties such as caregivers, attorneys, and spouses. Circumstances that may establish this presumption include a confidential relationship and participation in the trust.
Meanwhile, Texas does not have a rule that automatically establishes a presumption of undue influence, meaning that the burden of proof will usually lie on the party claiming that influence occurred. Similar to in California, the accusing party in Texas must provide direct evidence to prove the circumstances that warrant influence. This evidence should cover the relationship dynamics with the alleged perpetrator, the mental capacity and vulnerability of the grantor, and the incidence of persuasion.
Shifting Burden of Proof
Initially, the burden of proof stands with the party that claims the wrongful influence occurred. However, in some cases, the burden of proof shifts to the party who was alleged to be guilty of wrongful influence if there is enough convincing evidence to substantiate a “presumption of undue influence”.
This presumption can be established when a person has a confidential relationship with the victim, had active participation in the drafting of a will or trust as a beneficiary, and made an active effort to acquire the will. These criteria are established to protect against the abuse of a fiduciary role or confidential relationships.
If a person meets these criteria, they must prove through greater evidence that wrongful influence did not occur. Still, this shift in the burden of proof is not always clear-cut, so it’s essential that you consult a skilled undue influence attorney to discuss your case and understand where the burden of proof lies.
Building a Strong Case
Building a strong case for undue influence requires gathering a wide swath of indirect evidence. The strongest cases are able to gather abundant and highly compelling evidence to support the claim that wrongful influence occurred and establish the full context around the grantor’s capacity and the type of influence they faced.
Some ways to build a strong case include:
- Presenting extensive circumstantial evidence to paint a complete picture of the suspected influence and the context surrounding it
- Engaging expert testimony from parties like the drafting estate planning attorney, medical professionals, or notaries to describe the context around the potential influence and establish the grantor’s testamentary capacity
- Highlighting the existence of a confidential relationship between the testator and the beneficiary
- Demonstrating proof of tangible changes in the trust instrument or other estate planning documents.
Ultimately, to build a strong case, you must understand and be able to present the full context of the events that occur surrounding the relationship between the victim and undue influencer. This process may include navigating complex family dynamics and gathering information about all red flags demonstrated in the relationship.
Implications of Undue Influence
Cases of undue influence can have significant implications for an individual’s estate plan as they often override an individual’s own free will. If unjust influence is proven, it can raise questions surrounding the true intentions of the grantor and potentially invalidate an estate plan entirely.
Impact on Wills, Trusts, and Property Transfers
The most significant implication of a proven act of undue influence is that it can have lasting impacts on the trust administration process. If the court rules that there is sufficient evidence to suggest that the trust instrument was created or altered under coercion or influence, the document may be invalidated entirely.
If the document is invalidated, then it is important that there are clear guidelines to guide the administration of the trust. If there was an earlier version of the trust instrument, then the guidelines for the trust administration process will likely revert to previous estate planning documents. If only a portion of a trust instrument was impacted, then only the affected portions will be invalidated and revoked.
If there was not an earlier version of a trust agreement to guide the administration process, then the assets may be left to be distributed at the trustee’s discretion according to state intestacy laws and the legal line of succession of heirs.
Undue Influence & Elder Financial Abuse
Cases of elder financial abuse are commonly closely related to cases of undue influence. Elder financial abuse involves taking advantage of the vulnerability of an elderly individual to steal their finances for your own personal gain.
The unauthorized alteration of an individual’s estate plan through outside influence is one of the most common methods through which individuals commit financial elder abuse. By influencing or coercing someone into changing the terms of a revocable trust, a perpetrator can take advantage of a victim to secure a larger distribution of trust assets for themselves.
In any case of suspected abuse or coercion, it’s crucial that you consult a skilled financial elder abuse attorney to begin gathering evidence and determine the appropriate next steps for rectifying these damages and protecting the true wishes of the deceased.
Find Support with Undue Influence Claims from RMO Lawyers
Undue influence can have serious consequences on the trust administration process, as it can overshadow the wishes of the trust’s creator and invalidate any established agreement if proven to be true. If you suspect improper influence was a factor in establishing or altering your loved one’s trust, it’s crucial that you contact a skilled trust litigation attorney to gather a complete picture of your options.
The team of trust litigation attorneys at RMO LLP is well-equipped to support you in undue influence claims. With decades of experience in the intricacies of trusts and the family dynamics that affect them, we’ll work to understand the details of your case and develop a winning strategy to pursue the best possible outcome.
Schedule a consultation with the attorneys at RMO Lawyers to learn more about how we can best support you in protecting your loved one’s legacy.
Glossary
Active procurement – When an individual takes an active role in procuring a trust instrument, such as requesting a copy of the document prior to the death of the grantor.
Grantor – A person who creates a trust to specify how they want their assets distributed upon their death and to which beneficiaries.
Trust – A legal agreement that grants a third party, or fiduciary, the authority to hold and manage assets for the beneficiaries of an estate.
Trustee – A trustee is a person who coordinates the administration of the trust, manages the trust’s assets and is responsible for distributing the assets to the trust’s beneficiaries.
Settlor – A settlor is a person who creates a trust to specify how they want their assets distributed upon their death and to which beneficiaries.
Beneficiary – A beneficiary is an individual or entity identified in a trust as being entitled to receive benefits from the estate.
Heir – An individual who is entitled to receive a share of assets in the event of the settlor’s death based on state intestacy laws.
Trust instrument – A written declaration or agreement designed to allocate a settlor’s property to beneficiaries, including the trust and regulating how the trust should be executed.
Undue influence – When an individual asserts influence on a vulnerable person to the degree that the compromised person’s will is overcome, often to make changes to their estate planning documents, retirement and insurance policy beneficiaries, bank accounts, and real property, for their own personal, unfair gain.