MARCH 13, 2000 VOLUME 7, NUMBER 37
“Undue influence” is usually thought of in connection with provisions in a will. It can also be cited in attempts to set aside transfers made during life, as a recent North Carolina case illustrates.
In early 1996 Irene J. Stephenson signed a deed conveying her home and sixteen acres of land to the Wake Forest Baptist Church. The deed reserved a “life estate” to Ms. Stephenson—that is, it allowed her to live on the property, rent it and use it as she wished for the rest of her life.
Shortly after she signed the deed, Ms. Stephenson moved to set it aside. She claimed that church members had brought the deed (and an attorney) to the nursing home for her to sign, and that no attempt had been made to involve her family, her attorney or the agent she had named in her durable power of attorney.
Ms. Stephenson had been eighty-seven years old when she signed, and had been living at a local nursing home for two years. Her mental health had allegedly begun to fail. In fact, Ms. Stephenson died before the case could be resolved, and it was continued by her probate estate.
After the complaint was filed, the Wake Forest Baptist Church moved for summary judgment, which was granted. Ms. Stephenson’s estate appealed.
The original complaint had not included a claim that church members unduly influenced Ms. Stephenson to sign the deed. The Court of Appeals directed that the case be returned for a decision on the possibility anyway, and it provided some guidance on what to look for when analyzing a transaction for undue influence. Among the factors the court found might tend to indicate undue influence in this or another transaction:
|•||“Old age” and mental weakness of the signer|
|•||Change from prior disposition of the property|
|•||Benefits flowing to a non-relative|
|•||Involvement of the beneficiary in procuring the transfer|
|•||Disinheritance of the “natural objects” of the signer’s bounty|
|•||Constant association and supervision by the beneficiary, as when the signer lives with the beneficiary|
|•||Lack of opportunity for others to visit the signer
In Ms. Stephenson’s case, said the court, there was at least some evidence on several of those elements.
Ms. Stephenson’s estate should be permitted to put on its case for undue influence, and so the case was remanded for further proceedings. Meanwhile, allegations of interference with a contract and unfair trade practices were dismissed. Stephenson v. Warren, March 7, 2000.
Arizona law is very similar to the North Carolina court’s holding. In a 1966 case the Arizona Supreme Court outlined eight factors tending to show undue influence, with much the same effect. One subtle (but important) difference: Arizona cases have expressly held since at least the mid-1940s that “advanced age” (by itself, at least) can not give rise to any presumption of undue influence.