Posts Tagged ‘undue influence’

Pondering Your Power of Attorney

SEPTEMBER 16, 2013 VOLUME 20 NUMBER 35

Do you have a power of attorney? If so, do you know how it works? Is a “springing” power of attorney the best way for you to keep authority over your health care and financial decisions until a transition is needed? Many people have powers of attorney but do not understand how they work.

The power of attorney gives authority to an individual (the “agent” or “attorney in fact”) to make financial or medical decisions for another person (the “principal”) in the event of incapacity. Although sometimes health care powers of attorney are incorporated into general durable power of attorney, most people prefer to separate the two kinds of documents. A health care power of attorney gives an agent duties to make medical-related decisions and a durable power of attorney authorizes an agent to handle financial matters. While some states may give your health care agent the power to authority an autopsy, organ donation or burial arrangements, no American jurisdiction recognizes a power of attorney after the death of the principal. If you want to refresher on the basics, you might want to look at this white paper written by Slade V. Dukes.

One of the most important things to understand about your durable or health care power of attorney is whether it is a springing power or surviving power. A springing power of attorney is not immediately effective when you, the principal, sign it. Instead, the power can only become effective and “spring” into action when a specified event occurs like your incapacity or disability. A surviving power of attorney is effective the moment you sign it and survives even if you become disabled or incapacitated.

So, is it dangerous to have a surviving power of attorney and give your agent immediate authority to act on your behalf? Does it make more sense to create a springing power of attorney that only gives your agent authority to act when you really need the help? Now that you’re digging through your desk door in a panic, trying to decipher if your powers of attorney are springing or surviving — relax. The answer is that it depends.

Although Arizona recognizes springing powers of attorney, we see a general trend away from the use of springing powers. Legal standards of capacity are different then medical standards of capacity, so not all doctor’s letters are created equal. Even with a notarized doctor’s letter, it is not uncommon for a financial institution to object that a springing power of attorney has not, well, sprung. There is at least one state, Florida, that does not recognize springing powers of attorney in any form. A general consensus among practitioners seems to be that though springing powers can be used in some circumstances, they should not be the default.

Our office drafts both springing and surviving powers of attorney for our clients. And before we draft a power of attorney, it helps to learn about our clients’ health and family relationships. Making a thoughtful decision about selection of your agent is a critical part of preparing a power of attorney that will serve you well. In some cases, where there is a history of family conflict or a client has complex business or financial arrangements, there may be good reasons to create a springing power of attorney. In other cases, springing powers of attorney can be problematic and create hurdles that may make it difficult for an agent to act when the call for help comes.

So which is the right answer for you? Here’s a quick question for you to consider: do you completely and implicitly trust the person you are naming as agent? If your answer is “yes,” then it should not cause any problem to give them immediate authority to act. If the answer is “no,” then we need to talk about your choice of agent. Think about it: if you do not trust them enough to give them immediate authority, then perhaps they are not the right agent for you.

It’s easy to be glib, however, and a lot harder to actually live your life. Sometimes there are not good choices. Sometimes people may simply not be comfortable with an immediately effective power of attorney. When we prepare your estate plan, you should talk through your concerns and preferences — the point of signing a power of attorney is to give you peace of mind, not to make you more anxious.

Can a Person with Dementia Sign Legal Documents? (Part 2)

MARCH 4, 2013 VOLUME 20 NUMBER 9
Last week we posed the question, and then mostly wrote about competence (or capacity) to sign a will. We promised to explain more about the level of competence required to sign other documents. So let us now tackle that concept.

A person with a diagnosis of dementia may well be able to sign legal documents, at least in Arizona. We suspect that the answer should be pretty much the same in other states, but if you are curious about your own state you should check with a local attorney about how competence is determined.

Generally speaking, competence or capacity is usually analyzed situationally. That is, the question will be answered differently depending on the nature of the document and the circumstances of the signing. The general rule: the signer has to have sufficient understanding to know what the document is, and the effect of the signing.

What kinds of documents might be involved? There are a variety of contexts in which capacity can be difficult to assess, including (but not limited to):

  • Ability to sign a contract — say to buy a car, or build a home.
  • Understanding of a power of attorney, which might give the authority to another person to sign future documents.
  • Competence to sign a trust, which might have elements of agency (like a power of attorney) and testamentary effect (like a will).
  • Capacity to get married (which is, after all, a specialized kind of contract).
  • Ability to make medical decisions — including refusing medication, or either seeking or declining mental health treatment.

Each of those situations, and the dozens of others that might arise, will be judged differently, because the nature and effect of the act will be different. But we can generalize about several of the important rules that cut across types of documents:

  • Minority is presumptive incapacity. That is, a person under age 18 does not have the legal ability to enter into a contract, get married, sign a trust (or will), or make medical decisions for themselves. There are, however, exceptions — a contract for “necessaries” (food, shelter, etc.) may be enforceable if signed by a minor. An “emancipated” minor may be able to do some things that an unemancipated minor can not.
  • It may not be necessary to have capacity to do the underlying thing before giving the authority to someone else. What? Let us explain: a person who might not have the capacity to enter into a complicated contract might still have sufficient capacity to sign a power of attorney giving someone else the power to sign the contract.
  • Arizona’s legislature has decided that the capacity level required to sign a trust should be the same as testamentary capacity, as we described last week. That may mean that someone who does not have sufficient capacity to sign a power of attorney could nonetheless sign a trust, which gives even broader authority to the trustee. Odd result, but mostly theoretical, as it’s hard to find someone in just that circumstance.
  • Generally speaking, most observers think that the capacity to sign a will is a lower level of competence than contractual or other forms of capacity. But it might not be that hard to describe someone who adequately understands the nature of a power of attorney but does not have an understanding at the level of testamentary capacity.
  • There are few legal ways to determine capacity in advance. Challenges to capacity are almost always initiated after the signing is completed — and often after the signer has died, or become completely and undeniably incompetent. That means that evidence of capacity (or lack of capacity) is often being reconstructed well after the fact.

It’s also important to remember that we are writing here about competence/capacity, and not necessarily about the validity of documents signed by someone with dementia. In response to our article last week, one reader wrote to us:

“You covered dementia issues very clearly. Thank you! But what about the issue of undue influence in the presence of known dementia where, in principle, the demented person otherwise possesses testamentary capacity? How does the mix of those two aspects play out?”

It’s a very good point. There is a difference between capacity (or competence) on the one hand, and undue influence on the other. Dementia might make a given signer incapable of signing a document, or their competence may be sufficient to sign. But that same person might be made more susceptible to undue influence because of their dementia.

What do we mean? Let’s give an example — drawn from our considerable experience with the distinction. An elderly widower, living alone, has a diagnosis of dementia. He is nonetheless charming, witty and perfectly able to discuss his wishes. He can recall the names of his three children, and of his seven grandchildren. He can report their ages, the cities they live in and their careers (or status as students) — and he is mostly correct, though sometimes his information is two or three years out of date.

This gentleman’s daughter lives in the same city, and is the one who oversees his living arrangements and care. She does his shopping, hires people to check on him daily, takes him to doctors’ appointments, writes out his checks (he still signs them) and otherwise helps out. She also talks to him endlessly about how his other two children don’t deserve to end up with his house and bank accounts, how she really ought to be the one who benefits from his estate, and how his late wife (her mother) always wanted her to inherit everything. Eventually he agrees to sign a new will and trust, mostly to stop her constant harangues.

Was he competent to sign the new estate planning documents? On the facts as we’ve given them here, probably yes. Was he unduly influenced? Very likely. Was that influence facilitated (and the proof made easier) because of his dementia? Absolutely.

When did the daughter’s behavior cross the line? The legal system isn’t actually very helpful, since the answer is defined in a circular fashion. Her influence was “undue” when it resulted in her wishes being substituted for his. It was not necessarily objectionable (at least not legally) when she told him what she wished he would do, what her mother had wanted, or what was fair. But at some point she may well have turned ordinary familial influence into “undue” influence.

We hope that helps explain this complicated and nuanced area of the law. But we want to leave you with a completely unrelated, but important, note: Kieran Hartley York joined the Fleming & Curti family (literally) on Sunday, March 3. We are delighted to have met the little guy, and look forward to great things from him in the future.

Claimant Must Prove Undue Influence, Lack of Capacity

AUGUST 27, 2012 VOLUME 19 NUMBER 33
It has been some time since we wrote about the concepts of undue influence and lack of testamentary capacity — and the differences between these two legal concepts. A recent Minnesota appellate case strikes us as a good opportunity to revisit challenges to wills and trusts based on allegations of mental shortcomings.

Linda Samson (not her real name) was a widow, living in her own home in Minnesota. She had two children, a son and a daughter. She and her late husband had created a living trust several years before her husband’s death; it provided that after the second spouse died, the remaining estate would be divided into three shares. One share would go to the couple’s daughter, another to their son, and the third to their son’s wife.

In 2003 Linda was diagnosed with “early-state Alzheimer’s disease.” In 2006 she signed an amendment to her trust deleting both her daughter and daughter-in-law (and leaving everything to her son). In 2008 she signed two deeds to her home — one transferred her home out of the trust and into her name alone, and the second one transferred her home from her name into her son’s name (but reserving a life estate for herself).

Between her initial Alzheimer’s diagnosis and 2008 Linda’s medical records periodically referred to her memory loss but indicated that she was stable. She continued to live at home, though with some assistance. She had a sharp mental decline in the summer of 2008, and by fall of that year a home health agency was recommending 24-hour care. She moved into a nursing home in the spring of 2009, was enrolled in a hospice program and died in June of that year.

Linda’s daughter objected to the 2006 amendment to Linda’s trust and to the 2008 transfer of her home. She argued that her mother lacked the capacity to sign either of those sets of documents, and/or that her brother must have unduly influenced their mother to his own benefit (and her detriment).

The probate judge heard testimony from several people who knew and/or treated Linda. Two expert witnesses hired by her daughter, both doctors, had reviewed Linda’s medical records but had never met her. They testified that her capacity was obviously diminished, and that it would have been possible to unduly influence her.

On the other side, the lawyer who prepared the trust amendment and the deeds to her house testified that, though he had not met his client before, she seemed to be able to explain her reasoning for the changes and she knew who her children were and what she was doing. He testified that she had told him that it saddened her that her daughter was not very involved in her life, but that she was pleased at the extra care and attention she received from her son and his son, her grandson.

Both the initial and the follow-up sets of appointments with the lawyer had been arranged by Linda’s son, but in both cases (he testified) it was at her request. Although the lawyer had met with both Linda and her son initially, further discussions were with Linda alone; the transfer of the house had actually been initiated by the lawyer rather than either Linda or her son. The lawyer pointed out that it didn’t really change the disposition of her estate at all, since Linda’s son was already the sole beneficiary of her trust estate.

There was one odd moment, according to the lawyer’s testimony. During one of the interviews with Linda he sought to establish that she knew her family members and the relationships (a key part of the standard for determining testamentary capacity). When he asked Linda about her daughter, she said that she was sorry that they were not closer, that the daughter was on her third husband (in fact, her husband had just died), and that her daughter had suspected that she, Linda, had had an affair with the husband. When the lawyer expressed surprise and asked follow-up questions, Linda dismissed the idea and said she had gotten confused; that had been the plot of a biblical story she had read.

After trial, the probate judge ruled that Linda’s daughter had not proven that her mother lacked testamentary capacity OR that her brother exercised undue influence. The judge noted that the supporter of questioned documents has the burden of proof that the documents were executed properly. After that, though, the contestant of a will or trust has the burden of proving allegations of undue influence or lack of testamentary capacity. Linda’s daughter introduced testimony that there could have been undue influence, and that Linda’s capacity might be suspect — but her burden had been to prove that there was undue influence, or that Linda actually did not understand what she was signing.

The Minnesota Court of Appeals agreed, upholding the probate judge’s ruling. The appellate judges had the same understanding of the burden of proof, and saw no reason to set aside the probate judge’s findings. Linda’s last trust changes, and the transfer of her home to her son, were both upheld. In the Matter of the Smith Living Trust, August 20, 2012.

This Minnesota case is not the most eloquent on the subject, and of course it would have little or no precedential value in Arizona. The opinion is also “unpublished,” which means that the Minnesota Court of Appeals decided that it should not be cited as precedent even in Minnesota itself. Still, there are several reasons we like the decision and call attention to it here:

  • It is a nice exposition of the “burden of proof” issue, pointing out that many will and trust contests lose not because the proponent of the document prevails but because the contestant fails. Generally speaking, the person who challenges a will, trust, deed or other estate planning document has to overcome the presumption that the signer was competent and knew what he or she was doing.
  • It describes the sorts of things a good lawyer should do to protect the validity of documents he or she prepares. The lawyer met with Linda alone (we would have liked it even better if he had never met with Linda and her son together, but at least he dealt primarily with Linda directly), the deed change was prompted not by Linda’s son but by the lawyer himself, the lawyer could testify that he routinely took steps to assure that his clients are competent and aware of what they are doing.
  • On the other hand, the contestant had to rely, as is often the case, on inference and reconstruction. The contestant’s two expert witnesses had never met Linda, and their opinions were consequently guarded (they said that she was susceptible to undue influence, but they could not testify to the extent of any influence they might suspect).
  • Perhaps most importantly, the opinion makes clear that even someone with a long-standing diagnosis of dementia might still be able to sign estate planning documents. Testamentary capacity (the ability to sign a will) is not immediately compromised by virtue of a dementia diagnosis; Linda had carried her diagnosis for several years but still had the capacity to understand the nature of her trust change, to identify her family members and to describe what assets she wanted to pass to her son. The fact that she had one episode of fairly serious confusion did not prevent her from signing her new trust.

Patient With Dementia May Have Authored Valid Will

NOVEMBER 7, 2011 VOLUME 18 NUMBER 38
A woman has been diagnosed as suffering from dementia of the Alzheimer’s type, and she resides in an assisted living facility. She has short-term memory loss, is frequently forgetful and has difficulty with tasks like playing cards and operating her television set. Can she sign a new will?

That is the legal question posed by Clara Marsh’s will, which she wrote out in longhand and signed in 2006. Ms. Marsh died two years later, and her son and daughter ended up in a legal battle over whether the will was valid.

To be more precise, Ms. Marsh’s will actually presents two related but independent legal questions. First: was she competent to sign the will on the day she did? Second: if she was competent, did her son and daughter-in-law exert undue influence on her in connection with the new will?

A brief background is in order. Ms. Marsh had a 1996 will that left everything equally to her two children. When she moved into a condominium in 2003, she wrote to the children telling them that she intended to leave her new home to her son Richard. He had helped her with the purchase, and she explained to the children that she had placed her new home in joint tenancy (with right of survivorship) with Richard. She did not, however, sign a new will at that time.

In 2006 Ms. Marsh moved to an assisted living facility, and the condominium was sold. The proceeds from that sale then became a bone of contention between her son Richard and her daughter Elaine Grayson. Richard thought the proceeds should be put into an account in his and his mother’s names as joint tenants; Elaine insisted that the proceeds be placed in an account in Ms. Marsh’s name alone.

As the two siblings (and their respective spouses) debated how to handle the sale proceeds, Elaine’s husband John filed a guardianship petition. He alleged that Ms. Marsh had Alzheimer’s disease and dementia. Richard opposed the guardianship petition, and the relationship between the two couples deteriorated.

A month after the guardianship was filed Ms. Marsh prepared a one-paragraph will in her own handwriting. It said:

Because of all the legal problems Elaine and John are causing, I am afraid my final wishes will be ignored. To prevent this from happening, this is my new will: I leave everything to my son Richard and his wife Sam. I love you all very much.

This new will was witnessed by Ms. Marsh’s priest and the church secretary. She apparently did show it to Richard shortly after she signed it (he says he told her to “hide this someplace” and think it over), but she did not share it with Elaine or her husband John.

After Ms. Marsh’s death in 2008, Richard filed the handwritten will with the Ohio probate court. Elaine objected, arguing that (a) Ms. Marsh had been incompetent at the time of the will’s signing, and (b) Richard and his wife had exerted undue influence over Ms. Marsh to get her to disinherit Elaine. The probate court granted summary judgment to Richard, thereby dismissing the objections raised by Elaine.

The Ohio Court of Appeals agreed with the probate court on the first issue, but sent the dispute back to probate court for further proceedings regarding the undue influence count. Despite a diagnosis of dementia, and despite forgetfulness and confusion, the appellate court agreed that Ms. Marsh appeared to understand the things needed to make a valid will. She knew who her children (and in-laws) were, and even though she may not have known the precise nature of her assets she did understand what was involved with her estate. She knew she was making a will, and the effect of doing so. Summary judgment was appropriate on the question of her legal capacity to sign a will. Despite her limitations, despite her diagnosis and despite her living situation, she was able to make her new will.

But it still might be possible to show that she was subjected to undue influence, and the appellate court took pains to distinguish the two concepts. Undue influence, the court noted, is not the same as general influence — even “strong and controlling” influence. To be “undue,” influence must be so pervasive and effective as to result in the document reflecting the wishes of the influencer and not those of the signer. That is a high barrier for a will challenger to cross, but Elaine should be given a chance to introduce evidence to support her claim, ruled the Court of Appeals. In Re Estate of Marsh, October 28, 2011.

Other than the obvious (“don’t exercise undue influence over seniors”), what lessons can we take from Ms. Marsh’s story to guide our actions when working with seniors like her? We might submit a couple for your consideration:

  • Don’t forget that, while you and other family members dispute how best to handle the senior’s finances (or life), he or she may have some strong opinions and may actually feel affected by your decisions, arguments and tactics.
  • “Winning” may not be as important in family disputes as figuring out a way to get along. The cost of this particular dispute: thousands of dollars in legal fees, irreparable damage to family relationships and (and not least) psychic injury to the individual everyone was trying to protect.
  • Family disputes are sometimes about the best interests of a vulnerable family member, sometimes about dollars, sometimes about pride, and sometimes about control. In our professional experience, those last are often the most difficult ones to resolve.

Agents Under Power of Attorney Justify $20 Million in Expenditures

OCTOBER 11, 2010 VOLUME 17 NUMBER 32
Imagine this: you have a long-standing history of philanthropy and community involvement. You have substantial assets and you feel that you should use some of them to enrich the community where you live, where you made your fortune, and where your children were raised. Your spouse agrees with you about these goals, and the two of you want to make sure someone has the power to continue to pursue those goals even if you become incapacitated. You should both sign a power of attorney, and name as agent someone who you know agrees with your world view, right?

That is what Irwin and Xenia Miller, of Columbus, Indiana, did. In 1995 they signed mirror-image powers of attorney naming one another as agent. They both named one of their five children and a long-time financial adviser as co-agents to act if either could not act for the other. Then they went about living their lives.

To make their intentions clear, Irwin Miller wrote a letter to the couple’s children in 1996. “Of all the things we can ‘leave to you,’” he wrote, “money seems to us to be the least important.” He went on to tell the children that he and Xenia “have not lived and worked primarily to maximize your inheritance.” “We have worked and lived to make a constructive contribution to our community, church, and nation. And — we have lived our own lives the way we wanted to live them, and have had a good time so doing.”

For nearly a decade after signing their powers of attorney and writing to the children, Irwin Miller spent significant sums on maintaining several homes in Indiana and Ontario, Canada. In fact, the upkeep costs on three properties were in the millions of dollars during this time period. Irwin made those expenditures despite the fact that he and Xenia didn’t actually own one of the properties — it had been purchased by the son they named as agent in their power of attorney.

When Irwin Miller died in 2004, Xenia Miller was already incapacitated. The two agents in her 1995 power of attorney began to handle her finances, as she had planned. They faced a quandary: should they continue to pay significant sums to maintain properties even though the payments would not benefit Xenia Miller’s estate? Even though she might not be able to enjoy visiting two of the properties any more? Even though the expenditures might actually benefit one of the agents?

Xenia Miller died in 2008. During the four years between Irwin’s and Xenia’s death, the agents under the power of attorney spent over $20 million on keeping the properties going, making improvements and (in the case of the family home) arranging to interest the Indianapolis Museum of Art in moving into the property. Concerned that the expenditures might be challenged, they ultimately filed a petition with the local probate court seeking approval of their expenditures.

One of Irwin and Xenia’s children objected, and a four-day hearing was held on the accounting filed by the agents. Among his allegations: because the agents were acting under a power of attorney, their behavior created a presumption of undue influence requiring that the payments be set aside. The probate judge listened to testimony and arguments from both sides and then approved all the transactions. The judge also ordered the objecting son to pay the legal fees incurred by the agents.

The Indiana Court of Appeals reviewed the holding and agreed that “Xenia and Irwin Miller were extraordinary individuals who did everything in their power to enrich their community, support their family, and better society as a whole.” The appellate judges upheld the probate court approval of the expenditures; they did, however, rule that the contest was not frivolous and so reversed the award of attorneys fees. In Re General Power of Attorney of Miller, September 30, 2010.

The Millers left an extraordinary legacy — on many levels. They provided for their five children. They enriched their community. They created a lasting memory of a wealthy and public-spirited family. Though they probably did not intend to leave a legal precedent that could guide others, they did. By writing what amounted to an “ethical will,” setting out not just financial inheritances but also principles he lived by and hoped would guide his children, Irwin Miller gave us another legacy: he taught us that a power of attorney can be used to carry out the intentions of the signer, even if his purposes are not solely financial.

The Court of Appeals opinion is worth reading, if only for the language of Irwin Miller’s letter to his children. For more on the extraordinary Millers, consider the Christie’s auction notice describing sale of their collection and their impact on the architecture and art communities. Xenia Miller was an extraordinary individual in her own right, with business, art, religious and civil rights credentials that earned her recognition and acclaim.

Court Distinguishes Between Undue Influence, Incapacity

DECEMBER 28 , 2009  VOLUME 16, NUMBER 66

Contrary to public perceptions, will contests are actually rare. In fact, few wills are written in such a way that anyone would benefit from a contest — most wills leave property to the same people who would inherit if there was no will. When there is a will contest, however, the two most common grounds are allegations of (1) lack of testamentary capacity, or (2) undue influence exerted by someone. A recent Texas case highlights the differences between those two allegations.

Evelyn Marie Reno died at age 81. She had been married twice, and left three children from her first marriage and one daughter from the second. The youngest child, Jan LeGrand, did not get along well with her half-siblings. Relationships between Ms. Reno and the three children from her first marriage were also strained — at least partially because two of them had initiated a guardianship proceeding (which was later dismissed) against their mother.

Ms. Reno spent the last year of her life in a nursing home. Ms. LeGrand visited her regularly, paid all her bills, and kept her location a secret from her half-siblings. At some point in the year before she died, Ms. Reno asked her daughter to help her prepare a new will disinheriting her other three children and leaving her entire estate to Ms. LeGrand.

The will was prepared (by Ms. LeGrand), and signed in Ms. Reno’s nursing home room. The witnesses were a hospice worker and chaplain, and the notary public was a nursing home employee. Ms. LeGrand was asked to leave the room while the three non-family members discussed the will and watched her sign it.

After Ms. Reno’s death the will was filed with the probate court by Ms. LeGrand. The three half-siblings proposed an earlier will, which left most of the estate to the four children equally.

The Probate Court ruled that Ms. Reno lacked testamentary capacity at the time the last will was signed, and that she was subjected to undue influence by her daughter. The earlier will (and a codicil) were instead admitted to probate.

The Texas Court of Appeals analyzed the findings of the Probate Court, and modified the basis for its findings — while not changing the result. The evidence, according to the appellate court, showed that Ms. Reno DID have testamentary capacity. Though she was often confused, the two witnesses and the notary agreed that the will was signed on a good day. Evidence of confusion and occasional disorientation on days before and after the will signing was not enough to overcome the testimony that she knew what she was signing, who her children were and what she intended to do at the time she signed the will.

The appeals judges agreed with the Probate Court, however, on the subject of undue influence. A key part of the evidence considered by the Court of Appeals: the fact that the will was actually prepared by Ms. LeGrand. As the Court wrote: “the fact that LeGrand personally prepared teh will without the intervention of an atotrney or other third party is significant.”

Also important to the court’s analysis: Ms. LeGrand had sole access to Ms. Reno for more than a year (during which time their mother’s whereabouts were not shared with the other three children). During that time, noted the Court of Appeals, Ms. Reno was completely dependent on Ms. LeGrand for bill-paying, care management and personal contact.

A more subtle distinction is drawn by the appellate judges with regard to Ms. Reno’s declining mental status. Though her condition at the moment of signing the will did not support the allegations of lack of testamentary capacity, her growing confusion and periodic mental weakness made her susceptible to undue influence.

Finally, the Court of Appeals notes that the will prepared by Ms. LeGrand for her mother was a complete shift from her prior wills. In each of those she made specific bequests to her four children and thirteen grandchildren, plus hospitals, her church and her pastor. The last will, however, left everything to one daughter — and this significant change in her dispositive plan was yet another indication of undue influence.

Though family members often confuse the concepts of testamentary capacity and undue influence, the legal analysis of the two different approaches to will contests is well-developed. It is also important to note that not every attempt to talk someone into making a new will is automatically subject to challenge. As the Reno court opined, in somewhat dry legalistic language: “One may request, importune, or entreat another to create a favorable dispositive instrument, but unless th eimportunities or entreaties are shown to be so excessive as to subver the will of the maker, they will not taint the validity of the instrument.”

The difference between “lack of testamentary capacity” and “undue influence” is legalistic, to be sure, but it is more than just academic. Interestingly, the Texas Court of Appeals noted that there is a difference in the burden of proof borne by the parties in the two different kinds of cases. In a case alleging lack of testamentary capacity the proponent of the will has the burden of proving that the testator understood what she was doing. In an allegation of undue influence, the challenger carries the burden of proof.

That means that each side in Ms. Reno’s case met their burden of proof. That is, Ms. LeGrand showed that her mother understood what she was doing, but the other three children demonstrated that Ms. LeGrand unduly influenced their mother. Estate of Reno, December 18, 2009.

Protecting Clients From Their Own Mistakes Can Be A Challenge

DECEMBER 14 , 2009  VOLUME 16, NUMBER 64

Preparation of an estate plan is more than the individual documents. A good attorney considers the client’s circumstances and wishes, and analyzes the best course of action. The process requires the attorney and the client to communicate, and to work together.

Too often, however, problems arise after the attorney’s work is done. Clients are often pulled in different directions by family members, bankers, accountants, and other professionals. Television, radio, newspaper and magazine presentations aimed at mass audiences may confuse or mislead the client. Even if the client resists all of those voices, documents may get lost or inadvertently destroyed. What is a conscientious estate planner to do?

Many lawyers routinely hold on to original documents prepared for their clients. The best argument for doing so: it helps prevent accidental destruction or loss of the documents, and makes it harder for clients to make inadvertent changes.

Other lawyers do not like the practice. It takes considerable resources to manage a large collection of original documents. Holding on to originals also conveys the (false) impression that the children or other successors must return to the same lawyer later for administration of the estate.

A small minority of lawyers regularly prepare multiple originals of wills, trusts and powers of attorney. If one original document is in the lawyer’s office, at least it will not be misplaced by the client. This approach also helps reduce the concern that family must return to the same lawyer, since originals in the client’s possession can be used without the lawyer even knowing about the disability or death of the client.

Neither of these techniques does much to protect against the client becoming subject to undue — or unwise — influence. The scenario is common enough to be clichéd: the carefully considered estate plan prepared while the client is clearly competent is changed at the behest of a grasping relative or friend without the original lawyer ever being consulted or even advised.

One Illinois lawyer came up with an unusual way to protect against inadvertent or misguided changes to his clients’ estate plan. Attorney Lawrence Patterson included a provision in at least one married couple’s documents. It prohibited revocation or amendment of the estate plan without the attorney’s written consent.

Was Mr. Patterson’s approach effective? That depends entirely on how one defines “effective.” He has now been sued by his former clients AND is the subject of a pending ethics complaint through the Illinois Bar. Did he “overreach,” or was his concern for clients “admirable?”

We offer those two terms advisedly. They appear in two of the available documents responding to Mr. Patterson’s approach. Here is what has happened in the public record so far:

First, Mr. Patterson’s clients visited a new lawyer to modify their estate plan. The new lawyer wrote to Mr. Patterson, asking him to acknowledge that the clients had the right and power to do that. Mr. Patterson wrote back, telling the new lawyer that he would first need to meet with the clients to “determine whether the changes are consistent with the interests and protections embodied in the original plan.”

Rather than meet with Mr. Patterson, his clients filed a lawsuit seeking a declaration that Mr. Patterson could not control whether they amended their estate plan. The trial judge agreed, dismissing Mr. Patterson’s objections summarily and assessing legal fees and costs of $5,393.75 against him. Mr. Patterson appealed both determinations to the Illinois Court of Appeals.

Meanwhile someone (it may have been the clients, the opposing lawyer or even the judge in the trial case) notified the Illinois Attorney Registration and Disciplinary Commission of Mr. Patterson’s refusal to consent to the changes without first meeting with his (now) former clients. The Commission (which regulates lawyers practicing in Illinois) filed a two-count complaint against Mr. Patterson for what it saw as “overreaching.”

Interestingly, the first count in the ethics complaint dealt with an entirely unrelated matter, in which Mr. Patterson brought a guardianship petition against a client when she disagreed with his advice in a contested probate matter–a practice we have previously written about in another unrelated case out of Washington State. The ethics complaint against Mr. Patterson is still pending.

Then the Illinois Court of Appeals ruled on the lawsuit against Mr. Patterson. Its analysis indicated that his clients had given Mr. Patterson a fiduciary role over and above his standing as their attorney. They had made an irrevocable decision, according to the appellate court, to give him the power to oversee their estate planning changes in the future. Even though they subsequently fired him as their attorney, he remained as the arbiter of their future estate planning changes.

Far from criticizing him for his role, the Court of Appeals found his conduct to be “admirable, and consistent with the highest ideals of the bar.” The appellate court noted that the documents prepared by Mr. Patterson gave his clients the power to seek court approval of any change if they did not want to deal with him, and that his power was tempered by a duty to act as a fiduciary for his clients. “In light of the obvious expense to Patterson,” noted the appellate court with understatement, “we will leave it to other estate planners whether they wish to use this particular method of estate planning.” Dunn v. Patterson, November 18, 2009.

Note: we owe a considerable debt to the research work on Mr. Patterson carried out by Illinois estate planning attorney Joel Schoenmeyer. His excellent, entertaining and informative blog “Death and Taxes” has tackled the Patterson case, as well.

“Full Faith and Credit” Applies In Two-State Probate Actione

APRIL 5, 2004 VOLUME 11, NUMBER 40

A Florida court found Alvarado Kelly incompetent in 1960, and appointed a guardian to manage his property. Fifteen years later Mr. Kelly moved to a facility in Mississippi operated by Sarah Cuevas; he lived in that facility until his death twenty five years later. After his death Mr. Kelly’s brother William and Ms. Cuevas became embroiled in a legal dispute involving the courts of both states.

Mr. Kelly had signed a will while he lived in Mississippi, and he had named Ms. Cuevas as executrix (what we in Arizona would call “personal representative”). Shortly after his death Ms. Cuevas filed the will for probate with the Mississippi courts, gave notice to William Kelly as the next of kin, and secured a court order appointing her as executrix and finding the will to be Mr. Kelly’s valid will.

William Kelly then filed a proceeding in the Florida courts. He acknowledged that there had been a finding in Mississippi, but he argued that it was invalid both because he had not actually participated and because his brother had never been a resident of Mississippi.

William Kelly argued that since his brother had been adjudged incompetent and the Florida courts had never given specific permission for him to relocate to Mississippi, he remained a resident of Florida for the rest of his life. He also insisted that the will was invalid because Ms. Cuevas had exercised undue influence.

Ms. Cuevas filed a motion to dismiss the Florida probate, but the Florida court agreed with William Kelly that her appointment by the Mississippi court was invalid. A Florida bank was appointed as personal representative of Mr. Kelly’s estate and authorized to collect his assets.

The Florida Court of Appeals reversed the probate court’s decision, however. In doing so, it relied partly on the U.S. Constitution, which requires the courts of each state to give “full faith and credit” to the courts of sister states in most situations.

In this case, ruled the appellate court, Ms. Cuevas had given William Kelly notice of the pending Mississippi proceedings, and an opportunity to file pleadings and present his argument that any proceedings should be in Florida. When the Mississippi court admitted Mr. Kelly’s will to probate it made a determination that he was domiciled in Mississippi; if William Kelly disagreed with that conclusion he needed to make his argument in Mississippi, rather than just filing his own proceeding in Florida. Cuevas v. Kelly, March 26, 2004.

Mr. Kelly’s probate proceedings provide an interesting illustration of the “full faith and credit” clause of the Constitution, and of its application to probate proceedings. It also demonstrates that it is unwise to ignore the proceedings in another state, hoping to later file a competing action in a more friendly jurisdiction.

December, 2005, update: In a related case in the Mississippi courts, that state’s Court of Appeals ruled that probate proceedings were proper in Mississippi. William Kelly, the decedent’s brother, had argued in the Mississippi proceedings that there was no jurisdiction for a probate there, since (he insisted) all of Alvarado Kelly’s assets necessarily belonged in Florida where he had resided when he had last been competent to select a residence. The Mississippi chancery court (where probate proceedings are tried) had ruled that it would be “impossible” to imagine that Alvarado Kelly had lived in Mississippi for thirty years without accumulating clothing or other personal items. His death in Mississippi, coupled with the existence of any assets at all, gave Mississippi courts jurisdiction over his estate, and the Court of Appeals agrees that those probate proceedings were properly initiated. In the Matter of Estate of Kelly, December 6, 2005.

Proponent of Invalid Will Must Pay Attorney’s Fees to Family

JANUARY 19, 2004 VOLUME 11, NUMBER 29

Edmond and Elma Crittell befriended Violet Houssien and, according to Ms. Houssien’s family, set about getting the older woman to write a new will. Some of the evidence in the later will contest proceeding indicated that they may have even forged her signature on the will and, in a bizarre twist, burglarized the office of the notary public in an attempt to hide their fraud. Even if Ms. Houssien actually did sign the will, the Alaska courts later ruled that she had lacked capacity to do so, and that the Crittells exercised undue influence over her.

After Ms. Houssien’s death the Crittells sought to have the will they had prepared admitted to probate. Not surprisingly, it would have left the bulk of her $1.59 million estate to Elma Crittell. Also unsurprising was the objection lodged by family members.

After a two-week trial to the court, the will was found to be a forgery and the Crittells to have exercised undue influence over Ms. Houssien. The court also ordered the Crittells to pay the attorney’s fees and costs for the family members.

On its first trip to the Alaska Supreme Court, the case resulted in a mixed holding. The trial court’s findings about the will’s invalidity were upheld, but the award of attorney’s fees was set aside and remanded. The state high court ruled that there is no automatic right under state law for a successful will contestant to recover attorney’s fees, though it did not rule out the possibility that fees could be awarded for “vexatious or bad faith conduct.”

After the appeal was completed the trial judge reconsidered his earlier award of attorney’s fees. Finding that the Crittells had acted vexatiously and in bad faith, he ordered that they pay fees totaling $338,668.35. The Crittells again appealed to the Alaska Supreme Court.

In its second review of the case, the state high court reviewed the history of the litigation and the positions of the parties before and during the trial. The justices found that there was considerable evidence that the Crittells had acted in bad faith, and that it was proper for the trial judge to consider their fraudulent acts.

The Crittells argued that the effect of the court’s ruling was to impose punitive damages against them, and that there is no provision for such awards in probate cases. The high court disagreed with this argument, as well, though it expressed concern about the imposition of “financially ruinous” fee awards. However, if litigants proceed in bad faith, the entire cost of opposing counsel can be charged against them. Crittell v. Bingo, January 2, 2004.

Niece’s Will Contest Dismissed Because She Lacked Standing

SEPTEMBER 16, 2002 VOLUME 10, NUMBER 11

Adelaide Briskman was 82 when she died in Florida. She left property in that state and in Pennsylvania, and a will that she had signed just five months before her death. She also left a controversy between her family and the beneficiary she had named in her will.

In the last months of her life Ms. Briskman had transferred most of her property to Mark Resop, the branch manager of her bank. The assets were mostly placed in joint tenancy, including over $2,000,000 in an investment account and her Florida condominium. Mr. Resop promptly began to spend the money she transferred into joint tenancy, and he sold her condominium shortly after her death.

The only significant asset not transferred into Mr. Resop’s name before Ms. Briskman’s death was a commercial property in Pennsylvania which housed a branch of Mellon Bank. Mr. Resop petitioned the Pennsylvania courts for admission of the will naming him as beneficiary, and he was appointed as executor. A year later Ms. Briskman’s niece, Julie K. Palley, filed a challenge to that will, alleging that Ms. Briskman was incompetent when she signed the will, or in the alternative that Mr. Resop had exerted undue influence to get her to sign the instrument.

If Ms. Palley was successful in challenging her aunt’s will, an earlier will would have become the “last” will of Ms. Briskman. That earlier document named her lawyer at the time, one Richard Rosin, as executor, and it would have left her estate to various charitable causes.

The Pennsylvania probate court ruled in favor of Ms. Palley, finding the will to be invalid. Mr. Resop appealed to Pennsylvania’s intermediate appellate court. That court saw the case differently.

In the opinion of the appellate court, Ms. Briskman’s niece simply had no standing to contest her aunt’s will. If she had been successful, the court pointed out, she would not have been named as executor—that role would have fallen to Ms. Briskman’s lawyer. She also would not have received any portion of her aunt’s estate, since it would all go to charity. If she had nothing to gain by her challenge, said the appellate court, she had no business filing it, and the court ordered that it be dismissed and Mr. Resop reinstated as executor. Estate of Briskman, September 9, 2002.

Although the circumstances of Mr. Resop’s acquisition of Ms. Briskman’s property may appear suspicious, there is good news in the appellate court decision. Laypersons often express concern about someone challenging their wills, and anxiety about will contests is a common theme in estate planning. In fact, only someone who stands to gain from such a contest is even permitted to object to probate of a will; that is one of the reasons that will contests are relatively rare.

©2014 Fleming & Curti, PLC