Undue Influence vs. Lack of Capacity: There's more than one way to overturn a California Will or Trust

Posted by Keith A. Davidson on September 13, 2011

Lack of capacity is probably the most used concept in trying to overturn a California Will or Trust.  And while nearly ever Trust or Will contest lawsuit contains an undue influence allegation, undue influence is usually minimized or even ignored altogether at trial.  In this vide, Keith A. Davidson discusses how both concepts can be used to overturn a California Will or Trust.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

Lack of Capacity in California Trust and Will Creation

Posted by Keith A. Davidson on August 30, 2011

Our lates video post describes the concept of Lack of Capacity in California Trust and Will creation.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

Capacity Issues: Different types of capacity required for California Trusts vs. Wills

Posted by Keith A. Davidson on August 26, 2011

California Wills and Trusts are not created equal.  In this video, we describe the basic differences between the mental capacity required for California Will creation and the mental capacity required for California Trust creation.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

Undue Influence: How undue Influence is used to overturn a California Trust or Will

Posted by Keith A. Davidson on August 25, 2011

See Video Below:

Stewart R. Albertson discusses how undue influence is used to overturn a California Will or Trust.  There are two ways to prove undue influence in California, either directly or by shifting the burden of proof onto the opposing party.  Stewart describes the basic concepts.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

Coping with Incapacity: How Trust Planning Is Life Planning

Posted by Keith A. Davidson on August 01, 2011

How does your trust help you while you’re alive?  Many people think of trusts as death planning instruments--the type of thing that only operates upon your death.

But trusts have a critically important role to play while you are alive in the event you lose capacity.  People are living longer and the likelihood of being physically able, but mentally unfit is growing.

Without a trust plan in place, a person and his money cannot be easily cared for. In fact, a court supervised conservatorship is required to manage the person and estate of people who lose mental capacity, but have no other safeguards in place for the management of their money and personal care. 

Unfortunately, conservatorships are costly, time consuming and expose everything (and I mean everything) to ongoing court supervision.  In other words, your life becomes an open book and the court decides who will make decisions for you and then tries to oversee those decisions as best it can....yikes!

Since a conservatorship takes place in court, it provides a ready forum for lawsuits.  It's not uncommon for a person's children to fight over who should be named as the conservator.  And those types of lawsuits can be nasty business.

But a well planned trust can avoid all of that because under the trust terms, you appoint a successor to manage your money if you ever become incapacitated.  You should also have a Health Care Directive in place so that you can name someone to make your medical decisions.  With these two documents properly prepared, your personal care and your assets can be quietly and easily managed until you return to full mental capacity.

So the next time someone tells you that a trust isn't necessary because it only takes effect after you're dead and gone, think again.  That trust may save you a lot of time, money and public scrutiny while you’re still alive.

Influencing the Court to Find for Undue Influence in California

Posted by Stewart R. Albertson on July 20, 2011

I’ve blogged before about using the concept of undue influence to overturn a California Will or Trust.  But knowing the definition of undue influence is only the first step.  To make the concept of undue influence useful, you have to know how to prove the existence of undue influence in a Court of law.  That can be trickier than it sounds.  Let’s walk though the primary options for proving undue influence in California: 

Under California law, undue influence consists of:

An Example of Undue Influence: 

It is usually easy to spot undue influence. For example, Jane has three children, namely, John, Jerry, and Jack. Jane is living with John at the end of her life, and relies on John for her daily living needs. John does not like his brothers Jerry and Jack. Six weeks before Jane dies, John drives his mother to an attorney to change her California Will or Trust, which disinherits Jerry and Jack. Now John goes from getting one-third of his mother’s Will or Trust to getting 100 percent. The question: Did John exercise undue influence over Jane? Most likely, yes. But how do you prove undue influence under California law? 

How to Prove Undue Influence under California Law: 

There are two primary ways to prove undue influence under California law—by either (i) shifting the burden of proof to John, in the example above, so he then has to prove an absence of undue influence, or (ii) by Jerry or Jack proving directly that John exercised undue influence over their mother. If at all possible, it is best to shift the burden to John to prove he did not exercise undue influence over Jane because it can be very difficult to prove the absence of something. If you don’t have facts that shift the burden of proof to John, then Jerry and Jack will have the burden of proving the existence of undue influence directly.

 How to Shift the Burden of Proof in an Undue Influence Case:

How do you shift the burden of proof to John so that he carries the burden to prove he did not exercise undue influence over Jane? Under California law there is a presumption of undue influence that arises if you can establish three facts:

  • Confidential Relationship: Jerry and Jack must prove that John had a “confidential relationship” with Jane, which can consist of John being Jane’s trustee, or agent under a power of attorney, or conservator, or perhaps, simply being Jane’s son.
  • Active Participation: John must have “actively participated” in the preparation or execution of the Will or Trust.
  • Undue Benefit: John must receive an “undue benefit” by way of the new Will or Trust.  

You can prove each of these facts where John (i) is the Executor or Trustee of Jane’s Will or Trust, (ii) arranged to have an attorney draft the new Will or Trust for Jane to sign, and (iii) where John’s interest in the Jane’s Will or Trust increases from one-third to a higher amount. 

Once these facts are proven, there is a presumption that John exercised undue influence over Jane causing her to create the new Will or Trust; and the burden of proof shifts to John to prove the absence of undue influence, which is not easy for John to do under this fact scenario. Essentially John has to prove a negative—i.e. that undue influence did not occur. 

 How to Prove Undue Influence Directly:

If you can’t prove facts shifting the burden of proof to John, you must prove undue influence directly. Circumstantial evidence is enough to prove undue influence. Here are the most likely facts you need to prove undue influence directly:

 Disinheriting a child: Provisions that are unnatural, cutting off from any substantial bequests the natural objections of the decedent’s bounty. When Jane disinherits Jerry and Jack, that is disinheriting her children, an unnatural act, which can indicate undue influence.

 Contradicting decedent’s former estate plan: Dispositions at variance with the decedent’s intentions, expressed before the document’s execution. If Jane had a previous Will or Trust that treated her children equally, but a new Will or Trust (or Amendment) contradicts the former Will or Trust (or Amendment), this can add to the conclusion that Jane was unduly influenced.

 Opportunity to control decedent: Relations existing between the chief beneficiaries and the decedent that afforded the former an opportunity to control the testamentary act. If Jane relied on John for her daily living needs, this can add to the conclusion that Jane was unduly influenced.

 Poor mental and physical condition: A testator whose mental and physical conditions are such as to permit a subversion of her freedom of will; and if there is evidence the testator had a weakened state of mind it is easier to demonstrate the pressure from another overcame the testator’s free will.

 Sudden negative shift in attitude: Under California law, courts may infer that Jane’s sudden negative shift in attitude toward Jerry and Jack was caused by John’s poisoning Jane’s mind because the court can find no other rational explanation.

 Decedent’s advanced age: A Will or Trust creator of advanced age at the time a document is signed adds to the conclusion the testator was unduly influenced.

 History of mental deficits: A Will or Trust creator with a history of mental deficits adds to the conclusion the testator was unduly influenced. California Probate code section 811 outlines the likely areas of mental deficits.

 History of Dementia or Alzheimer’s disease: A Will or Trust creator with a history of Dementia or Alzheimer’s Disease adds to the conclusion the testator was unduly influenced.

Testator under conservatorship: A Will or Trust creator that is under a court ordered conservatorship adds to the conclusion the testator was unduly influenced. 

The more of these facts you can establish, the easier it is to prove undue influence directly.

There you have it—a big picture view of how to prove undue influence cases under California law. In future blog posts, I will treat in further detail (i) the burden shift for undue influence cases, and (ii) proving undue influence directly.

Capacity Lite--How Undue Influence Can Be Used To Overturn a California Will or Trust When Lack of Capacity Allegations Fall Short.

Posted by Keith A. Davidson on April 19, 2011

People influence others every day, and most types of influence simply persuades a person to make a certain decision--where to eat, what to buy, who to like, you get the idea.

Sometimes influence can get out of hand and become "undue."  What separates normal influence from undue influence?  Simply put, undue influence is coercion.  It typically occurs when a person has a weakened mental state (such as with dementia or Alzheimer’s) and her intent is replaced with the intent of the undue influencer.  In other words, the Will or Trust the decedent creates no longer represents her intent, it represents the intent of the wrongdoer.  The wrongdoer is said to have “supplanted the intent” of the decedent (that term always makes me think of brainwashing—another good analogy).

The weakened mental state required to establish undue influence is not unlike the mental defect needed to prove lack of capacity.  Yet, with undue influence, the various elements of capacity are not required.  For example, capacity for the creation of a Will requires that a person knows (1) the nature and extent of their property, (2) their relationships to the persons who are to receive property under the Will, and (3) that they are making a Will.  And a Will is presumed valid unless the person lacked capacity at the very moment they signed the Will.  Thus, a person with dementia, who may have good days and bad days, could conceivably have capacity on the day of signing a Will and then lapse back into incapacity the next day.

When there is little or no medical evidence around the Will signing date, proving a lack of capacity at the time the Will was signed may be difficult.  But proving undue influence is another matter because all we need is a weakness of mind, plus some facts showing that weakness was taken advantage of by the wrongdoer.  Once established, it’s irrelevant whether a person had capacity when signing a Will.  Instead, the question turns on whether the person’s intent is reflected in the Will.  This is why I call undue influence “capacity lite.”

What’s more, with undue influence we have the ability at times to shift the burden of proof on to the opposing party (unlike capacity where the burden always remains on the person contesting the Will).  And that is a huge advantage when trying to overturn a Will.  How do we shift the burden?  We must prove that (1) the wrongdoer was in a confidential relationship with the decedent (such as principal and agent, or caregiver, etc.), (2) the wrongdoer participated in the Will creation, and (3) the wrongdoer profited from his actions (i.e., he received something under the Will or Trust).  Once established, the burden is passed on to the wrongdoer to prove that he did NOT engage in undue influence, which is very difficult to overcome.

In sum, undue influence can be a powerful weapon in trying to overturn a Will or Trust, when used properly.  And it can give a person contesting a Will or Trust some hope when capacity appears hard to prove.

Undue Influence--Supplanting the Intent of Another in California Trusts and Wills

Posted by Stewart R. Albertson on January 21, 2011

The concept of “undue influence” can be used to invalidate a Will or Trust. What is undue influence? According to the California legislature “undue influence” is the taking of an unfair advantage of another’s weakness of mind. In a word: coercion. For example, a caretaker befriends an elderly person and takes over the elder’s financial affairs, such as writing checks, paying bills, etc. Even though the elderly person already has a Will and Trust leaving all of her property equally to her two children, the caretaker takes advantage of his position of trust and convinces the elderly person to create a Will and Trust leaving everything to the caretaker and disinheriting the children. The Will and Trust that the elderly person creates under these circumstances does not reflect the elder’s intent (because she wanted her assets to pass to her children), rather it reflects the intent of the caretaker. The children can then sue after the elderly person’s death and challenge the validity of the Will and Trust based on Undue Influence of the caretaker.

Generally, the objectors of a Will or Trust (such as the children in the above example) have the burden of proving by a preponderance of the evidence that the caretaker exercised undue influence over the decedent.  But that burden of proof can shift to the caretaker if certain facts are present.  Once shifted, the caretaker then has to prove that he did NOT unduly influence the elderly person, and he must likely prove this by clear and convincing evidence (which is a higher standard).  This is nearly impossible for the caretaker to prove because he must prove a negative—that undue influence was not present—a hard task to accomplish.  Therefore, shifting the burden is critical and nearly always fatal once accomplished.

To shift the burden of proof to caretaker, the children must prove the following three elements:

  • Caretaker and Mom had a confidential relationship;
  • Caretaker participated in the creation of the changed Trust and Will; and
  • Caretaker unduly profited from the changed Trust and Will.

Under the above example, the burden would likely shift to the caretaker because there was a confidential relationship (since Mom was dependent on the caretaker for support and maintenance), we may have facts that he participated in the Will creation (we did not say that above, but it is a common occurrence), and the caretaker unduly profited by receiving all of the estate. 

What’s the likely outcome? More than likely, with the proper presentation at trial, the Probate Court will invalidate Mom’s Will and Trust and restore children’s inheritance.

Will Capacity vs. Trust Capacity: The Mental Measuring Stick under California Law

Posted by Stewart R. Albertson on December 09, 2010

In order for a person to create a valid Will or Trust they must have “sound mind.” The term “sound mind” is short hand for a rather complicated set of rules for determining mental capacity. If a person lacks proper mental capacity, then any document they sign is deemed invalid under California law. A person may lack proper mental capacity if they exhibit memory loss, or have been diagnosed with dementia or Alzheimer’s.

Surprisingly, there is more than one set of rules for testing mental capacity under California law—one for Wills and a different one for Trusts. The capacity required to make a Will (referred to as “Testamentary Capacity”) requires a person creating a Will to

  • understand he or she is creating a Will,
  • understand what property he or she owns, and
  • understand his or her relations to the persons who have claim to their assets (usually his or her children) and whose interests are affected by the terms of the Will.

Will capacity is considered the lowest form of mental capacity. In fact, a person can be deemed to lack the capacity to make a Trust, yet still have sufficient capacity to make a Will.

The mental capacity required to create a Trust is a higher capacity standard (referred as “Contractual Capacity”). In order to create a valid Trust, a person must be able to understand and appreciate the following:

  • The rights, duties and responsibilities created by, or affected by the decision,
  • The probable consequences for the decision maker and, where appropriate, the persons affected by the decision, and
  • The significant risks, benefits, and reasonable alternative involved in the decision.

The Trust capacity standard is much more stringent than the Will capacity standard requiring, among other things, a person to understand and appreciate the consequences of the decision being made. This is not a requirement under Will capacity. A person can create a Will without knowing, understanding or appreciating the consequences that Will may have on himself or others.

These two different levels of capacity are significant when creating Wills and Trusts for persons who are older or may be in the beginning stages of dementia, Alzheimer’s or memory loss. It is likely a person with the beginning stages of dementia has the capacity to create a Will, but may not have the capacity to create (or perhaps revoke) a Trust.

Best practices require that an older person, or any person, showing signs of memory loss or dementia should be evaluated by their primary care physician for a determination of the required capacity to create a Will, and further to create a Trust, before doing so. A primary care physician’s letter stating that an older person with memory loss or dementia has the capacity to create a Will (Testamentary Capacity) and further, has the capacity to create a Trust (Contractual Capacity) will be very difficult to overcome by a beneficiary or family member contesting the terms of the Will or Living Trust after the Will or Trust creator’s death.