1. B. Undue Influence Lord Justice Hannen 1

2. Undue influence  We continue our discussion of doctrines that address the question whether a will or trust is a genuine expression of donor intent  There are general principles for defining “undue influence,” but this is one of the many doctrines for which one can understand the contours of the doctrine only by reading a lot of cases that apply the doctrine 2

3. Undue influence “A donative transfer is procured by undue influence if the wrongdoer exerted such influence over the donor that it[:] overcame the donor’s free will and caused the donor to make a donative transfer that the donor would not otherwise have made….” Restatement (Third) of Property: Wills and Other Donative Transfers §8.3(b) (2003). 3

4. Undue influence  Inference of undue influence can be raised when  Donor was susceptible to undue influence  Alleged wrongdoer had opportunity to exert undue influence  Alleged wrongdoer had a disposition to exert undue influence  There was a result appearing to be the effect of undue influence Restatement (Third) of Property: Wills and Other Donative Transfers §8.3 (2003), comment. 4

5. Rose Lakatosh Roger Jacobs Estate Lawyer Drafted Will Second Cousins Estate of Lakatosh, p. 182 656 A.2d 1378 (Pa. Super. 1994) 5

6. Estate of Lakatosh, p.182  Lakatosh provides an easy case of undue influence  Roger exploited an elderly woman, Rose  He visited her at least once a day, and helped her around the house and with her errands  After gaining her confidence and trust and only a few months after they met, Roger got her to give him power of attorney and used his cousin to draft the documents  When Roger took Rose to sign the will, she was not focused or coherent  He then began to drain her estate for the benefit of himself and his friends.  What if Roger had not drained the estate while Rose was alive? 6

7. Note the possibility of lack of capacity or insane delusion  If she wasn’t focused or coherent, and she was out of touch with reality (p.183) when she executed the will, did she know what she was doing?  Also, she believed that her nephew had threatened to rob and kill her and that he was persecuting and torturing her. 7

8. Presumptions & Burden Shifting Types of Confidential Relationships: Fiduciary (attorney, appointed agent) Reliant—special trust and confidence (financial adviser, physician) Dominant-subservient (feeble adult and caregiver or adult child) Examples of Suspicious Circumstances: Secrecy or haste Participation of wrongdoer in drafting of will Reasonable person would regard it as unnatural, unjust or unfair Donor’s attitude toward others changed by reason of his relationship with the alleged wrongdoer Confidential Relationship Suspicious Circumstances Presumption of Undue Influence (Burden Shifting) += 8

9. Undue influence States vary in what counts as a suspicious circumstance In California, you have to show that the undue influencer (1) was active in procuring the will and (2) "unduly" profited from it. In Tennessee, courts will look at a broad range of evidence, much like the list on page 185. 9

10. Undue influence in Indiana If a confidential relationship exists (attorney-client, principal-agent, husband-wife, parent-child, pastor- parishioner), then contestant shifts burden of proof If the influencer benefits from the questioned transaction The presumption of undue influence may be rebutted by establishing through clear and convincing evidence that the influencer acted in good faith, the influencer did not take advantage of the position of trust, and the transaction was fair and equitable 10

11. Undue influence in Indiana Note that if the undue influence arises from the facts of the case rather than a recognized fiduciary relationship, a confidential relationship is established if it is shown that the parties did not deal on terms of equality the influencer dealt with superior knowledge of the matter derived from a fiduciary relationship, the influencer dealt from a position of overpowering influence, or the testator dealt from a position of weakness, dependence or trust justifiably reposed in the influencer Lucas v. Frazee, 471 N.E.2d 1163, 1167 (Ind. Ct. App. 1984) 11

12. Moses, p.186 As with Strittmater, we have a case whose outcome reflects social attitudes of the day much more than principles of undue influence. What’s the story here? Ms. Moses left her estate to Clarence Holland, who was both her lover and attorney. Her sister challenged the will. 12

13. Fannie Moses Sister Husband 1 Husband 2 Husband 3 Clarence Holland (lawyer and paramour) In re Will of Moses In re Will of Moses, 227 So. 2d 829 (Miss.1969) 13

14. Moses Do we have a confidential relationship? Clarence served as her attorney, so we have a fiduciary. Were there suspicious circumstances? The court thought Ms. Moses’ medical problems and alcoholism made her vulnerable He also faulted the lack of independent advice from the lawyer (who acted as a scrivener rather than a counselor), but note that the lawyer had no connection with Clarence 14

15. Moses What was really going on ? The court’s pejorative view of her relationship (aging woman with a “pathetic hope that she might marry him”). Would the court have said the same if Fannie were Frank and Clarence were Clara (note 2, p. 190)? Fannie and Clarence were engaged in a “meretricious” relationship (i.e., they were lovers out of wedlock). But the intimate relationship between Fannie and Clarence should have counted as support for upholding the will rather than for invalidating the will (note 1, p. 190) 15

16. Moses Why shouldn’t the court have been suspicious? Ms. Moses had a many-year, intimate relationship with Holland The lawyer who drew up the will really was independent (unaware of their relationship and no connection to Holland) and was a well- respected attorney Holland was unaware that she was leaving her estate to him The lawyer drafted the will according to Ms. Moses’ instructions. Ms. Moses was a very good businessperson who managed her real estate properties well She “executed her last will after the fullest deliberation, with full knowledge of what she was doing, and with the independent consent and advice of an experienced and competent attorney whose sole purpose was to advise with her and prepare her will exactly as she wanted it” (p. 189). 16

17. Kauffman, p. 191 Robert Kauffman was a multimillionaire by virtue of inheritance and developed an intimate relationship with Walter Weiss after moving from DC to NYC to establish a life independent of his family Between 1951 and 1958, Robert executed a series of wills, gradually giving more of his estate to Walter and less to his family. He also wrote a letter with the 1951 will that was attached to each successive will explaining to his family why he was “eternally grateful” to Walter Robert’s family did not like Walter, whom they thought gave Robert interfering business advice about the family-owned Kay Jewelry storesKay Jewelry 17

18. Robert Kaufmann Walter Weiss Family: Kay Jewelry In re Kaufmann’s Will In re Kaufmann’s Will 247 N.Y.S.2d 664 (App. Div. 1964), aff’d, 205 N.E.2d 864 (N.Y. 1965) 18

19. Was there undue influence, pages 184-185? pages 184-185 Was there a confidential relationship? Court saw a dominant-subservient relationship Were there suspicious circumstances? Robert’s attitude toward his family changed as a result of his relationship with Walter Disposition in will was unnatural? Another case reflecting the social mores of its time 19

20. What were the facts in Lipper v. Weslow?, p. 193 Sophie Block left her estate to her children from her second marriage, with nothing for the family of her deceased son from her first marriage What were the grounds for a claim of undue influence? Her son from her second marriage wrote the will (confidential relationship and suspicious circumstance) The son got one-half instead of one-third of the estate (unnatural/unfair and therefore a suspicious circumstance) The son did not read the will to Sophie before she signed it The son bore ill will toward his half brother, had a key to Sophie’s house and therefore had the opportunity to prevent her from receiving cards and flowers from her deceased son’s family 20

21. Sophie Block Julian Mr. Lipper JulianJulia G. Frank Mr. Weslow Lipper v. Weslow Lipper v. Weslow 369 S.W.2d 698 (Tex. Civ. App. 1963) Irene Alice Bernice 21

22. Was there undue influence? What was unusual about the court’s legal analysis? It put the burden of proof on the contestants rather than shifting the burden after the showing of a confidential relationship and suspicious circumstances What was bad about the son’s writing of the will? He wrote Sophie’s explanation in legalese rather than having her write it in her own words, and he put it in the will rather than create it as a separate document He didn’t let Sophie see the will in advance or share it with independent counsel He included a no-contest clause without leaving anything to the deceased son’s family Was there sufficient evidence to overcome the claim of undue influence? Sophie was in excellent health and of sound mind; her will was consistent with the testimony of friends 22

23. Bequests to Attorneys Undue Influence  Many courts hold that a presumption of undue influence arises when an attorney-drafter receives a legacy, except when related to the testator. Unethical Conduct  “A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient … is related to the client.” Model Rule and Ind. Rule 1.8(c) Fiduciary Appointments  “In obtaining the client’s informed consent to the conflict, the lawyer should advise the client concerning the nature and extent of the lawyer’s financial interest in the appointment, as well as the availability of alternative candidates for the position.” Model Rule 1.8(c), comment 23

24. Will contest planning Contest Grounds Most common grounds for a will contest are lack of capacity and undue influence. Often alleged together; testator’s mental status overlaps with the susceptibility element of undue influence. Warning Signs “Unnatural disposition”—e.g., omission of child or unequal shares for children New testamentary scheme makes a radical departure Multiple or blended families. Imposes conditions that are likely to anger the beneficiary. Makes a disposition to a person unpopular with the testator’s family. 24

25. Precautionary measures, pages 205-206 Record Building  Letters between lawyer and client  Recorded video discussion  Professional examination of capacity Maintain Secrecy  Inter vivos trust  Inter vivos gifts Soothe Feelings  Family meeting  Letter or video explanation 25  Disinterested witnesses with affidavits  Inter vivos trust

26. Inter vivos trusts In will challenges, the basic question facing the court is whether the testator really intended the dispositions in the will With a trust that has existed for an extended period of time, it’s easier to persuade the judge that it genuinely reflects the wishes of the grantor Trustee will be able to testify to the grantor’s capacity based on series of interactions In addition, if a long-standing trust is invalidated, months or years worth of transactions are invalid. Trying to undo all of those transactions, many of which involved innocent third parties, will discourage many courts from findings of incapacity 26

27. Inter vivos trusts As a practical matter, challengers will need to contest trusts immediately. But how will they know about them? And if they do find out, they may be reluctant to antagonize the grantor, who can rewrite any trust or will In the Kauffman case, then, Robert would have been better off had he established an inter vivos trust Other useful steps would have been to make a bank the trustee, rather than have Walter handle business matters, and to rewrite or update the 1951 letter with each successive will 27

28. C. Fraud 28

29. Forms of fraud Fraud Testator is deceived by a deliberate misrepresentation and as a result does that which s/he would not have done. The misrepresentation must be made with the intent to deceive the testator and a purpose to influence the disposition Fraud in the Inducement A misrepresentation causes the testator to execute or revoke a will, to refrain from executing or revoking a will, or to include particular provisions in the wrongdoer’s favor. Fraud in the Execution A person intentionally misrepresents the character or contents of the instrument signed by the testator, which does not in fact carry out the testator’s intent. 29

30. Remedies for fraud Invalidate the fraudulently procured provision Refuse to probate the will Probate the will and impose a constructive trust 30

31. Puckett v. Krida, p. 209 Two nurses were hired to care for Nancy Hooper after she returned home from being hospitalized with Alzheimer’s disease By misleading Hooper into thinking her family was misappropriating funds, the nurses were able to obtain a power of attorney, a deed and dispositions in her will 31

32. Nancy Hooper Nurse Krida Nurse Reeves Jean Law (niece) Puckett v. Krida Puckett v. Krida, 1994 WL 475863 (Tenn. App. 1994) 32

33. Was there undue influence or fraud? There was a confidential relationship from the nurse-patient relationship and power of attorney There was a suspicious circumstance from the deliberate misrepresentations that changed Ms. Hooper’s attitude toward the niece and induced her to favor the nurses This court, like others, applies the same burden- shifting rules for fraud as for undue influence 33

34. D. Duress 34

35. Duress When undue influence becomes overtly coercive, it is called duress.undue influence “A donative transfer is procured by duress if the wrongdoer threatened to perform or did perform a wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise have made.” Restatement (Third) of Property: Wills and Other Donative Transfers §8.3(c) (2003). The law invalidates transfers compelled by duress. 35

36. Latham v. Father Divine p. 210 Mary Lyon had executed a will three years before her death, in which she left her estate to Father Divine, two corporations affiliated with Divine and an individual follower of Divine Lyon’s first cousins claimed that she planned to execute a new will leaving much of her estate to them, but that Divine and the others stopped her, first by using physical force and then by killing her during surgery 36

37. Mary Lyon Father Divine Follower Affiliated Corp. 1 Affiliated Corp. 2 Latham v. Father Divine Latham v. Father Divine, 85 N.E.2d 168 (N.Y. 1949) 37

38. The value of a constructive trust Invalidating the will would not have helped the contestants since they claimed that duress prevented Ms. Lyon from executing a new will that favored them Had the will been invalidated, the estate would have gone to Ms. Lyon’s intestate heirs (the contestants were cousins but not next of kin, p. 210) 38

39. Undue Influence “A donative transfer is procured by undue influence if the wrongdoer exerted such influence over the donor that it[:] overcame the donor’s free will and caused the donor to make a donative transfer that the donor would not otherwise have made….” Restatement (Third) of Property: Wills and Other Donative Transfers §8.3(b) (2003). 39

40. Presumptions & Burden Shifting Types of Confidential Relationships: Fiduciary (attorney, appointed agent) Reliant—special trust and confidence (financial adviser, physician) Dominant-subservient (feeble adult and caregiver or adult child) Examples of Suspicious Circumstances: Secrecy or haste Participation of wrongdoer in drafting of will Reasonable person would regard it as unnatural, unjust or unfair Donor’s attitude toward others changed by reason of his relationship with the alleged wrongdoer Confidential Relationship Suspicious Circumstances Presumption of Undue Influence (Burden Shifting) + = 40