Protecting Our Most Vulnerable: The Unsettling Rise in Claims of Undue Influence
Americans are aging. According to the United States Census Bureau, by 2030, one in five Americans will be over the age of 65. In 1946, three million, four hundred thousand babies were born. This was a twenty percent rise from 1945. The year 1946 marked the beginning of the “baby boom.” The “baby boomer” generation is often defined as the post-World War II generation of children born from 1946 to 1964. When the boom subsided, there were 76.4 million “baby boomers” in the United States. They made up 40 percent of the nation’s population at the time. The current number of baby boomers in the United States is estimated to be about 72 million. The Pew Research Center estimates that during the 2020 pandemic, around three million baby boomers retired to join the already 25 million who had retired. With the increase in the elderly population in the United States, unfortunately, we are also witnessing a rise in cases involving elder abuse and the financial exploitation of vulnerable adults. These vulnerable adult victims are often times unduly influenced by bad actors.
What is Undue Influence?
Influence itself is not prohibited. The word “undue” is crucial when analyzing undue influence cases. The testator of a will or a settlor of a trust may be influenced in the disposition of property by specific and direct influences without the influences necessarily being undue. It is not undue or improper for a spouse, child, parent, relative, or friend to advise, persuade, argue, flatter, solicit, entreat, or implore. It is not necessarily improper for an individual to appeal to the testator or settlor’s hopes, fears, prejudices, sense of justice, sense of duty, sense of gratitude, or sense of pity. It is not improper for someone to appeal to ties of friendship, affection, or kinship. It is improper, however, if the testator or settlor is overpowered by such influence and is incapable of exercising his or her own free will.
Undue influence is a legal construct that involves a confidential relationship where a dominant party exploits his or her position of influence or power over a weaker, more vulnerable party, for financial gain. For purposes of Michigan law, Justice Levin defined undue influence in his dissent in Kar v Hogan, 399 Mich 529, 554, 251 NW2d 77 (1976): “Undue influence consists in persuasion carried to the point of overpowering the will, or such a control over the person in question as prevents him from acting intelligently, understandingly, and voluntarily, and in effect destroys his free agency and constrains him to do that which he would not have done if such control had not been exercised.” The influence exerted may be by force, threats, flattery, persuasion, fraud, misrepresentation, physical coercion, or moral coercion.
How to Recognize Undue Influence
Although many trust and estate contests involve allegations of lack of capacity, an individual may be a victim of undue influence even if he or she has the requisite legal capacity to make a will or trust. Victims of undue influence are often isolated from family, friends, and trusted advisors by the perpetrator. The victim places significant trust and confidence in the perpetrator. Often times, the perpetrator will make misrepresentations to the victim to gain a financial advantage. Victims tend to be elderly, vulnerable, physically frail, mentally deficient, or emotionally unstable. At times, there may be a family member who lives with or nearby the victim. The victim may rely on this family member for transportation, medication, care, or support. These family members can take advantage of the vulnerable adult and exploit them financially. Sometimes, the perpetrator can be a home healthcare worker, a housekeeper, or perhaps a neighbor. If a vulnerable adult is dependent upon another person who is in a position of power, over time, a pattern of undue influence can result.
Dysfunctional family situations or the recent death of a spouse can create an environment which leads to occurrences of undue influence or elder abuse. Instances of undue influence often arise with second, or subsequent marriages, and in blended family situations. Sadly, there are also times when elders are sexually abused and exploited by the perpetrator. A red flag, which may indicate a vulnerable adult is being exploited, is an abrupt change in professional relationships with attorneys, financial advisors, or tax advisors. Often times, the perpetrator of undue influence will persuade the victim to use a new advisor. Victims are encouraged to create new estate planning documents, change beneficiaries on life insurance or retirement accounts, or add the perpetrator’s name as the beneficiary to a transfer on death or payable on death account. The perpetrator may request gifts from the victim or ask for loans. Victims are known to add the influencer as a joint tenant to their accounts. The financial exploitation of vulnerable adults can take place in many different ways.
The Burden of Proof and the Presumption of Undue Influence
Under Michigan law, the burden of proof for a challenge of a will or a trust alleging undue influence lies with the challenger. Properly executed estate planning documents are presumed to be valid. However, many jurisdictions throughout the United States, including Michigan, have provided for a “presumption of undue influence” if the challenger can establish certain facts. In Michigan, the presumption of undue influence does not shift the burden of proof from the challenger to the proponent of the will or trust. Instead, it shifts the burden of production of evidence to the proponent of the will or trust being challenged. The proponent of the will or trust must effectively rebut the presumption of undue influence in order for the will or trust to stand. The requirements giving rise to the presumption of undue influence under Michigan law are as follows: (1) a confidential or fiduciary relationship must exist, (2) the alleged perpetrator must have benefited from a transaction, and (3) the alleged perpetrator had to have had an opportunity to influence the alleged victim in making the transaction.
Rebutting the Presumption
There is quite a bit of uncertainty in Michigan regarding the standard of evidence necessary to rebut the presumption of undue influence. The standard of evidence set forth in Michigan Court of Appeals cases are all over the map ranging from a scintilla of evidence to a preponderance of the evidence. The Michigan Supreme Court, in In re Estate of Mortimore, 491 Mich 925; 813 NW2d 288 (2012), let the Michigan Court of Appeals decision stand which approved the trial court’s ruling that the rebuttal of the presumption requires the proponent to produce a preponderance of evidence. In his dissent in Mortimore, Chief Justice Young argued that “the proponent need only introduce substantial evidence sufficient to create a question of fact regarding undue influence, at which point the trier of fact weighs the totality of the evidence and all permissible inferences therefrom to determine whether the will was a product of undue influence.” Mortimore, 491 Mich at 925-926 (Young, C.J., dissenting). In 2014, the Committee on Model Civil Jury Instructions withdrew prior Michigan Model Civil Jury Instructions M Civ JI 170.45 and 179.25, that addressed the burden of proof regarding the presumption of undue influence in will and trust contests. The Committee has not adopted replacement instructions to this day, and the appropriate instructions for jurors with regard to the burden of proof in presumption of undue influence cases remain unsettled.
Protecting Vulnerable Clients
In order to reduce the likelihood of occurrences of undue influence, attorneys should meet with vulnerable clients alone and outside the presence of any individuals who could benefit from any particular proposal or estate planning document being executed. If the vulnerable client does not want to include a particular family member as part of his or her estate plan, or if the vulnerable client wishes to treat similarly situated family members in different ways, then extra care should be exercised by the client’s attorney. Although it may be awkward to ask the client’s child or family member to not attend a meeting involving estate matters, it is in the best interest of the client and the attorney to exclude family members from such meetings. The mere presence of a family member or child in a meeting with the client and the estate planning attorney could open the door to claims of undue influence. Even if the client genuinely wants to exclude a child from their estate, the presence of another child, family member, or other individual in the meeting could jeopardize the intent of the client.
Not only must attorneys determine whether the vulnerable client possesses the requisite legal capacity to execute an estate planning document, they must also determine if there has been any evidence of undue influence which may have overpowered the will of their client. If there is any doubt about the client’s capacity or whether the client has been subject to undue influence, it may be necessary for the attorney to meet with the vulnerable adult client on multiple occasions prior to the signing conference. At times, it may be necessary to obtain psychological evaluations from the client’s physician or psychologist, and the date of the evaluation should be near the date of the client signing conference. It is good practice for attorneys to draft contemporaneous memoranda to place in the client’s file that provide notes and details about discussions the attorney has had with the client. Additionally, with vulnerable adult clients, it is imperative that the client has adequate time to review and understand the provisions of their final estate planning documents before they are executed.
Attorneys by nature are risk averse and clients may not always understand or appreciate the measures their counselors take to protect them from harm and ensure that their wishes and legacies are secured. Nonetheless, as the adage goes, an ounce of prevention is worth a pound of cure. Small steps taken by attorneys when representing elderly and vulnerable clients can go a long way in reducing the likelihood of financial exploitation, elder abuse, and costly litigation.
If you or your family members have questions about undue influence or any matters related to trust and estate litigation, please contact the authors.