Undue Influence in Estate Planning: When Help Goes Too Far

By Amy Erickson and Beth Morrison

The growing number of aging Americans, the prevalence of diminished capacity associated with aging, and the concentration of wealth among American seniors1 are likely to lead to an increase in will and trust contests, particularly those involving allegations of undue influence. In fact, anecdotally, Minnesota lawyers who practice in the area of trusts and estates litigation report they have seen a sharp increase in cases commenced in this area in recent years. Likewise, estate-planning attorneys, on a daily basis, face a rapidly aging population, resulting in growing concerns about their clients’ diminishing or diminished capacity and susceptibility to undue influence.

The scene faced by estate planning attorneys is familiar and goes something like this: A longtime client, Rose, who is now in her 90s, calls to schedule an appointment because she wants to change her estate plan. The following week, Rose appears at your office for her appointment, accompanied by her son, George. You are aware Rose has had some health issues in the past year, and she appears frail and withdrawn. George tells you he has been helping his mother with her finances, healthcare, and other personal matters and states his mother has decided she wants to change her estate plan. George waits in the lobby while you meet with Rose. During your meeting, Rose tells you she wants to change her estate plan to leave her entire estate to George, disinheriting two of her other children. Up to this point, Rose’s estate was to be divided equally among all of her children. When asked, Rose is not able to provide a clear rationale about why she wants to make this change to her estate plan. The next week, George calls to inquire whether you have made the updates Rose requested.

When faced with such a scenario, how do you know whether Rose is making the decision of her own volition rather than because of George’s undue influence? And, if you suspect the latter is true, what steps should you take to ensure that revising your client’s estate planning documents does not lead to a lawsuit upon her death? 

The Rise of Diminished Capacity, Elder Abuse, and Undue Influence 

Today, more than 40 million people in the United States are over the age of 65.2 This number will more than double by 2050, reaching 89 million.3 This increase—in large part—reflects the aging of the baby boomer generation, all of whom will reach age 65 by the year 2030.4 With age, comes a greater likelihood of diminished capacity, including mild to severe dementia and Alzheimer’s disease. In fact, studies suggest approximately 1.5 percent of American adults age 65 to 69 suffer from some form of dementia.5 As age increases, so too does the rate (and often the severity) of the dementia. By age 90, over half of American seniors will have some form of dementia.6

Adults with dementia are especially susceptible to elder abuse. In fact, approximately one in ten American adults over the age of 60 has experienced some form of elder abuse.7 Notably, in nearly 60 percent of these cases, the perpetrator is a family member—more often than not an adult child or a spouse.8 Elder abuse can take many forms, including physical and emotional abuse, financial exploitation, and undue influence. The latter—undue influence—is especially important for attorneys who practice trust and estate law, whether they are estate planners or litigators. Specifically, it is important for practitioners to understand the law regarding undue influence and its signs so undue influence is addressed before the “help” goes too far.

The Law Regarding Undue Influence 

Minnesota law defines undue influence as “influence of such a degree exerted upon the testator by another that it destroys or overcomes the testator’s free agency and substitutes the will of the person exercising the influence for that of the testator.”9 In general, whether undue influence exists depends on the effect of the influence on the testator, considering the testator’s physical and mental condition; the person exercising the influence; and the time, place, and surrounding circumstances.10 The same standard applies in both will and trust contests.11

Undue influence is typically shown only by circumstantial evidence.12 Further, whether undue influence exists is typically a question of fact.13 Factors indicating the existence of undue influence in the making of a will or trust include:

1. An opportunity to exercise influence;
2. A confidential relationship between the testator and the person purportedly exercising the influence;
3. Active participation in the preparation of the will by the person purportedly exercising undue influence;
4. Disinheritance of those who would likely have been named in the will;
5. Singularity of the will or trust’s provisions; and
6. The use of influence or persuasion to induce the testator to make the will or trust in question.14

Minnesota courts have found that an opportunity to exercise undue influence exists where there is a confidential relationship, for example, a testator and undue influencer have a close friendship, and the decedent relied on the influencer to act as an advisor, and assist in various personal and business matters.15

Where those who would likely have been named in the will and the singularity of the will or trust’s provisions, a change from former testamentary intentions strongly supports undue influence.16 This is especially true “where the effect of the change is to give the beneficiary charged with exercising undue influence a ‘larger’ share of the testator’s estate than he otherwise would have received.”17

To invalidate a will or trust on the grounds the testator was unduly influenced, however, the evidence must show the influence exerted was “so dominant and controlling of the testator’s mind that, in making the will he ceased to act of his own free volition and became a mere puppet of the wielder of the influence.”18 Conjecture and suspicion are insufficient to prove undue influence.19 Undue influence requires clear and convincing evidence.20 With regard to the influence itself, participation of the alleged influencer in preparation of the will or trust is an important indicator of undue influence, and one that may be relatively easy to spot if an attorney is paying close attention. 
However, it is important to keep in mind undue influence is rarely committed in the open, but rather is commonly exercised behind the scenes. Thus, to prove an undue-influence claim, an attorney needs to examine carefully the facts and events leading up to the execution of the will or trust at issue.

This is often done by creating a clear timeline of the events, reviewing and analyzing communications between the testator and the alleged influencer, and interviewing independent third parties who knew both the testator and the alleged influencer. At trial, witnesses will often include family members and friends who were close to and spent time with the testator around the time of the execution of the will or trust at issue, caregivers, and anyone else who assisted the testator with other personal or financial matters. Further, and notably, the attorney who drafted the will or trust at issue is often a key witness at a trial in which undue influence is alleged.

A testator’s capacity is also a factor used in proving undue influence. Along with advanced age and physical weakness, a lack of or diminished capacity may indicate a person is susceptible to undue influence.21 Under Minnesota law, testamentary capacity exists if the testator knows the nature, situation, and extent of her property, is aware of the claims of others to her property, and can form a rational judgment concerning her property.22 The test for capacity is whether the testator had mental capacity at the actual time of making the will or trust. As such, “[a] will [or trust] made by a person otherwise lacking testamentary capacity during a lucid interview, when he possessed such capacity, is valid.”23 Less mental capacity is required to make a will than to conduct regular business affairs.24 In fact, even a person who is subject to a conservatorship has been found to have sufficient capacity to execute a will.25

Factors considered in determining whether a testator lacked capacity when making a will or trust include:

1. The reasonableness of the property disposition;
2. The testator’s conduct around the time the will or trust was made;
3. Prior adjudication of the testator’s capacity; and
4. Expert testimony pertaining to the mental and physical condition of the testator.26

Finally, the burden of proving undue influence is on the individual or individuals contesting the will or trust at issue.27

Recognizing Diminished Capacity and Undue Influence in Your Clients 

So, how do you recognize diminished capacity and undue influence in your clients? 

Examine the testator’s physical and mental capacity. Look for signs of frailty, confusion, and an inability to provide a clear rationale for the requested changes to the testator’s estate plan, such as those seen in Rose. This can often only be accomplished with multiple meetings. Consider meeting with the client at different times or different locations throughout the day; it is common for clients with diminished capacity to be clearer in the morning, and it may make the client more comfortable to schedule a meeting in his or her own home. Keep in mind laws regarding capacity draw distinctions between the capacity to marry, the capacity to enter into a contract, and the capacity to execute a will. As described above, the requisite capacity to execute a will is a relatively low bar. At the time of execution, testators must understand the document will control the distribution of their assets at their death, the nature and extent of their assets, and who the natural objects of their bounty are. Thus, so long as Rose grasps these three principles in a lucid moment while signing, she may still meet the capacity requirements to execute her estate plan, even if she is unable to do so moments later.

Scrutinize unexpected gifts and/or significant changes to a longstanding estate plan. Ask clients open-ended questions regarding the change to their plan. Clients with diminished capacity may answer yes to questions even if they do not fully understand. Try to get the client to explain his or her reasoning for the change and document the client’s explanation. Rose’s desire to deviate from her long-standing estate plan and disinherit two of her children should raise red flags. In such situations, it is especially important to ensure a clear rationale is provided as to why she wishes to deviate from her long-standing estate plan. If Rose can, in fact, provide a clear rationale as to the desired changes to her estate plan, it is less likely a court would later rule her estate plan was the product of undue influence. 

Look for isolation and the opportunity to exercise influence. It may be necessary to include family members in client meetings to ease the client’s anxiety but make the interview as private as possible. If the family member attends the meeting, try to find a time when you can discuss the estate plan alone with the client, even if for a short time. For an excellent resource to help explain to a family member why you must speak to the client alone, consider giving him or her a copy of the ABA Commission on Law and Aging’s brochure, “Why Am I Left in the Waiting Room? Understanding the Four C’s of Elder Law Ethics.”28 Further, look for signs a family member, caregiver, friend, or other individual may be putting pressure on the testator to change his or her estate plan. For instance, be wary of family members—like George—who purport to express Rose’s wishes. In such a situation, it is especially important to find some time alone with Rose and ensure George’s comments truly reflect her wishes. 

Look to the Rules of Professional Conduct for Guidance

In Minnesota, when a client appears to be suffering from diminished capacity, the lawyer’s duty to abide by the client’s decisions is guided by the Minnesota Rules of Professional Conduct; specifically Rule 1.14. When a client’s capacity to make adequately considered decisions in connection with a representation is diminished, the lawyer shall—as far as reasonably possible— maintain a normal client-lawyer relationship with the client.29

In determining the extent of the client’s diminished capacity, the lawyer should consider and balance such factors as: “the client’s ability to articulate reasoning leading to a decision, variability of state of mind and ability to appreciate consequences of a decision, the substantive fairness of a decision, and the consistency of a decision with the known long-term commitments and values of the client. In appropriate circumstances, the lawyer may seek guidance from an appropriate diagnostician.”30 Where a lawyer expects an estate plan may be challenged upon a client’s death, it is not uncommon for an attorney to request that a physician evaluate and document the testator’s capacity prior to making any changes to the will or trust. In fact, the Minnesota Rules of Professional Conduct affirmatively state a lawyer “should take steps to preserve evidence regarding the client’s testamentary capacity.”31 Such documentation may later be presented in connection with litigation challenging the estate plan and can be effective evidence that the testator in fact had capacity and the will or trust at issue was not the product of undue influence. 

Importantly, “the lawyer should not prepare a will for a client whom the lawyer believes lacks the requisite capacity. On the other hand, because of the importance of testamentary freedom, the lawyer may properly assist clients whose testamentary capacity appears to be borderline.”32

When a client suffers from diminished capacity, a typical attorney-client relationship may not be possible. Comment [5] of Rule 1.14 expressly authorizes a lawyer to consult with a client’s family to protect the client if the client is “at risk of substantial physical, financial, or other harm unless action is taken.” If family members or other individuals participate in discussions with the lawyer, the lawyer must keep the client’s interests foremost and, except for the protection actions authorized by the Rule, must look to the client, and not family members, to make decisions on the client’s behalf.33

In many cases, a family member may be exploiting the client; therefore, Comment [5] permits the lawyer to take other protective measures deemed necessary. Such measures include “using a reconsideration period to permit clarification or improvement of circumstances, using voluntary surrogate decision-making tools, such as durable powers of attorney or consulting with support groups, professional services, adult-protective agencies, or other individuals or entities that have the ability to protect the client.” If left without any other viable options, the lawyer should consider whether appointment of a guardian ad litem, conservator, or guardian is necessary to protect the client’s interests.34 In many circumstances, however, appointment of a legal representative may be more expensive or traumatic for the client than circumstances in fact require.35 In considering alternatives, the lawyer should be aware of any law requiring the lawyer to advocate the least restrictive action on behalf of the client. In taking any protective action, the lawyer should be guided by such factors as the wishes and values of the client to the extent known, the client’s best interests and the goals of intruding into the client’s decision- making autonomy to the least extent feasible, maximizing client capacities, and respecting the client’s family and social connections.36

Electronic Wills and the Future of Undue-Influence Cases

The Uniform Law Commission recently passed the Uniform Electronic Wills Act which will serve as a model for states to enact similar legislation. To date, Nevada and Indiana have laws allowing electronic wills and more states are sure to follow suit. As legislation regarding electronic wills inevitably makes its way into each state, the world of undue influence cases will also become more widespread. In general, an electronic will can be executed by a testator in the “presence” of an electronic notary public and witnesses. Nevada’s 2017 legislation provides a person “is deemed to be in the presence of or appearing before another person if the persons are in the same physical location, or if they are in different physical locations but can communicate with each other by means of audio-video communication, by which they are able to see, hear, and communicate with each other in real time (such as by Skype webcam connection).37

One factor often considered in an undue influence case is whether the influencer was present as the estate plan was signed. One can easily imagine a scenario where the webcam is focused solely on the testator as she signs her electronic will in the “presence” of an electronic notary public and witnesses, and no one would know if there was anyone else in the room. How do we guard against the fraudulent creation of these documents? How do we ensure the person executing an electronic will is not being coerced?

Preventing a Challenge to the Estate Plan

In spite of the risks of creating an estate plan for someone suffering from diminished capacity or subject to undue influence, steps can be taken to mitigate the risk of litigation in the future. First, always encourage clients to discuss their estate plan with their families—particularly in cases where a child is being favored for a logical reason (i.e., only one child wants to run the family farm). Such conversations can prevent speculation and heartache down the road. Family dynamics inevitably shift after the patriarch and matriarch of a family are gone, and a child is more likely to accept a parent’s decision if a parent explains it while the parent is still alive than when a sibling does after the parent has passed. The attorney can offer to host a family meeting if the client wants assistance or support. If clients refuse to have a frank conversation with their family, encourage them to write a letter explaining their decisions. This letter can be kept in their file and may help with unanswered questions upon their death. 
Of course, if the letter is not accepted as intended, litigious family members can also use it as further proof of undue influence or capacity issues. Finally, as noted above, in cases in which a will or trust is likely to contested, it may be helpful to request the client’s physician conduct a mini mental status examination shortly before execution of the estate plan. This exam is a simple questionnaire used extensively in clinical and research settings to measure cognitive impairment. If the results are positive, the test could be strong evidence of capacity at the time of signing. 

Conclusion

In light of the increase in the number of aging Americans, the corresponding rise in diminished capacity, and the projected changes in the law regarding undue influence, it is likely that Minnesota attorneys will continue to face a growing number of cases of undue influence in the coming years. Thus, it is more important than ever that attorneys recognize the signs of diminished capacity and undue influence so they can be prepared to take the necessary steps to protect “Rose” when it appears “George’s” help has gone too far and amounts to undue influence.

As a litigator, Amy Erickson is a dedicated advocate for her clients, focusing her practice on administrative and regulatory investigations and disputes; political law and government relations; trusts and estates litigation; and complex civil litigation.

Beth Morrison works with clients, individuals, and businesses alike, to implement tax-efficient estate plans. Her experience includes drafting trusts, wills, real estate documents, and other estate planning tools.

 



Notes

1 Neil Howe, The Graying of Wealth (Mar. 16, 2018), https://www.forbes.com/sites/neilhowe/2018/03/16/the-graying-of-wealth/#46ebffe302da. 

2 Jacobsen et al., America’s Aging Population, Population Reference Bureau, at 3 Fig. 1 (2011), https://assets.prb.org/pdf11/aging-in-america.pdf..

3  Id. at 1.

4  Jacobsen et al., Aging in the United States, Population Reference Bureau, at 3 (2015), https://assets.prb.org/pdf16/aging-us-population-bulletin.pdf..

5  Robert B. Fleming, Dealing with the Aging Client (2014).

6  Id.

7  Elder Abuse Facts, National Council on Aging, https://www.ncoa.org/public-policy-action/elder-justice/elder-abuse-facts/#intraPageNav1. 

8  Id.

9  In re Wilson’s Estate, 27 N.W.2d 429, 432 (Minn. 1947). 

10 Id.

11 Arneson v. Arneson, 372 N.W.2d 20, 21–22 (Minn. Ct. App.1985) (construing a will and trust using same standards), review denied (Minn. Oct. 11, 1985). 

12  In re Estate of Peterson, 283 Minn. 446, 449, 168 N.W.2d 502, 504 (1969).

13  Appeal of Borstad, 45 N.W.2d 828, 832 (Minn. 1951). 

14 Norwest Bank Minnesota North, N.A. v. Beckler, 663 N.W.2d 571 (Minn. Ct. App. 2003). 

15  Norlander v. Cronk, 221 N.W.2d 108, 111-12 (1974). 

16  In re Olson’s Estate, 35 N.W.2d 439, 446 (Minn. 1948).

17  Id. (citing Chamberlain v. Gordon, 151 N.W. 529, 529 (Minn. 1915). 

18  In re Estate of Novotny, 385 N.W.2d 841, 843 (Minn. Ct. App. 1986). 

19  In re Estate of Torgersen, 711 N.W.2d 545, 550-51 (Minn. Ct. App. 2006). 

20  In re Pundt’s Estate, 157 N.W.2d 839, 841 (Minn. 1968).

21 79 Am. Jur. 2d, Wills § 396.

22 In re Healy’s Estate, 68 N.W.2d 401, 403 (Minn. 1955). 

23  In re Olson’s Estate, 35 N.W.2d 439, 444 (Minn. 1948). 

24  In re Estate of Prigge, 353 N.W.2d 569, 572 (Minn. Ct. App. 1986).

25 See, e.g., Matter of Congdon’s Estate, 309 N.W.2d 261, 267 (Minn. 1981). 

26 In re Estate of Anderson, 384 N.W.2d 518, 520 (Minn. Ct. App. 1986) (citations omitted).

27  In re Mitchell’s Estate, 44 N.W. 885, 886 (Minn. 1890). 

28  Available online at the Commission’s “Publications” page at http://www.americanbar.org/groups/law_aging/publications.html..

29  Minn. Rules of Prof. Cond. 1.14.

30  Minn. Rules of Prof. Cond. 1.14 (6). 

31  ACTEC Commentaries on the Model Rules of Professional Conduct Rule 1.14, at 132 (4th ed. 2006).

32  Id.

33  Minn. Rules of Prof. Cond. 1.14 (3).

34 Minn. Rules of Prof. Cond. 1.14 (7).

35  Id.

36  Minn. Rules of Prof. Cond. 1.14 (5).

37 Bruce M. Stone, Eliam Medina, and Suzanne Brown Walsh, Technology and Estate Planning: The Rise of the Machines, pg. II-C-7 (2018).