An action setting forth a claim of undue influence is among the most common methods of contesting a will; however, an action for undue influence can also be effective in challenging lifetime gifts. As a general matter, undue influence is defined as mental, moral, or physical exertion which has destroyed the free agency of a party by preventing that party from following the dictates of his own mind and will and accepting instead the domination and influence of another. A plaintiff claiming undue influence has the burden of demonstrating a confidential relationship between the donor and the donee.
A confidential relationship encompasses all relationships whether legal, natural, or conventional in their origin, in which confidence is naturally inspired, or, in fact, reasonably exists. It exists where the relations between the parties appear to be of such a character as to render it certain that they do not deal on terms of equality, but that either on the one side from superior knowledge of the matter derived from a fiduciary relation, or from over-mastering influence; or on the other from weakness, dependence or trust justifiably reposed, unfair advantage is rendered probable. Family relations are among the most natural of confidential relationships.
In a will contest, a plaintiff additionally bears the burden of demonstrating suspicious circumstances. Though subjective and fact sensitive, such circumstances exist where a testator is isolated from others and dependent upon the beneficiary, where a beneficiary is involved in assisting the testator in the preparation of the will, or where there are questions as to the testators capacity, among other things.
Yet, in challenging a gift during the donor’s lifetime a plaintiff can present evidence of suspicious circumstances, but is not required. The reason for this is that a living donor is not likely to give to another something that he or she can still enjoy. The only requirement to create a presumption is the existence of a confidential relationship. Thereafter, the recipient of a challenged gift has the burden of showing by clear and convincing evidence not only that no deception or undue influence was used, and that all was fair, open and voluntary, but also that it was well understood.
Depending on the type of gift, rebutting a claim of undue influence for a lifetime gift may not be difficult. But where the gift is substantial, courts will generally view a challenged gift with greater scrutiny. An example of this is where a donor is dependent on and makes an improvident gift to a donee that strips the donor of all or virtually all his or her assets. In such circumstances, a presumption will arise that the donor did not understand the consequences of his act and the donee must show that the donor had the benefit of competent and disinterested counsel. Similarly, when a physically or mentally weakened donor, without receiving any advice, makes a gift to a donee on whom the donor depends. If that gift leaves the donor without adequate means of support, the presumption of undue influence can be conclusive.
As a practical matter, this raises concerns for parties who give and receive gifts of significance. While an attorney need not be involved for every act of giving, parties should be mindful of potential allegations of undue influence to ensure that gifts will survive any subsequent challenge. Certainly those who have concerns of undue influence—related either to a will or a lifetime gift—should consult with an attorney regarding any potential claim.