UNDUE INFLUENCE IN INTER VIVOS GIFTS BETWEEN SPOUSES

February 28, 2011 § 6 Comments

Mansfield and Patricia were married in 1994, when both were in their 40’s. It was the second marriage for each, and they had children by the previous marriages. Patricia suffered health problems during the marriage, and she received a Phen-Phen settlement in 2001.

On March 15, 2002, Patricia executed a will devising her entire estate to her three adult children and her sister. The will included this language: “Mansfield Langston, my husband, has his own estate in his name, therefore no provision for him is made in this will.”

Soon after in 2002, there was a series of transactions between the parties that ultimately resulted in a home being titled in joint ownership between Mansfield and Patricia, with right of survivorship. The home had formerly been in her sole name. There were other related transactions, the most significant of which was that a $200,000 CD was converted to joint tenancy with right of survivorship.

On May 11, 2005, Patricia died of a sudden illness, and Patricia’s estate was opened by her mother. The estate sought to set aside the joint tenancies in the marital home and the certificate of deposit in order to bring those assets into the estate for distribution to the will beneficiaries, who were Patricia’s adult children and Patricia’s sister.

Following the trial, the chancellor found that a confidential relationship existed between Mansfield and Patricia. Therefore, the chancellor ruled that the burden shifted to Mansfield to prove by clear and convincing evidence that the creation of the joint tenancies was not the result of undue influence. The chancellor held that Mansfield did not meet this burden, and both joint tenancies were set aside and brought into Patricia’s estate.

In the case of Estate of Langston, in a well-reasoned, authoritative opinion by Judge Griffis, the COA on March 30, 2010, reversed the chancellor and held that the presumption of undue influence did not apply to inter vivos transactions between husband and wife.  The ruling in effect extended the prior rule that the presumption of undue influence did not apply to testamentary dispositions between spouses.

On February 24, 2011, the Mississippi Supreme Court affirmed the COA in the case of Estate of Langston v. Williams in an opinion authored  by Justice Dickinson and joined by all but Graves, who has departed for his federal gig in New Orleans, that concludes with this key language:

“A confidential relationship between spouses does not create a presumption that one spouse used undue influence over the other to obtain an inter vivos gift. And one who claims the gift was the product of undue influence bears the burden of proof.”

The burden of proof is by clear and convincing evidence.

The case was remanded to Sunflower County Chancery Court to allow the estate to make a record on the issue, since the chancellor had ruled (properly under the law in effect at the time) that such a presumption did exist, so that the estate was neither required to prove, nor was it given the opportunity to prove, undue influence.

It’s not uncommon for issues like these to surface in second marriages of older couples where there are children by a prior marriage.  If you find yourself being presented with undue influence claims in a similar case, I encourage you to read Judge Griffis’s COA opinion.  It’s about as good an exposition of all the applicable case law that you will find.

ANATOMY OF A WILL CONTEST II: PROVING UNDUE INFLUENCE

September 21, 2010 § 5 Comments

We already took a look at testamentary capacity here.  This post deals with the other pole of the will contest:  undue influence.

A presumption of undue influence arises where a confidential relationship is proven to exist.  Estate of Holmes, 961 So.2d 674, 680 (Miss. 2007).  A confidential relationship does not have to be a legal one, and the relationship may be moral, domestic, or personal, and ” … the confidential relationship arises when a dominant over-mastering influence controls over a dependent person or trust, justifiably reposed.”  Murray v. Laird, 446 So.2d 575 (Miss. 1984).

A confidential relationship exists where one person is in a position to exercise dominant influence over the other because of the latter’s dependency on the former due to weakness of mind or body, or due to trust; the law considers such a relationship to be fiduciary in character.  Madden v. Rhodes, 626 So.2d 608, 617 (Miss. 1993).  The party seeking to prove existence of a confidential relationship must do so by clear and convincing evidence.  Whitworth v. Kines, Id. at 230.

In making its determination whether a confidential relationship exists, the trial court must consider the seven factors set out by the Mississippi Supreme Court in Dabney v. Hataway, 740 So.2d 915, 919 (Miss. 1999). Those factors are:

  1. Whether one person has to be taken care of by others.
  2. Whether one person maintains a close relationship with another.
  3. Whether one person is provided transportation and medical care by another.
  4. Whether one person maintains joint accounts with another.
  5. Whether one is physically or mentally weak.
  6. Whether one is of advanced age or poor health.
  7. Whether there exists a power of attorney between the one and the other.

After considering the seven factors, the court returns to the core question, which is whether the proof establishes that the dominant person in the relationship was in a position to exercise undue influence due to the other’s weakness of mind or body, or due to trust, and whether such has been proven by clear and convincing evidence. The question at this point is not necessarily whether the dominant person did or did not exercise dominant influence; rather, the issue is whether he was in a position to do so. If the answer to the inquiry is that there is clear and convincing evidence that the dominant person was indeed in a position to exercise undue influence, the presumption arises, and the burden shifts.

Once the presumption arises, it must be rebutted by clear and convincing evidence. Estate of Pigg v. McClendon, 877 So.2d 406, 411 (Miss. App. 2003).

The proponent then has the burden of going forward with clear and convincing evidence in a three-prong test set out in Mullins v. Ratcliff, 515 So.2d 1183, 1193 (Miss. 1987). The three-prong Mullins test requires the proponent to prove:

  1. good faith on his part;
  2. the grantor’s full knowledge and deliberation of his actions and their consequences; and
  3. that the grantor or testator exhibited independent consent and action.

A will or conveyance is said to be the product of undue influence when an adviser has been so persistent and pressing that the testator’s free will and agency is suppressed.  See, Longtin v. Wilcher, 352 So.2d 808, 811 (Miss. 1977).

In order to determine whether the proponent acted in good faith as provided in the first prong of the Mullins test, the trial court must consider the five factors listed in Estate of Holmes, 961 So.2d 674, 680 (Miss. 2007).  Those factors are:

  1. The identity of the person seeking preparation of the instrument.
  2. The place of execution of the instrument and in whose presence.
  3. What consideration and fee were paid, if any.
  4. By whom paid.
  5. The secrecy or openness given the execution of the instrument.

The second prong of the Mullins test is the grantor’s full knowledge and deliberation of his actions and their consequences. In order to adjudicate this prong, the court must take into consideration the factors set out in Estate of Holmes, supra at 685-686.  Those factors and the court’s findings are as follows:

  1. His awareness of his total assets and their general value.
  2. An understanding by him of those persons who would be the natural inheritors of his bounty under the laws of descent and distribution or under a prior will and how the proposed change would affect that prior will or natural distribution.
  3. Whether non-relative beneficiaries would be excluded or included.
  4. Knowledge of who controls his finances and business, and by what method, and if controlled by the other, how dependent is the grantor/testator on him and how susceptible to his influence.

The third and last prong of the Mullins test is whether the decedent exhibited independent consent and action.  In Dean v. Kavanaugh, 920 So.2d 608, 622 (Miss. App. 1993), the Mississippi Court of Appeals stated that the best way to show independent consent and action is to establish that the testator/grantor had the benefit of advice of a competent person disconnected from the grantee and devoted solely to the testator/grantor’s interests.

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