In re Robert James Malette Revocable Living Trust: Understanding Undue Influence and Capacity in Estate Planning

Introduction:

One of the benefits of many estate plans is the ability of the grantor, settlor, or testator to amend their wishes during their lifetime. Families, relationships, and lives change, and this impacts a person’s ultimate goals. But when estate plans are changed due to another’s influence or when the grantor lacks the mental fitness to make those changes, problems and challenges can arise.

These very ideas were the subject of an interesting, recent Michigan probate case. The case provides valuable insight about capacity and undue influence in an estate planning context.

Facts:

A 92-year-old veteran made gifts during his lifetime to his wife, his stepson, and his church. This, the court said, was consistent with his habit of giving to good causes throughout his life. He also amended his trust to leave substantial gifts to a church and health camp.

After his death, his son challenged the trust amendment and the lifetime gifts. These challenges were made on two grounds. First, he argued that his father was unduly influenced by his wife, whom he only married shortly before his death. That being said, the couple had known each other since 1983, and she had cared for her husband during the later parts of his life.

Secondly, the son argued his father lacked capacity due to dementia. His father had been living in a veteran's home and had been diagnosed with small-vessel disease, which can cause dementia. However, his doctors and caretakers did not report significant cognitive issues around the time of the amendment or gifts.

Rules and Analysis:

The court applied the long-standing rule that the intent of grantor should be the guiding and determinative principle. It ultimately concluded that the veteran’s intention was to make the lifetime and testamentary gifts in question. They predicated this conclusion on circumstance and testimony.

Next, as to undue influence, the court noted that there is a presumption that undue influence exists where a person of trust has an opportunity to influence the grantor and that person of influence benefits from a transaction. Of import is the notion that this presumption is rebuttable. The person challenging the estate planning change or gift must still prove that the free will of the grantor was overpowered.

Again, the court found that the veteran wanted to make the lifetime and testamentary gifts in question. And even though his wife was in a position of trust, the son did not make an adequate showing that his father’s will was overcome. Thus, no undue influence was present.

Capacity, finally, must exist at the time that the grantor executes their estate planning instrument or when they give a gift during their lifetime. This means that even though a person is undergoing some form of mental decline, they can still make a lifetime or testamentary gift if they can appreciate the nature and effects of their actions at the time the gift was made, or the estate planning document was executed.

Even though the veteran’s mental health may have been undergoing changes, the court found that he was alert and capable when he made changes to his trust. At the most important time, when he made the gifts and amendment, he had capacity.

Conclusion:

Of course, the court will do its best to ascertain your intent if a challenge ever arises. However, it is far preferable to never have a will, trust, or other transfer challenged in the first place. To avoid an argument of undue influence or a lack of capacity, it is best to consult with an attorney. They can help navigate the nuances of estate planning, gifts, undue influence, and capacity. Most importantly, an attorney, as someone looking out for you and you alone, will attempt to act in your best interest to give effect to your intent and goals.

For more information or for assistance, please contact us. We would be happy to help you accomplish your estate planning goals.

Disclaimer:

This case summary is based on an unpublished opinion. Unpublished opinions are not binding precedent and are generally not cited as authority in Michigan courts. However, they can provide insight into how courts might approach similar issues. The case may be subject to appeal.

This publication is for general information only. The information contained is not intended as formal legal advice. If you have any questions or need assistance, please contact your attorney at Curtis, Curtis & Brelinski, P.C.

Article by: Ethan J. Loch