In Re Benedetti Estate and Trust is a recent unpublished opinion from the Court of Appeals, so take it for what it’s worth. (Click on the case name to read the case.)
The opinion offers an extensive discussion of a key issue in will and trust litigation, specifically the nature of the relationship that must exist to give rise to a “fiduciary relationship” sufficient to meet the requirements for a presumption of undue influence.
Background: Most contests of this type involve the allegation that the contested document was a product of undue influence. The standard of proving undue influence is very high. One way to overcome that burden (or at least, overcome summary disposition on the issue of undue influence) is to establish three elements that give rise to a presumption of undue influence. Those elements are: (1) That there was a fiduciary relationship between the person who executed the document and the person who is alleged to have exercised undue influence; (2) That the person alleged to have exercised undue influence had an opportunity to do so, and (3) That the person alleged to have exercised undue influence benefited from the document.
This case discusses the first element.
It has been held that the existence of a formal agency (i.e., power of attorney appointing the person alleged to have exercised undue influence) is sufficient to establish a fiduciary relationship. However, the Courts have held that such formality is not necessary and that a fiduciary relationship may exist whenever the person creating the document was in a relationship in which s/he put their trust in the person alleged to have exercised undue influence.
In this case the evidence of a formal fiduciary relationship (power of attorney) was imperfect. However, it appears to be acknowledged that the person alleged to have exercised undue influence did in fact help the person who created the trust and will with his finances, paying bills and other such activities. The trial court held that notwithstanding these activities, the party challenging the documents failed to establish the existence of a fiduciary relationship sufficient to give rise to the presumption. The reasoning hinges on the finding that although the one person was helping the other person with their finances, the person who created the will and trust did not rely on the judgement of the purported undue influencer – that is, they continued to exercise their own independent judgment as to these affairs and the role of the assisting party was more or less ministerial. This is significant. If this is the law, it weakens cases in which these facts are relied upon as a basis for the presumption.
In will and trust litigation, the importance of the presumption of undue influence can hardly be overstated. It is raised in a high percentage of such cases. The presumption is a finding of the court, even in cases that go to the jury. That means a failure to establish the presumption will often result in summary disposition, as was the result in this case. The value of such cases (from the perspective of the contesting party) increases dramatically when it is clear that the case will be decided by a jury. As such, for lawyers handling these types of cases, this case is worth saving as it provides a roadmap when defending documents in which no formal power of attorney exists, the contesting party seeks to impose the presumption, and the question of whether or not the element of a fiduciary relationship has been met is in play.