How Confidential Relationships Can Squash Estate Plans

Dispute litigation happens when people unethically pressure the vulnerable into drafting or modifying their estate plans.  

You may have a reason to suspect “foul play” when you fail to receive an expected inheritance from an aging family member.

Sometimes, an entity or individual caring for an elderly or ill relative may use its/his/her dominant (apparent) authority over the recipient to influence or defraud the vulnerable family member into leaving them estate assets—effectively reducing or eliminating your future inheritance.

According to the law, care recipients enter into an implied “confidential relationship” with their care providers as soon as the caregiver agrees to make economic or financial decisions for the recipient or look after the person’s daily personal needs.

Iowa estate law mutually imposes strict legal obligations on a dominant party in a confidential relationship, duties that compel the provider to always act in the recipient’s best interests and to steer clear from what the law would consider “undue influence” over the vulnerable party.

Example: Let’s say your brother agrees to take care of your sick mother, who requires constant care. The courts may thereafter infer your brother was in a confidential relationship with mom, especially if after your mother’s passing, her Will names your brother as the sole beneficiary of her estate.

Let’s examine how confidential relationships operate in estate dispute litigation and consider how the association between parties in such a relationship can invalidate a Trust or a Will in probate.

Confidential Relationships and Undue Influence

The Iowa courts have the authority to quash a Will or Trust when it finds the testamentary document in contention does not express the executor’s intent.

Undue influence arises when one party in a fiduciary or confidential relationship takes an unfair advantage of the weaker party’s mind and forces him/her into doing something they would not have normally done.

Such influence usually takes place in a relationship between an elderly relative and a caretaker or close family member

Influencers hide their wrongful behavior from other people effectively, and because of this, litigants who bring Will or Trust contests can seldom prove undue influence through direct evidence.

How to Prove Undue Influence Indirectly

In order to succeed in undue influence litigation, you must rely on circumstantial evidence to show how the defendant coerced the decedent into gifting him/her estate property or assets.

Types of indirect evidence for proving a person in a confidential relationship influenced the deceased include:

  • Unexpected Descendant Disinheritance. The Iowa courts have repeatedly held that cutting off children from the natural objects of a parent’s bounty is an unnatural act that can indicate undue influence took place.
  • Contradicting Testamentary Documents. When the terms found in two different Wills or Trusts vastly contradict each other, the courts may infer the intent found in the latter document was a product of undue influence.
  • Participation in Estate Planning. A jury may hold that a fiduciary or caregiver controlled a care recipient’s testamentary intent if he/she actively assisted the deceased in drafting or modifying his/her estate plans.
  • Mental and Physical Incapacity. The Iowa Supreme Court has affirmed that care recipients who possess weakened mental and physical competencies are susceptible to “free will corruption” by their caregivers.
  • Sudden Negative Sentiment or Displacement. When the fact finders cannot identify another rational explanation, a court may infer that “a poisoning of the mind,” stemming from a dominant party’s influence in a confidential relationship, may prompt a care recipient to have a sudden unfavorable opinion towards an estate beneficiary, according to Iowa probate and Trust law.

Example: An aging Uncle John has three heirs: David, Mary and George. Mary agrees to take care of John, who depends on her for his everyday living needs. Mary hates her cousins David and George, and two months before Uncle John passes away, Mary drives John to his estate planning attorney’s office to alter his Will. During probate, David and George discover their uncle disinherited them and that Mary stands to take all from his estate.

How can David and George prove Mary engaged in undue influence through indirect evidence?

  • Mary participated in John’s estate plan modification by driving him to his attorney’s office.
  • Uncle John had an unexplained sudden resentment towards David and George before dying.
  • Before altering his will, Uncle John’s physical health had deteriorated to an extent where he needed a caretaker.

Once David and George show these circumstances, the courts will presume that Mary coerced John into altering his estate plan, and it will compel Mary to prove that undue influence did not occur—not an easy task to do!

Shifting the Burden to Defendants in Confidential Relationships

A Will or Trust dispute plaintiff bears the burden of proving by a preponderance of the evidence that a wrongdoing took place.

You may however shift this heavy burden onto a defendant fiduciary or a caregiver if you can show:

  • The defendant and the deceased were in a confidential relationship;
  • The defendant actively participated in drafting or modifying the deceased’s testamentary documents; and,
  • The defendant unduly profited from the defendant’s Will or Trust.

Once this burden shifts, the defendant would then have to prove by clear and convincing evidence (a higher standard) that he/she did not influence the deceased into gifting estate assets and that the decedent made the gift through his/her own free will.

Confidential Relationships and Fraud

Fraud exists when a grantor or testator executes, changes, or revokes his/her estate plans after someone intentionally misrepresents a material fact to him/her, hoping to benefit from the deceit.

Duress is also a fraud variant—arising when a person in a confidential relationship threatens violence or detrimental consequences on a care recipient unless he/she complies with the aggressor’s wishes.

Beneficiaries often discover fraudulent activity only after the deceased’s Will or Trust springs into action, or rather, many years after the fraudulent activity took place.

Bringing probate fraud litigation against a dominant party who was in a confident relationship with a deceased relative would require you to prove:

  • The care recipient relied on the defendant’s deceit.
  • The fraudster intentionally misled or intimidated the care recipient.
  • The deceitful act caused an actual and proximate harm to your intended inheritance.

Gifting to Care Providers in Confidential Relationships

Care recipients sometimes gift estate property to their care providers before and after their death. Although gifting is occasionally appropriate, whether the law would deem such a donation proper among parties in a confidential relationship would depend on the evidence surrounding the conveyance.

Iowa Probate Code engages inter vivos gifting differently than testamentary gift conveyances for beneficiaries in confidential relationships with the deceased.

Once a plaintiff successfully proves a confidential relationship exists, the evidence raises a presumption that an inter vivos gift (an estate asset conveyance during the donor’s life) is a product of undue influence, according to the Code.

A heavy burden of proof then moves to the defendant to show the deceased transferred the inter vivos gift to him/her willingly and without persuasion or coercion.

Testamentary gifting (an estate asset conveyance after the donor’s death) is however different, according to the law.

The fact that the beneficiary was in a confidential relationship with the testator is just one event (among many) that may or may not raise a presumption of undue influence—the burden of proof therefore would not shift to the defendant automatically.

Simply Put …

Iowa Code states individuals or entities in confidential relationships with the elderly or ill take advantage of their superior positions when they actively and successfully seek assets from the recipient’s estate.

The Iowa courts accordingly hold the power to null improper gifting to fiduciaries and caregivers when interested parties present indirect evidence showing either undue influence or fraud had taken place.

Once presumed guilty of wrongdoing, the defendants who participated in a confidential relationship with the deceased will assume a heavy burden to prove the donor gifted assets to them freely and without coercion.

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