The Iowa courts may soon follow a recent trend in will dispute precedent law after the Court of Appeals of Tennessee laid down new grounds in which will challengers can establish a presumption of undue influence through evidence of indirect confidential relationships.
Step Children Allegedly Hijack Inheritance[In re Estate of Ida Lucille Land (2019)]
In 1986, ninety-year-old Ms. Land married her husband, who had children from another marriage. Mr. Land died years later with only his siblings and his sister, Pauline Hill, surviving.
Ms. Land required home care services after her husband died of which her niece, Ms. Allen provided until her death. Court records indicated the two women had developed a “strong family-relationship” long before Ms. Land married her husband and that Ms. Allen “unselfishly” spent hours caring for her aunt each day without compensation.
After discovering Ms. Allen’s caregiver overtures, the children intervened and successfully severed the relationship between Ms. Land and her niece by threatening Ms. Allen with trespass if she visited her aunt’s estate again.
Mrs. Land thereafter executed a will that left her entire estate to the children and named Pauline Hill’s husband as executor.
Evidence further revealed the estate planning attorney who drafted and executed Ms. Land’s testamentary documents had a prior relationship with one of the children, and Pauline Hill and the children were all present during the will signing ceremony.
According to Ms. Allen’s testimony, Ms. Land expressly told her “she did not want her husband’s children to inherit her estate after she dies.”
The niece challenged her aunt’s testamentary documents in probate after her death in 1995, claiming both the children and the Hills unduly influenced her aunt while she planned her estate.
Niece Enters Will Dispute Litigation
Chancery Court Judge Jeffrey M. Atherton had instructed the jury to answer three questions during trial:
- Did the challenger’s evidence prove a confidential relationship existed between The Hills and Mrs. Land of which provoked undue influence?
- Did Ms. Allen’s evidence show that The Hills unduly profited from the estate planning documents?
- Did The Hills show by clear and convincing evidence that their takings were fair?
The jury affirmed the first two questions and answered “no” to the third, effectively finding for Ms. Allen and invalidating Ms. Land’s will.
Alleged Influencer Appeals Revocation of Will
The Hills thereafter appealed the lower court’s decision, arguing the trial court erred when affirming an implied confidential relationship existed between the deceased and The Hills after Ms. Land named Mr. Hill as executor.
Mr. Hill further contended the court should not have allowed a presumption of undue influence on him and his wife because neither party received a direct financial benefit from Ms. Land’s will.
Judge D. Michael Swiney of the Court of Appeals of Tennessee affirmed “the finding of a confidential relationship is crucial… in determining the outcome of this case.”
According to the Court, when a confidential relationship follows an inheritance that takes from a testator’s will, “the dominant party” in the relationship must prove by clear and convincing evidence that the conveyance was fair.
Judge Swiney held that while it’s true The Hills received no pecuniary inheritance from Ms. Land’s estate, Mr. Hill was the executor to their niece and nephews (the children) takings.
Court Adds New Precedent to Confidential Relationship Interpretation
“The benefit does not have to go directly to the dominant party,” affirmed Swiney, “so long as the benefit is to the advantage of the dominant party.”
As executors, The Hills would have received an “indirect advantageous benefit” from Ms. Land’s estate, according to the Court, and any ruling contrary “would present a loophole [in the law],” as dominant parties in confidential relationships could effectively escape the presumption of undue influence by simply having weaker parties convey a benefit to the dominants’ family members rather than to the influencers themselves.
The presumption of undue influence therefore applied to The Hills, who failed to prove in the lower court that their niece and nephews’ takings were fair, according to Swiney.
When contrasting rulings from the Court of Appeals of Iowa In Matter of Estate of Charles Kline (2019) with Tennessee’s Land doctrine, one may wonder if the Iowa courts are slowly implementing an indirect confidential relationship test as well.
Brother and Sister Dispute Inter Vivos Gifts Transfer
Before passing away in 2016, Charles Kline made cash inter vivos gifts to his daughter Mary.
During probate, Charles’ son, Tom, claimed his sister unduly influenced their father into preemptively conveying estate assets of which interfered with his inheritance.
Court records show that Charles could not read or write, and at the request of Tom, Mary agreed to manage their father’s financial affairs and pay his bills.
From 2014 to 2016, Mary performed accordingly. Subpoenaed credit card and bank statements however clearly revealed that Mary was intermingling her father’s finances with her personal accounts.
Tom also learned his father transferred $558,000 in bank assets to Mary’s account before he died. Tom consequently inherited only $16,000 in life insurance proceeds during probate despite the provisions in Charles’ testamentary documents leaving his estate to his surviving children in equal shares.
Iowa District Court Holds No Confidential Relationship Existed
The district court rejected Tom’s intentional interference with inheritance claim, holding Tom failed to prove Mary exercised undue influence over Charles via confidential relationship.
On appeal, Judge Greer of the Iowa Court of Appeals quoted Leonard v. Leonard (1944), affirming in order for the Court to set aside the inter vivos transfer, Tom must have proved Mary’s undue influence “overpowered” their father’s free will or prevented Charles from acting “voluntarily.”
Yet, if Tom produced clear and convincing evidence at trial that showed a confidential relationship between Charles and Mary existed at the time of the gift transfer, the lower court should have “presumed the gift fraudulent and… a product of undue influence.”
The burden of proof would have then shifted to Mary to present “clear, convincing, and satisfactory evidence” showing Charles acted “freely, intelligently, and voluntarily” when making the gift and that she “acted in good faith throughout the transaction” to negate the presumption of undue influence. [Mendenhall, 671 N.W.2d at 454]
Court of Appeals Applies Implied Confidential Relationship Tests
Similar to the Tennessee rule, Judge Greer used the “dominating influence test” presented in the Herm (1979) and Oehler (1962) doctrines to determine if Mary carried an implied influence over her father “by reason of the affection, trust, and confidence” while he was in her care.
The Appellate Court further quoted the Iowa Supreme Court, affirming “confidential relationship is a very broad term and is not at all confined to any specific association of the parties to it.”
Judge Greer then held the probate court erred when assuming no confidential relationship existed between Mary and her father because Tom would have taken care of Charles in the same way as Mary did.
The question however was not whether Tom could have performed the same as Mary in managing Charles’s finances, Judge Greer held, instead, the Court should have asked whether Mary held her father’s “trust and confidence” to a degree where “she could have exercised control over Charles’ free will.
According to the Court, the dominating influence test identified in Herm applied to Mary, and Tom had successfully proved during trial that an implied confidential relationship between his sister and their father existed.
Only time will tell us whether the Iowa courts will continue to apply trending implied confidential relationship tests to other undue influence cases on the docket… stay tuned for updates on this and other confidential relationship news in undue influence litigation!