Probate and estate administration can be difficult to settle when there are claims or challenges involved. In a May 26, 2017 case, the Court of Appeals of Tennessee reviewed a claim against the decedent’s attorney-in-fact, which alleged undue influence arising from a confidential relationship. The decedent’s survivors, two nieces, and one nephew, filed the complaint against the attorney-in-fact, who was the decedent’s other nephew. Following a bench trial, the lower court dismissed the complaint, finding that although a presumption of undue influence had been raised by a confidential relationship between the defendant and the decedent, the defendant had successfully rebutted the presumption. The plaintiffs brought an appeal.
To prove undue influence, the plaintiffs generally must prove the existence of suspicious circumstances warranting the conclusion that the decedent did not act freely and independently. Examples of such suspicious circumstances may include the existence of a confidential relationship between the decedent and the defendant, the decedent’s physical or mental deterioration, the defendant’s active involvement in procuring the will, secrecy concerning the will or the lack of independent advice, the unjust or unnatural nature of the will’s terms, fraud or duress, or any other circumstances that establish undue influence. Under Tennessee law, there is a presumption of undue influence when the dominant party in a confidential relationship, i.e., the defendant, receives a benefit from the decedent. Once a presumption of undue influence arises, the defendant must establish that the transaction at issue was fair by clear and convincing evidence to rebut the presumption.
The case centered around the defendant’s role in changing bank accounts and certificates of deposit that were originally opened by the decedent. At the time of the decedent’s death in January 2012, two checking accounts and two certificates of deposit accounts were designated as payable on death to the defendant, which comprised the majority of the decedent’s wealth. The plaintiffs in the case asserted that the decedent’s true wishes were reflected in his 2010 will, which provided 25% of his estate to his sister, with the remaining 75% to be equally divided among his surviving nieces and nephews. They argued that the will demonstrated that it was not the decedent’s true intent to pass funds in his financial accounts to the defendant outside the parameters of the estate.
The appeals court explained that the issue was not whether the transactions were fair to the plaintiffs, but whether the transactions fairly represented the decedent’s free and independent will. The court noted that the record contained no indication that the defendant ever isolated the decedent from other family members or insisted on being present when others visited the decedent. Furthermore, the decedent had sought legal advice from his attorney and updated his will and powers of attorney with his attorney’s assistance. The court also pointed to the decedent’s longstanding relationship with the employees of the bank holding his accounts, who opined that the decedent was aware of his financial affairs and competent to make decisions concerning his assets, as well as the testimony of the plaintiffs, who had never witnessed signs of the decedent’s mental impairment or dependence beyond his need for physical assistance. Accordingly, the appeals court agreed that the defendant had successfully rebutted the presumption of undue influence, and it affirmed the lower court’s decision.
The estate planning lawyers at Martin Heller Potempa & Sheppard can advise Nashville residents and others in matters concerning probate administration, trusts, and the distribution of their property after their death. If you would like to learn more from one of our knowledgeable attorneys, contact our office by phone at (615) 800-7096 or online and schedule your consultation.