How a Confidential Relationship Relates to Estate Litigation
Posted by Martin Heller Potempa & Sheppard, PLLC on November 15, 2019
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Undue influence. It’s a term you hear tossed around quite a bit when it comes to contesting a will. In order to make a claim of undue influence, there’s often a claim that a beneficiary had a confidential relationship with the decedent. While the words seem descriptive enough on their own, it’s critical to understand what constitutes a confidential relationship.
The legal dictionary defines a confidential relationship from a few perspectives. One doesn’t have to have a familial bond to engage in a confidential relationship. In some cases, a nurse or other type of caretaker could influence someone to trust them. The key factors as the issue relates to estate litigation deals with reliance and dominance.
In a case filed with the Court of Appeals earlier this year, two brothers contested an amendment their father made to his trust agreement. They claimed that their sisters’ confidential relationship with the decedent created a situation of undue influence.
Brothers Claimed Sisters Had Confidential Relationship with Dad
The Court of Appeals of Tennessee at Knoxville decided Messerli v. Williams on September 18, 2019. The case deals with the trust agreement executed by the late Roy A. Messerli. According to the case history, all of the parties are the decedent’s children. Roy was a widower when he signed updated estate planning documents on January 10, 2008.
As far as the beneficiaries to the estate, Roy named as his children: Douglas A. Messerli, Billy Steven Messerli, Beverly K. Blakeman, Vickie Sue Williams (“Defendant Williams”), Lisa Doreen Edquist, and Charles Messerli. With the exception of Charles, the children are all from Roy’s second marriage.
The court’s opinion outlines who Roy appointed as his personal representative and trustees for his will. For purposes of brevity, it starts with Williams as the Personal Representative of Roy’s will with Blakeman as the successor. Roy further named defendant Williams, Blakeman, and Logan Williams as Co-Trustees of the 2008 Trust.
A couple of years after execution of the 2008 Trust, Roy executed an amendment to the 2008 Trust, which is referred to as the 2010 Amendment in the appeal.
Notably, the case history states that Roy received a lung cancer diagnosis in 2011. He subsequently died on December 3, 2012. All of Roy’s children survived him.
Two Brothers Contested Validity of the Trust Amendment
As indicated, Roy left behind three sons. Two of them contested the validity of the trust amendment. In short, Douglas A. Messerli and Charles Messerli felt the combination of their father’s “diminished physical and mental capacity and Defendants’ confidential relationship with Father “raise[d] a presumption that the purported 2010 Amendment was the product of duress and undue influence.”
The brothers alleged that their sister Beverly acted as their father’s primary caretaker. As far as they were concerned, this created a confidential relationship between the two. However, they took it a step further. Douglas and Charles also claimed that Vickie Sue took it upon herself to privately meet with their father’s attorney and insisted on changes that resulted in the 2010 Amendment.
When the trial court ruled on the challenge to the Amendment, the judge found that the medical records failed to substantiate that Roy lacked mental capacity. At a later date, the court ruled on the brothers’ claim that Vickie Sue had a confidential relationship with her father by virtue of her appointment as attorney-in-fact. Since she never exercised that appointment, the court decided the allegations were unfounded.
Nonetheless, the trial court did feel there were genuine issues concerning whether or not Beverly exercised dominion and control over their father that rose to the level of a confidential relationship. The two brothers claimed their sister took advantage of their father’s age and failing health. Additionally, they claimed that her personal finance issues led to her unduly influencing the changes to the trust.
At the conclusion of the trial, the court decided” it did not believe that reasonable minds could differ on whether the burden of proving the confidential relationship had been met.”
On Appeal – Estate Litigation
The brothers disagreed with the trial court’s decision and appealed the matter. Upon review, the Court of Appeals agreed with the lower court.
In the first place, the courts have discussed the relationship between parents and adult children in other legal matters. A 1977 case states “Unless it can be proven that the free agency of the parent or adult-child was destroyed, either by way of physical or mental deterioration, or through fraud or duress, the relationship is assumed not to be confidential in nature.”
Despite the brothers’ assertions that their father was of advanced age and declining health, there were no signs that he was susceptible to influence. In fact, the medical records didn’t suggest that Beverly needed to be there to take care of their father. Instead, she did so of her own accord.
What about the fact that Beverly took charge of their father’s finances during his lifetime? The brothers specifically referenced a $20,000 wire to Logan Williams. This amount was subsequently paid back and appeared to be a loan.
Douglas and Charles claimed that the 2010 Amendment directly conflicted with the intentions of the 2008 Trust. Apparently, that Trust included a statement that he loved all of his children equally.
From all appearances, the 2010 Amendment seemed “unnatural or unfair” to the brothers. However, the court ruled that didn’t mean their father was incompetent or was unduly influenced by their sister when he made the changes. Accordingly, the Court of Appeals agreed with the lower court.