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Guarding against charges of undue influence in estate planning

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When elderly clients begins making radical changes to their estate plan, most planners begin wondering whether they’re truly making those decisions on their own, or whether they’re the victim of undue influence.

Undue influence has been defined as “the use of improper constraint, urging or persuasion to induce a decedent to dispose of her property in a manner that she would not have done if left to act freely,” which can be very hard to detect. Who can tell if a client is really acting freely or not?

That’s one reason it’s important to watch for cases of undue influence as they wend through the courts. Last month, a ruling in a New York case indicated existing parameters for what can constitute undue influence — and it’s good news for people trying to keep their elderly parents or their clients from being a victim of undue influence.

Lewis Wechsler had filed four similar wills leaving the bulk of his estate to the children of his first marriage, as well as some to his second wife, to whom he was married 32 years. Nevertheless, the second wife told the executor of Wechsler’s estate that his will would not need to go through probate because all his assets had already been transferred to her. The court noted transactions made by Wechsler within six months prior to his death that essentially liquidated his estate.

The children claimed undue influence and a surrogate judge agreed to take on the case, which is not common in these instances. What caused the judge to do that? The existence of the prior wills, all of which included Wechsler’s children, probably wouldn’t have been enough, but there were other pieces of evidence.

A court’s invalidation of a will based on undue influence requires several essential elements. First, the influence must be so overpowering that the decedent would have been unable to make a free decision alone.

Advising a client on how to dispose of an estate does not count as undue influence; the complainant must show that the client wasn’t capable of resisting the changes.

Also, the person who is accused of undue influence must be the one benefiting from the will or estate plan in question. And it must be demonstrated that the client acted contrary to how he or she would have without the alleged influence.

Wechsler’s attorney testified that the decedent’s sister and niece had called him to try to convince him to draft a new will leaving the bulk of his estate to the second Mrs. Wechsler. Both of these women are psychiatrists, which may have been why Wechsler’s widow enlisted their help.

The children and the attorney were able to raise the question of whether the two women used their professional skills to influence Wechsler to transfer his assets to his wife when he was hospitalized prior to his death. The nurses at the hospital were even enlisted to testify as to the state of Wechsler’s mental state at the time.

The fact that the assets were transferred out of the estate shortly before Wechsler’s death was also a key factor. Since Wechsler’s mental state had already begun deteriorating, that further called into question his motives.

But that brings up an important question: What about elderly clients who appear to genuinely want to make significant estate decisions? For example, if an elderly person makes a in-home nurse the beneficiary of a will, a court will generally declare the will void. But what if the client genuinely loves the in-home nurse and wants to provide for him or her? 

If clients don’t want a judge to someday overrule those decisions based on charges of undue influence, they should take steps to make clear that, yes, they reached these conclusions on their own; and they want the designated beneficiaries to be part of their estate plan. That means making the decisions clear and understandable to all parties concerned, including the client’s attorney, heirs and the estate planner.

If previous heirs are to be removed from the will, they should be notified — preferably in person, but certainly in writing. A video can work well if the client is physically incapacitated. These steps will also help ensure that the planner is shielded from litigation by disgruntled former heirs.

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