Presenting a live 90-minute webinar with interactive Q&A Trust and Probate Challenges: Minimizing and Litigating Claims of Undue Influence, Fraud, Capacity and Mistakes Overcoming Evidentiary Hurdles with Medical Records, Documentation, Experts and Other Witnesses THURSDAY, JANUARY 16, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: James A. Bush, Of Counsel, Van Dyke & Associates , San Diego Anthony R. La Ratta, Partner, Archer & Greiner , Haddonfield, N.J. J. Brian Thomas, Attorney, Burdette & Rice , Dallas The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Minimizing and Litigating Claims of Undue Influence, Fraud, Capacity, and Mistakes
Topics To Be Covered Substantive Bases for Will and Trust Document Litigation – James A. Bush, Esq. Evidentiary Challenges – Brian Thomas, Esq. Planning Techniques to Prevent or Mitigate Evidentiary and Proof Issues – Anthony R. La Ratta, Esq. Questions – Panel 6
Substantive Bases for Will and Trust Document Litigation James A. Bush Van Dyke & Associates 501 W. Broadway Avenue, Suite 1600 San Diego, CA 92101 (619) 344-0977 jbush@vdalaw.com 7
Challenges Based on Incapacity A person over the age of majority is presumed to have capacity to make a will or a trust; any contestant has the burden of proving otherwise. Capacity is determined as of the date the document is executed, although proof of incompetency before or after may be offered if probative of capacity on the date of execution. 8
Challenges Based on Incapacity Capacity to make a will or a revocable trust means the ability to: Understand the nature of the act Understand and recall the nature and situation of the subject property Know and understand tranferor’s relationship to the natural objects of the tranferor’s bounty and of other persons affected by the document. 9
Challenges Based on Incapacity Incapacity based on insanity, hallucination, or delusion Except where condition is so pervasive as to constitute mental incompetency generally, it does not void a will or trust unless it causes transferor to distribute property in a way he or she would not have done but for condition Being the subject of a guardianship or conservatorship does not conclusively establish incapacity If condition is such that transferor has lucid periods, it is rebuttably presumed that instrument was executed during a lucid period 10
Challenges Based on Incapacity Generally speaking, most conditions that might lead a person to lack capacity are only some evidence of incapacity and are not conclusive. The terms of the testamentary document itself may be considered in determining incapacity. A document that gives away property in an unusual or unnatural way and which does so without any explanation may tend to show incapacity at the time it was executed 11
Challenges Based on Undue Influence Undue influence means influence that overrides the transferor’s free will at the time the document is executed Influence must be undue; anyone may solicit a transfer The exercise of influence alone is not sufficient; it must result in the challenged transfer 12
Challenges Based on Undue Influence Undue influence does not require proof of a weakened mental state, but proof of such a state may make it more likely that tranferor’s act was the result of undue influence rather than transferor’s free will 13
Challenges Based on Undue Influence Burden usually is on contestant to show undue influence Burden to show transfer was not the result of undue influence shifts to transferee where: There was a confidential relationship between the transferor and transferee The transferee actively procured the execution of the contested document The transferee unduly profits by the document 14
Challenges Based on Undue Influence Confidential Relationships Question of fact Relationship exists where transferor places trust and confidence in the integrity and fidelity of the transferee Some relationships may raise a presumption of undue influence by law of relevant jurisdiction Drafting attorney Care custodian of transferor Attesting witness 15
Challenges Based on Undue Influence Transferee’s participation in procuring document Although all of these may be some evidence of active participation, none of the following alone conclusively establishes active participation: Transferee procures drafting attorney Transferee brings transferor to attorney Transferee sits in waiting room while transferor consults attorney Transferee is present during physical execution of document Transferee urges transferor to make a testamentary document without urging a particular transfer 16
Challenges Based on Undue Influence Undue Profit Usually a question of fact focused on the relationship among all the parties, and circumstances that may be considered include: Prior versions of estate plan Past expressions of transferor’s testamentary intentions Extent to which parties would benefit absent the challenged document Not undue to provide for one who has a particularly close relationship with transferor or is in need of greater financial assistance 17
Challenges Based on Undue Influence Recent Development: California recently enumerated these relevant circumstances, all of which must be considered and which “supplement” common law: Transferor’s vulnerability, including mental state, age, isolation, and dependency Influencer’s apparent authority over transferor Influencer’s conduct, including control over transferor’s day-to-day life Equity of challenged result Outside California, considering these factors can only strengthen effectiveness of testamentary document 18
Challenges Based on Fraud Similar to undue influence Key difference: Fraud exists even where transferors exercise free will but do something they would not have done but for deceit of challenged transferee Fraud also requires proof that challenged transferee intended to deceive the transferor or intended to induce the transferor to execute the challenged document and that fraud was effective at the time the document was executed 19
Challenges Based on Mistake Where transferor by mistake signs wrong document or signs a document with terms materially different from what he or she believed it contained, document can be set aside Otherwise, mistakes that require reformation without creating new terms may be cured under court’s equitable powers Mistakes resulting in omission of a transfer may not be cured through reformation as they would result in making a new will or trust (still good law?) 20
Effect of Upholding Challenge If provision subject to undue influence or fraud can be severed without subverting transferor’s intent, challenged provisions may be stricken Otherwise, estate plan reverts to most recent documents that were not the result of incapacity, undue influence, fraud, or mistake or, if there are no such documents, to distribution through intestate succession 21
Trust and Probate Challenges: Minimizing and Litigating Claims of Undue Influence, Fraud, Capacity and Mistakes
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