Saying that there has been “undue influence” is often used as a reason to contest a will or estate plan, but what exactly is undue influence? Is it only valid after a loved one has died, or can a claim of undue influence be raised while the person is still living?
Undue influence occurs when someone exerts pressure on an individual, causing that individual to act contrary to his or her wishes and to the benefit of the influencer or the influencer’s friends. The pressure can take the form of deception, harassment, threats, or isolation. Often, the influencer will try to coerce the individual into acting out the influencer’s wishes by cutting them off from loved ones. Because of this isolation component, the elderly and sick are usually more susceptible to undue influence.
To prove a loved one was subject to undue influence in drafting an estate plan, you have to show that the loved one disposed of his or her property in a way that was unexpected under the circumstances, that he or she is susceptible to undue influence (because of illness, age, frailty, or a special relationship with the influencer), and that the person who exerted the influence had the opportunity to do so. Generally, the burden of proving undue influence is on the person asserting undue influence, but if the alleged influencer had a fiduciary relationship with your loved one, the burden of proof may be on the influencer. People who have a fiduciary relationship can include a child, a spouse, or an agent under a power of attorney.
When drawing up a will or estate plan, it is important to avoid even the appearance of undue influence. To avoid the appearance of undue influence, avoid involving beneficiaries in the drafting of the estate plan. Family members should not be present when you discuss the will with your attorney or when you sign it. To be totally safe, family members shouldn’t even drive or accompany you to the attorney’s office. You can also get a formal assessment of your mental capabilities done by a medical professional before you draft estate planning documents to ensure there is no doubt about your state of mind at the time of signing.
There can also be issues of undue influence when you are still living as well. In Steere v. Steere (Mass. Sup. Ct., Dukes CA 2018-44, December 16, 2020), a Superior Court judge found that a nephew and his wife used undue influence to defraud his 88-year-old aunt from her house in Oak Bluffs on Martha’s Vineyard.
Gloria Steere, former Accountant at an insurance company, became the victim of scammers and lost her life savings. She subsequently took out a reverse mortgage and continued to send money to scammers. Since she was again short on funds, Gloria decided to put her house on the market. At a family function in 2016, her nephew, Lyle Steere, and his wife, Aurlelie Cordier-Steere, suggested that they might be able to help Gloria and allow her to continue to live in her home.
Lyle sent an email offering Gloria $500,000 for the house with the conditions that she would live there, but he and his wife would own the house and pay for all of the taxes and insurance on the property and any big-ticket items as needed, such as roof replacement, plumbing, etc. Gloria would be responsible for all the monthly expenses (i.e cable, phone, electric and heating oil). At the end of the email, Lyle added, “We will also need to put in some conditions related to health matters while you are living there that we can discuss as part of the process.”
Lyle also wrote Gloria in an email asking her to keep this matter private. He also suggested that they use the same lawyer. An appraisal conducted found the property to have a market value of $1.4 million at the time. The $500,000 they paid for the house left Gloria with virtually no money after paying off the reverse mortgage and other outstanding bills.
After the sale, Lyle and Aurelie, who lived in Boston, started using the house on weekends and began renovating it, to Gloria’s dismay. Disagreements about how to decorate and maintain the property started, and Lyle and Aurelie began to look for an elderly housing placement for Gloria. Eventually, another nephew of Gloria, Jesse Steere, who lives on Martha’s Vineyard, became involved, and Gloria’s situation became a family dispute that continued to escalate.
Lyle and Aurelie then brought an eviction action against Gloria, and later that month, Jesse was appointed as Gloria’s conservator. On her behalf, he brought a claim against Lyle and Aurelie for undue influence, fraud, and intentional infliction of emotional distress, and asked that the sale of the house to Lyle and Aurelie be reversed.
The judge found that Gloria met her burden of proving all the elements of undue influence. He rejected Lyle and Aurelie’s argument that they paid fair market value for the property since Gloria had the right to live there “as long as her health permitted.” Not only did they not live up to this commitment, by making it they “promised something [Gloria] needed very badly, the right to stay in her home for the rest of her life.”
Further, the background of Gloria giving her life savings and then her reverse mortgage proceeds away to scammers shows she was susceptible to undue influence. Part of Lyle and Aurelie’s scheme was to keep the transaction secret from other members of Gloria’s family and to suggest she not obtain independent counsel.” In so doing, they isolated Gloria from independent and uninterested advice.
Ultimately, Judge Wilson found in Gloria’s favor on all claims, ordered damages for intentional infliction of emotional distress in the amount of $100,000 and directed that the sale to Lyle and Aurelie be rescinded.
This case goes to show the importance of avoiding undue influence. If you do want to enter into a legitimate arrangement through which you assist a senior by purchasing their home, but giving them the right to live there for the rest of her life, do so transparently. Let the family know. Make sure they are represented by separate counsel. Put the arrangement in writing.
Even former accounting executives, like Gloria, can be subject to scams as they age. This is a reason everyone should consider putting their assets into revocable trusts and naming someone they trust or an institution as a co-trustee. Gloria would never have become subject to Lyle and Aurelie’s designs if she had not first lost her life savings to scammers. The cost of having an independent co-trustee, such as a bank, trust company, or attorney, often deters people from using them. But it is worth it when compared to the potential cost of scammers.