Articles Posted in Probate and Trust Litigation

In a case with potentially significant ramifications for other undue influence cases, the Court of Appeals of Tennessee ruled that, just because the Wife and Husband were married (for 17 years, no less), that fact did not establish a confidential relationship. Establishing a confidential relationship in undue influence cases is absolutely critical. A transaction, transfer, will, or payable on death designation, etc. can only be set aside based on the legal cause of action of undue influence if there was a confidential relationship between the giver and receiver. Thus, no confidential relationship = no chance of winning on an undue influence claim. (It is not necessary to prove a confidential relationship to set aside a will or transaction if the giver lacked the mental capacity to understand what he or she was doing).

While it is necessary, in an undue influence case, to prove a confidential relationship, once it is proven, a huge advantage is gained by the party seeking to set aside the will, transaction, or beneficiary designation: A legal presumption arises that the receiving party did use undue influence to obtain the benefit which he or she obtained. In such a case, the defendant (who received the benefit) can expect a judge in a Tennessee court to instruct the jury that the transaction is presumed to have been the result of undue influence unless the defendant proves otherwise by clear and convincing evidence.

In Tennessee, a variety of relationships can give rise to a confidential relationship. There are virtually no bright-line rules about what facts do or do not establish a confidential relationship. Tennessee courts have broadly segregated confidential relationships into two categories: (1) legal relationships; and (2) family and other relationships. The most prevalent type of legal confidential relationship arises when a party holds a power of attorney, but such a relationship could arise in other contexts.

On July 18, 2013, a jury in Davidson County, Tennessee returned a verdict for a client of the firm who was represented by attorney J. Ross Pepper. The firm’s client was the defendant (“Defendant”) in an undue influence case. The plaintiff (“Plaintiff”) in the case also alleged that the Defendant had breached his fiduciary duties, committed the tort of conversion with respect to certain funds and bank accounts, and exercised undue influence with respect to beneficiary designations made on his sister’s pension, life insurance policies, and IRA.

The case involved the sister (“Sister”) of the Defendant who passed away in September of 2011. The deceased Sister’s niece, the Plaintiff, alleged that the Defendant had used undue influence to procure an amendment to the Sister’s revocable living trust that made him the exclusive beneficiary of the trust. The Plaintiff also alleged that the Defendant should be held liable for breach of fiduciary duty because he made imprudent investments, and used monies of Sister’s trust for purely personal expenses.

The proof at trial showed that Sister had started the living trust in 2004; amended it in 2006 to provide for a more substantial distribution to her brother, Defendant; amended it in 2009 to reduce her brother’s distribution to the same as it was under the 2004 trust; and, then, amended it again for the last time, about 19 months before her death, to make her brother, the Defendant, the sole beneficiary of the trust (except for certain minor specific bequests totaling about $15,000.00). At Sister’s death, the trust assets were worth close to 1 million dollars.

The Supreme Court of Tennessee has issued an opinion clarifying which statutes of limitations are applicable to cases involving the breach of a contract to make mutual wills. If you are involved in a mutual will case, and are worried that your case might be barred by the statute of limitations which is applicable to claims against an estate, T.C.A. §30-2-307, your worries might be over.

In the case at hand, a married couple, both of whom were previously married, and both of whom had children by a previous marriage, signed a contract to make mutual wills. The same day that they signed the contract to make mutual wills, they executed wills. In the contract to make mutual wills, the husband and wife agreed that, when the first of them died, the survivor would not change his or her will.

The wills which the couple executed provided that each would receive a life estate in the real property they owned together or jointly and that, after both had passed away, the real property which they owned jointly or together, as of the time the wills were made, would pass in equal shares to the four children of both of them. (Husband had three children and wife had one, a son).

The Supreme Court of Tennessee has recently issued an opinion in an undue influence and will contest case which speaks to what type of evidence a party can use, at trial, to attempt to set aside a will based on undue influence. In will contest cases, undue influence cases, breach of contract cases, and just about every other kind of case, clients are often surprised about what type of evidence cannot be used at trial to help prove their cases. In analyzing any case, an experienced trial lawyer knows that he or she must consider, not only what facts help prove his or her client’s case, but also, which of those facts might not be admissible at trial.

In trials, only relevant evidence is admissible. What makes evidence relevant? The test for determining relevance, in many instances, becomes very, very subjective. Here is the test under Tennessee law: Does the evidence have any tendency to make the existence of any fact that is of consequence to the determination of the case more probable or less probable than it would be without the evidence? If so, it is relevant.

In the case at hand, In Re Estate of Smallman, the Supreme Court of Tennessee reversed a jury verdict because it determined that the trial court had let the jury hear evidence which was not relevant. What was the offending evidence?

Often in Tennessee, a husband and wife will sign a will in which both leave their property to the surviving spouse. Sometimes, particularly it seems, when the husband and/or wife have children from a previous marriage, will contest cases are brought to determine whether the surviving spouse is bound by terms allegedly agreed to between the surviving spouse and the deceased spouse in a will signed while both were alive.

If you are a beneficiary or relative trying to figure out your rights and/or the rights of other beneficiaries in a joint or mutual will case, a good starting point is to understand some basic Tennessee will terminology. The first determination which should be made to analyze your legal rights and the strength of your case is whether your situation involves joint wills or a joint and mutual will. If the husband and wife signed two separate wills with reciprocal provisions, they would typically be considered joint wills. If the husband and wife executed one will with reciprocal provisions, the will would typically be considered a joint and mutual will.

Where a husband and wife have executed a joint and mutual will wherein they express that the bequests that they have both made are made in consideration for each other, the odds are that the chances of the surviving spouse’s ability to avoid his or her bequest made in that will, by trying to revoke the will after the death of the other spouse or by executing a new will after the death of the other spouse, are not very good. On the other hand, as evidenced by several Tennessee cases, where joint wills (two separate wills with reciprocal provisions) are involved, it is quite possible, depending on the circumstances, that a Tennessee court might well find that the surviving spouse is not bound by will terms to which he or she previously agreed.

The Supreme Court of Tennessee, in a recent case, reversed a decision of the Court of Appeals of Tennessee in which the appeals court had relaxed one of the requirements for a valid will and had upheld the validity of a will which did not strictly comply with a rule laid down by the Tennessee legislature for creating a legally valid Tennessee will. This will contest case resulted in an important decision for Tennessee lawyers who handle will contest cases.

A little historical background about Tennessee will law is helpful. In 1941, the Tennessee General Assembly enacted, in Tennessee, the provisions of the “Execution of Wills Act.” The purpose of the Act was to provide uniform standards for the execution of wills. One of the requirements of the Act, which is codified at T.C.A. §32-1-104, is that a will, other than a holographic will (handwritten) or nuncupative will (unique and very rare), must be signed by the testator (the person making the will).

The facts of the case are pretty simple. The Decedent’s daughter offered a will (the “Will”) for probate. The Will was two pages. The Decedent had initialed the first page of the Will, but had not signed it. Attached to the Will was a separate one page document which was titled “Self-Proved Will Affidavit.” The Decedent and the witnesses all signed the Affidavit. Some nieces and nephews of the Decedent filed a will contest case wherein they alleged that the Will was not valid because the Decedent had not signed the Will.

Rather than executing an entirely new will to change a provision in a will or, in order to make a specific bequest of property, sometimes a person will execute a codicil to an existing will, which, in effect, changes the will. Generally, codicils to wills are enforceable in Tennessee to the same extent as are wills.

In a recent Tennessee case, the testator (the person who made the will) signed a codicil (“Codicil”) to his will (“Will”) about thirty six hours before he died and years after he made the Will. That Codicil became the subject of a dispute between a beneficiary of the Will and the beneficiary named in the Codicil. In the Will, the 100 acre farm owned by the testator was bequeathed entirely to his daughter (“Daughter”). In the Codicil, the testator bequeathed part of his farm to a Mr. Powell, a close friend.

The wording of the Codicil is important to an understanding of the case. In it, the testator bequeathed to Powell a part of his farm of “approximately 35 acres” and described, very generally, the location of that acreage. In the Codicil, the testator also bequeathed to Powell another part of his farm of “approximately 20 acres” and, again, described its location in very general terms. At the very end of the Codicil, the testator stated that approximately 45 acres of his 100 acre farm, which remained after the bequests to Powell, were to be distributed to Daughter.

In what might be described as a “battle of the caretakers” undue influence and will contest case, the Tennessee Court of Appeals decided in favor of the proponents (and beneficiaries) of the will, and against the relatives who claimed that the will was the result of undue influence. What makes the case unique is that the undue influence was allegedly exerted, not by the beneficiaries of the will at issue, but by caretakers who did not benefit one bit from the will.

The case was brought by a Nephew of the Deceased (who made the will), and the Nephew’s Wife. To summarize their claim, the Nephew and his Wife alleged that caretakers for the Decedent so poisoned the Decedent’s relationship with them that the Decedent changed his will.

Here are more facts of the case: