Tennessee Business Litigation Lawyers Blog
If you are bringing or defending an undue influence case in Tennessee, including a will contest based on undue influence, the presence of a power of attorney may be a game changer for your case. Why would a power of attorney matter so much in such a case? Because a power of attorney alone may establish what the law refers to as a “confidential relationship.”
Once it is established that the person who benefitted from the will or other transfer or transaction had a confidential relationship with the maker of the will or transferor of the property, a huge shift takes place — the person who benefitted is presumed to have received the benefit because of undue influence and that person may overcome that presumption only by proving to the jury, by clear and convincing evidence no less, that the making of the will, the transfer, or the transaction was not the result of undue influence.
In Tennessee, if the person who benefitted from the will, the transfer or the transaction was granted an unrestricted power of attorney by the maker of the will or transferor, that fact alone will establish a confidential relationship between the two with one condition. That one condition is that, before the making of the will or the transfer, the person who was granted the power of attorney must have actually used it.
When I take on an undue influence case, besides taking the necessary discovery to determine if a power of attorney was executed, if I find that one was in place, I request bank records from all relevant accounts to determine whether the person who held the power of attorney used it to write checks. I will also request records of medical care providers to determine if the power of attorney was used. In my experience, the two most common ways a power of attorney is used in undue influence cases is for signing checks and with medical care providers. (There are certainly other ways one might be used such as to transfer property or to make a contract.)
In Tennessee, our courts have said that an “unrestricted” power of attorney is necessary to create the presumption of undue influence. Unfortunately, they have not given us much guidance on what they mean by an “unrestricted” power of attorney. One court, in the case of Parish v. Kemp (Tenn. Ct. App. 2005), held that a power of attorney restricting the holder of the power of attorney from “changing the ownership status of any property” is still an unrestricted power of attorney for purposes of undue influence cases.
Besides powers of attorney executed for very limited purposes, such as, for example, powers of attorney given to car dealers to transfer titles, it is hard to imagine many powers of attorney that would be considered “restricted” for purposes of determining whether a confidential relationship existed in an undue influence case.
Lawyers who handle will contests and undue influence cases should always be on the lookout for powers of attorney, and should formulate discovery to determine whether, if a power of attorney was in place, it was used.