Bar News - March 16, 2016
Elder, Estate Planning & Probate Law: Quantum of Proof in Undue Influence Cases
By: David Eby and Jonathan Eck
In two recent cases tried before the NH Circuit Court Probate Division’s Trust Docket, the court set aside estate planning documents of two elderly women on grounds that the women were unduly influenced by individuals in a fiduciary relationship.
The court carefully recited the somewhat complex New Hampshire law on undue influence and the burden of proof in such cases. What still remains less than clear, however, is the quantum of proof needed in these matters. Given the difficulty in establishing undue influence – a finding that most often includes conflicting evidence where circumstances are shrouded in uncertainty – the burden and quantum of proof needed can be critical.
The Webber Estate Matter
In the much-publicized Geraldine Webber Revocable Living Trust case (Aug. 18, 2015 Order), a young Portsmouth police detective befriended 93-year-old Geraldine Webber. The court concluded that a fiduciary relationship existed, as the detective had become involved in Webber’s life, assisting with her banking and medical needs, frequently calling and visiting her, and assisting her to find a lawyer to modify her estate plan, providing him with a sizable portion of her multimillion-dollar estate. This confidential relationship gave rise to a presumption of undue influence, which was not overcome. The newly modified estate plan was set aside in its entirety.
The Alice Stedman Trust Matter
In In Re: Alice Stedman 1989 Trust (Oct. 27, 2015 Order), the court was faced with allegations that Alice Stedman (also age 93) was unduly influenced by her daughter, resulting in the modification of her trust just 19 days before Stedman’s passing, benefiting the daughter. The court found that although Stedman had been a strong woman, even described as a “force of nature,” in the last months of her life, she became weak, frail, lethargic and dependent on her daughter for her physical needs, such that she was much more susceptible to undue influence. The court determined that a fiduciary relationship existed and ruled that the daughter failed to carry her burden to prove the absence of undue influence. The trust modification was set aside.
Fiduciary Relationship and Burden of Proof in Undue Influence Cases
In both Webber and Stedman, the court carefully set forth the law regarding fiduciary relationship and undue influence.
A fiduciary relationship is commonly referenced as a comprehensive term where influence has been acquired and abused or confidence has been reposed and betrayed. Such a relationship can exist between two persons where one has gained the confidence of the other and purports to act or advise with the other’s interest in mind. A court is more likely to find such a relationship where there exists a family or friendship component.
Undue influence has been described as the use of appliances and influence to take away the free will of the donor and to substitute another’s will for his, so that the instrument is not the expression of the wishes of the testator, but rather the wishes of another individual. However, mere persuasion will not invalidate an estate plan. Instead, the undue influence must amount to force and coercion, destroying free agency, not merely the influence of affection or the desire of gratifying another.
With wills, New Hampshire presumes the absence of undue influence upon the proof of a voluntary formal execution by a competent testator. However, if a contestant shows substantial evidence of undue influence, or circumstances arousing suspicion, the will proponent must then offer proof of the absence of undue influence. Likewise, with a fiduciary relationship, a presumption of undue influence arises, and the proponent of the estate plan has the burden of proving the lack of undue influence.
Quantum of Proof
What remains unclear under New Hampshire law is this: Where there is a confidential relationship with a benefit conferred to one in the relationship, resulting in an inference of undue influence, what is the quantum of proof needed to demonstrate an absence of undue influence?
Must the proponent show the absence (a) by a preponderance of the evidence, (b) by clear and convincing proof, or (c) beyond a reasonable doubt? It is this issue that the court grappled with in the Webber and Stedman decisions, noting that the New Hampshire Supreme Court has not specifically addressed the issue. The court noted a “deep split” in jurisdictions around the country, with California and others applying the preponderance standard, some applying the clear and convincing standard, and with Arkansas using beyond reasonable doubt.
The court also noted the difficulty in reaching a conclusion on this issue. On the one hand, undue influence is akin to fraud, which generally requires a heightened standard of proof. On the other hand, undue influence can occur without a material misrepresentation or omission, which makes it like an ordinary civil cause of action – where the preponderance of the evidence standard prevails.
The court articulated that it was inclined to agree with those courts that impose a “clear and convincing standard.” By its nature, undue influence by a confidante is often unseen and nearly undetectable to the outside world: “It strikes this Court that the best rule is one imposing a higher level of proof to rebut an inference of undue influence after a challenger first demonstrates a confidential relation and benefit conferred,” NH Circuit Court Judge Gary Cassavechia (ret.) wrote in his orders in Webber (p. 11) and Stedman (p.13).
However, despite this apparent inclination, the court in both Webber and Stedman nonetheless applied New Hampshire’s generally accepted quantum of proof in civil matters – preponderance of the evidence – ruling that this quantum of proof shall apply to the burden to prove the absence of undue influence where a contestant has demonstrated (1) a fiduciary relationship and (2) a benefit conferred. The court’s holdings were reached in part because the challenging parties in the Webber and Stedman cases did not press for application of the higher “clear and convincing” standard.
The Webber case was not brought up on appeal to the New Hampshire Supreme Court, but the Stedman case has been appealed. It is unclear whether the Supreme Court will address this particular issue. For now, the quantum of proof necessary to rebut the presumption of undue influence remains unsettled at best.
David Eby and Jonathan Eck are shareholders at Devine Millimet and served as trial counsel in the Webber case. Probate litigation matters, involving a broad range of issues, comprise a significant part of their practices.