When a Massachusetts will is contested by lawyers in court for "undue influence", who has to prove what?
A recent Massachusetts Appeals Court case Germain v. Girard deals with a will, a trust, and issues such as: presumptions and burdens of proof (as well as offers of proof.) At the core of the case is a claim of undue influence and the status, if any, of a fiduciary. The case is interesting on its facts but also in the implications one can read from the decision.
Factual Summary
George had a will leaving everything to Theresa (Wife). George gets sick but has a potential big lawsuit due to his condition. Theresa has a daughter, Paula (Daughter), who is married to Alan. Alan helps an aging George and Theresa over the years with various financial matters. Alan become a trusted adviser to George. Alan contacts lawyers for George (about the potential lawsuit). George decides to change his estate documents based on the potential claim. Alan has lawyers draw up a new will and trust for an ill George. An attorney (who had never spoken to George, only Alan) visits George in the hospital and the new estate planing documents are signed. Under a new trust, instead of Wife getting everything (as she did under the old will), the anticipated significant settlement proceeds will be placed in a trust. Under the trust, Wife will have no control over the trust or the trust's funds. Instead, Wife will be entitled to funds during her lifetime, however, these amounts are discretionary and decided solely by Daughter (in Daughter's role as the Trustee.) Daughter, in addition to being a trustee, is also an interested remainder beneficiary. That is, after Wife passes away, Daughter stands to receive a significant amount of money so long as it remains unspent during Wife's lifetime. While there are other facts involved, these give us a background for our general discussion on will contests and undue influence claims in Massachusetts
Review of Law as Examined by the Appeals Court:
In a will contest involving allegations of undue influence, the burden of proof ordinarily rests with the party contesting the will. … However, in cases involving a fiduciary, the fiduciary who benefits in a transaction with the person for whom he is a fiduciary bears the burden of establishing that the transaction did not violate his obligations. … [quotes removed]
Burden of Proof
Burdens of proof are topics people don’t think of much in civil cases but we always seem to think of them in criminal cases. We all know the mantra that the prosecution has the burden of proving the defendant’s guilt beyond reasonable doubt. This means the prosecution has the affirmative burden of proving the defendant’s guilt.
The defendant does not need to prove his or her innocence. The question is not if the defendant is innocent, the fundamental question is, “Did the prosecution prove guilt?” Here the court is saying when someone claims undue influence in a will contest, then the person making the claim usually has the duty to prove the charge of undue influence. However, this does not apply when a fiduciary is involved and the fiduciary also benefits from the transaction. In these cases, the fiduciary is assigned the burden of proof and the fiduciary must prove the transaction did not violate the fiduciary’s obligations.
Ultimately, Germain v. Gerad largely comes down to who has the burden of proving what. The trial judge found the Wife had the duty, but the Appeals Court disagreed. Instead the Appeal Court discussed the uncertain nature of “fiduciary” relationships and then concluded that the burden of proof falls upon Daughter to prove Alan did not exert undue influence over George. In reviewing this area of law, the court states:
"Although some fiduciary relationships, such as that between guardian and ward, are created by law, others arise from the nature of the parties' interactions. The 'circumstances which may create a fiduciary relationship are so varied that it would be unwise to attempt the formulation of any comprehensive definition that could be uniformly applied in every case.'" … "Where the fiduciary relationship is not one created by law, the existence of the relationship ordinarily is a mixed question of law and fact for which the party asserting the relationship bears the burden.” …
The court found the,
… [trial] judge's subsidiary findings leave no doubt that Alan stood in a fiduciary capacity toward George in the preparation of George's 2004 will and related documents. The judge found that George placed his trust and confidence in Alan, based upon a close relationship over ten years. George trusted Alan to manage his household affairs and expenses while George and Theresa were in Florida for significant portions of the year. Of even greater significance with reference to the present case, George entrusted to Alan all responsibility for overseeing the preparation of his 2004 will and related documents, and George's deteriorating health left him wholly dependent on Alan's assistance toward that end.
There is likewise no doubt that Alan stood to benefit from the transaction in which he was involved. Though Alan was not named a beneficiary under the will or the trust, his wife, Paula, was. Under the principles enunciated in Cleary … his status as a fiduciary subjects his actions to heightened scrutiny. Though Alan was not a party to the petition (by reason of the fact that he was not a beneficiary under the will), in circumstances where a fiduciary stands to receive a benefit indirectly we see no reason why the burden shifting prescribed by Cleary … should not be applied to the direct beneficiary (here Paula) from whom the fiduciary's (here Alan's) indirect benefit derives. Accordingly, under Cleary, the judge should have placed on Paula the burden of establishing that Alan did not exert undue influence on George in connection with the 2004 will and trust.
The court discussed 4 considerations that are usually present in a case of undue influence:
- unnatural disposition has been made,
- by a person susceptible to undue influence to the advantage of someone,
- with an opportunity to exercise undue influence, and
- who in fact has used that opportunity to procure the contested disposition through improper means.'"
The court found:
George's rapidly deteriorating health, combined with the absence of any direct communication between him and the attorneys preparing his will, left him vulnerable to Alan's influence, and Alan's role in initiating contact with his own attorneys, and thereafter conducting all communications with them, clearly gave him the opportunity to exert such influence.
Because the trial judge placed the burden of proof on the wrong party, and because there was evidence to support a contrary conclusion, his conclusion that there was no undue influence cannot stand.
Other Matters and Practice Considerations:
Trustees as Later Beneficiaries
The court stated,
…Paula's dual roles as trustee and remainderman create an obvious conflict of interest which, though not improper per se, created an incentive for her to preserve rather than distribute the trust corpus.
What does this mean for estate plans? Often an adult child or children are named trustee(s) of the parent's trust during the parents' lifetime. Following the parents' deaths, the children become beneficiaries. How is this "obvious conflict of interest" to be handled under best practices? Anyone considering becoming a trustee and a beneficiary may want to explore these issues in greater detail.
Offers of Proof and Failures to Make Them Can Cost You Your Case
The Appeals Court discussed an evidentiary issue that all trial lawyers and pro se litigants (self-represented) need to take note of. In this case, the Wife claimed the judge made an error by, “refusing to allow Dr. Howard Sachs [her expert witness] to offer his opinion regarding George's testamentary capacity to execute the 2004 will and related documents..." She did not, however, make an offer of proof at trial to indicate what this expert's testimony would have been. The court held:
Absent an offer of proof, she cannot demonstrate that she suffered any prejudice as a result of the challenged evidentiary ruling. … Her contention that the judge erred in finding that George possessed testamentary capacity fails as well; to the extent the contention rests on her assertion that Dr. Sachs's excluded testimony would have dictated a contrary conclusion, it rests on speculation (in the absence of an offer of proof) concerning what his testimony would have been.
What does this mean? The court is saying, if Wife wanted to rely on the Doctor’s expert testimony to prove something then she should have made an “offer of proof” (when the Doctor’s testimony was not allowed at trial.) What’s this “offer of proof?” It's basically the testimony or evidence that's being excluded or what would have been shown if it had been allowed. As you can guess, failure to address this issue, that is, to make a timely offer of proof, can cost you a case. Thus, since Wife’s argument rested on Doctor’s testimony, the argument fails because the testimony was not allowed. In this case, you can’t appeal the suppression of an opinion when it wasn't declared what the opinion would prove. There's an important lesson to be learned by all – make sure you make an offer of proof when the judge rules against you, because failure to do so may leave you with nothing to stand on down the road.
What Happens Next - Remand and The Role of the Different Courts?
So you ask, how does the story end? I don't know, at least, not yet. Following an appeal a case may be
remanded. This means the case is sent back to trial court for additional actions based on the appellate court's opinion. This is an example of how in our judicial system appellate courts generally rule on questions of law, while facts are decided by judges or juries at the trial court. The situation can be tricky, however, when the line between the two is blurred or not well defined. Recall the court's word's from above:
Although some fiduciary relationships, such as that between guardian and ward, are created by law, others arise from the nature of the parties' interactions. The 'circumstances which may create a fiduciary relationship are so varied that it would be unwise to attempt the formulation of any comprehensive definition that could be uniformly applied in every case.' … Where the fiduciary relationship is not one created by law, the existence of the relationship ordinarily is a mixed question of law and fact... …
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