As we discussed in What is Undue Influence?, many undue influence cases turn on whether or not there is a “confidential relationship.” And while most of these cases involve will contests, the doctrine of undue influence can be used to set aside lifetime transfers.
A recent Forrest County probate case involved a beneficiary designation that was set aside on grounds of undue influence. In the case, four siblings petitioned the court to return a beneficiary designation to its original state before their sister had allegedly exercised undue influence over their mother.
Helen Simpson passed away at age 86 in March of 2005. She left behind five children, Alfred, Audrey, Kathryn, Olivia, and Willie. She also left behind four accounts at her local bank that were payable on death (POD) to named beneficiaries. When the accounts were originally set up, all five children were the beneficiaries on each account. By the time of Mrs. Simpson’s death, Audrey was the only beneficiary named on the accounts.
After her mother’s death, Audrey petitioned the court to have the funds in the accounts distributed to her. This normally wouldn’t have been necessary, but Willie and Kathryn had been appointed conservators of Mrs. Simpson’s in February 2005 and had frozen her assets. The bank and the remaining children joined the action regarding the accounts in order to get a judicial determination of whether the beneficiary designation was enforceable.
As is often the case with undue influence situations, the case turned on the finding of a confidential relationship. A presumption of undue influence will extend to any confidential relationship where one person becomes dependent on another in some capacity. Once the presumption arises, the burden of disproving the undue influence falls upon the person allegedly benefiting from the undue influence. In other words, once the confidential relationship is found, it is up to the alleged influencer to disprove undue influence.
The Forrest County Probate (Chancery) Court had no trouble finding a confidential relationship between Audrey and her mother at the time her mother changed the beneficiaries on the account. Audrey had pushed her other siblings out of her mother’s life and served as her mother’s sole caregiver. Audrey visited her mother on a daily basis and drove her to doctor’s appointments. And her mother was of advanced age, being 85 when she made the beneficiary changes.
Once the confidential relationship was established, it was up to Audrey to prove that the change in beneficiary designations were not the product of undue influence. To do this, Audrey had to prove that she had not exerted undue influence upon her mother to change the beneficiary designation. And Audrey didn’t put up much of a case, responding simply that there was no reason to discuss the issue. The only evidence supporting Audrey was her testimony that it was her mother’s idea to change the beneficiaries and that Audrey did not pressure her mother to do so. But this evidence alone did not rebut the presumption of undue influence.
The Mississippi Court of Appeals affirmed the lower court’s decision. Because the court found the confidential relationship to exist and little to no evidence to rebut the presumption, the appellate court had no choice but to invalidate the newest beneficiary designation. This meant that all five siblings took equally.
McGee v. Simpson, 2007-CA-02048-COA
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