When death is imminent for an individual, it can result in their mental capacity being compromised, which, in turn, could render any subsequent estate planning documents they create invalid. But does an individual’s close proximity to death necessarily mean they are mentally incapacitated? This Keystone case attempted to answer that very question.
“From a legal standpoint, when a person lacks capacity, they generally cannot understand the impact of their decisions and may be more susceptible to undue influence,” says Verlan Kwan, a partner at Keystone Law Group. “For this reason, if a person who lacks capacity executes an estate plan, it can serve as a ground for seeking to have their estate plan invalidated by the court.”
If you were disinherited by a close family member who you didn’t expect would disinherit you, it’s natural to wonder whether a mental deficit of some kind or another person’s undue influence could have played a role in their decision. In fact, there are many cases in which these are the reasons behind unusual terms in decedents’ estate plans. However, it’s also worth considering whether your loved one had logical reasons for acting how they did and whether they made their decision of their own free will.
In this case, Keystone’s client was the daughter of the decedent, the successor trustee of her trust, the executor of her estate and her caregiver in the final months of her life. She had two sisters, one of whom was expressly disinherited from the decedent’s trust and one who was only left a portion, if any residue remained.
Because all three daughters enjoyed a close relationship with the decedent, their mother, it was a shock for Keystone’s client’s sisters to learn that Keystone’s client would essentially be receiving the entirety of their mother’s trust.
The expressly disinherited sister arrived at the conclusion that not only did our client manipulate the decedent into leaving her the most valuable asset in the trust, but that the decedent also lacked capacity, since she executed her trust less than a month before her death from an aggressive form of cancer.
The client’s other sister, on the other hand, was more concerned about our client’s actions as trustee of the decedent’s trust. She believed our client had breached her fiduciary duties, and as a result, should be removed as trustee and surcharged.
On the surface, this case appeared to have many red flags. Why would a mother disinherit daughters with whom she was not on the outs? Looking closer, however, you’ll realize the case is complicated by challenging family dynamics and a slew of other factors, which ultimately eliminated the mystery behind the decedent’s decisions.
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What Made the Decedent Favor One Daughter Over the Other Two?
The decedent in this case was the mother of three adult daughters and a force to be reckoned with. She had been suffering with an aggressive and painful form of cancer for upward of three years, but she remained strong-willed throughout her battle with the illness. Her mental faculties had ostensibly remained just as strong, with lapses in cognition occurring rarely, if ever.
While the implicitly disinherited daughter and her daughter (the decedent’s granddaughter) had been caring for the decedent and tending to her needs, they were experiencing burnout from doing so, which caused them to take a step back. This led to our client stepping in to play the role of caretaker in the final and most challenging months of the decedent’s life.
Our client, however, didn’t just step in; she moved in. She took a family leave from her job to live with her mother and provide her with 24/7 care. She bathed her, prepared her meals and transported her to and from her doctor appointments. In other words, she upended her life to be there for her mother during her exceptionally difficult final days.
The expressly disinherited daughter had been close with their mother and was in communication with her regularly via phone and text, but she lived across the country and had a very demanding job. Our client stated that when this sister would visit their mother in person, she was consumed with work and would conduct business in her mother’s home, which bothered their mother.
The decedent had a deep spiritual connection to her home and desired for it to be a place of tranquility. She was adamant about keeping distractions out of her home and only allowing those into her home who would fully support her process.
Even though the individual relationship between each of the three daughters and the decedent had been strong, the daughters’ relationships with one another had been strained. The expressly disinherited daughter and our client hadn’t spoken in over a decade, and the other daughter and our client spoke sometimes, but they hadn’t been on the best of terms.
Upon sensing that her death may be imminent, the decedent reached out to a who had been recommended to her by an acquaintance. She informed him that she wished to create an estate plan. Our client accompanied her mother to the meeting with the attorney, but she was asked to leave the room once discussions about her mother’s estate plan were started. The attorney provided the decedent with a questionnaire to complete as homework, which would help him in the eventual drafting of her estate planning documents.
At this time, the decedent had been in poor physical health and had arrived at the attorney’s office in a wheelchair. That’s why the attorney found it perfectly reasonable that our client helped fill out the questionnaire on behalf of her mother. The attorney read aloud the responses from the questionnaire with both the decedent and our client present. He later would use terms such as “assertive” and “unequivocal” to describe the decedent’s demeanor during that meeting.
The estate plan that ultimately was created as a result of this meeting would name our client as the trustee of the decedent’s trust, the beneficiary of her residence and a residual beneficiary (meaning that she would inherit whatever assets remained in the trust). One other sister had also been named a residual beneficiary, whereas the other sister had been expressly disinherited.
At this point, you are probably wondering why a mother would disproportionately favor one of her children over the others despite having pleasant relationships with all of them. We discuss some of the reasons why below.
Troubling Family Dynamics
While the decedent had never intended to leave the expressly disinherited daughter her residence, she decided to leave her nothing after learning from her sister (our client’s aunt) that this daughter had told her that her mother should leave all three sisters equal shares of her trust. She also had told her aunt that she would sue our client if she took title to their mother’s residence.
While disinheriting this daughter had not been an impulsive decision on the part of the mother — she had been contemplating this decision for a while — the conversation this daughter had had with her sister had been the straw that broke the camel’s back. The decedent was extremely independent and opinionated, and she did not like anyone telling her what to do. It, therefore, was not a surprise that she did not take kindly to her daughter’s comment.
Client Volunteered and Acted as Caretaker
Although the decedent’s granddaughter made claims that the decedent had been referring to our client as a “vulture” who was only after her money, she eventually came to see the value our client brought to the table. Our client was dedicated to her mother’s care and attentive to her needs — something a licensed clinical social worker at the decedent’s hospice confirmed.
The decedent likely appreciated all that our client had done for her — and had to give up — which is why she left her nearly the entirety of her trust estate and named her as the trustee of her trust. The decedent’s other two daughters both had demanding jobs and could not be as present for the decedent as our client.
Decedent Did Not Want the Residence to Be Sold
Although the decedent’s granddaughter made claims that the decedent had been referring to our client as a “vulture” who was only after her money, she eventually came to see the value our client brought to the table. Our client was dedicated to her mother’s care and attentive to her needs — something a licensed clinical social worker at the decedent’s hoDue to the decedent’s deep connection with the residence, she wished for it to remain in the family, so she wanted to leave it to either our client or the implicitly disinherited daughter’s son. The expressly disinherited daughter had never even been considered as a potential beneficiary of the residence. The client’s other sister had always stated that she did not want her mother’s residence, as it was too expensive for her to own due to the presence of a $500,000 mortgage.spice confirmed.
The decedent likely appreciated all that our client had done for her — and had to give up — which is why she left her nearly the entirety of her trust estate and named her as the trustee of her trust. The decedent’s other two daughters both had demanding jobs and could not be as present for the decedent as our client.
Decedent Wished to Exercise Control
Having a terminal illness can, understandably, make a person feel like they have no control over their life. The decedent, though spiritual and contemplative, displayed signs of anxiety, according to the clinical social worker with whom she interacted regularly in hospice. A telltale symptom of anxiety is a need for control.
Because the decedent had lacked control over her physical health, she grasped tightly to what she could control: her estate. Though she would not be alive to control what happened with its most valuable asset — her residence — she wanted to leave it in the hands of the daughter who would be most likely to abide by her wishes, our client.
Being as unwavering as she was, the decedent understood the potential consequences of her decision, but decided to do with her assets what she saw fit anyway. She did not want her daughters’ opinions on the matter swaying her one way or the other.
Expressly Disinherited Daughter Files Petition to Invalidate Trust
When a person creates a trust, it’s generally presumed they both had the capacity to create the trust and that they did so free of undue influence.
However, when doubts arise following a person’s death that their trust is a representation of their true final intentions, the law allows for beneficiaries to bring what is known as a trust contest to try to have the trust invalidated by the court. The expressly disinherited daughter argued that if her other’s trust were successfully invalidated, she would inherit by means of intestate succession, which would provide her with one-third of their mother’s estate in this case.
Still, a party must have valid grounds for bringing a trust contest. Grounds for contesting a trust include:
- Undue influence
- Lack of capacity
- Fraud
- Forgery
- Elder financial abuse
- Mistake
- Improper execution
In this case, the expressly disinherited daughter brought a trust contest to try to have the decedent’s trust voided on the bases of lack of capacity and undue influence. In other words, the daughter believed that her mother’s trust was invalid not only because the decedent had lacked the mental competence to create a trust when she did, but also because her mother had been unduly influenced by our client to create a trust that disproportionately favored her.
We examine these two grounds for contesting a trust in relation to this case in the following subsections.
On the Issue of Capacity
When a person is elderly, feeble, forgetful, or physically ill or disabled, it’s common for their capacity to be called into question; however, none of these characteristics necessarily equate to them being of unsound mind.
In the same vein, if a person has displayed a lack of competence or understanding a handful of times, it does not mean they lack testamentary capacity, or the capacity to create a will.
In general, a higher degree of capacity is needed for a person to create a valid trust than to create a will. This is due to the fact that trusts tend to be more complex documents than wills.
However, In the 2011 California Court of Appeal case Andersen v. Hunt (2011) 196 Cal.App.4th 722 the court held that the capacity to create a simple revocable trust or simple amendment to a revocable trust may be the same as the capacity to create a will or codicil under California Probate Code section 6100.5.
This finding was further expanded by the California Court of Appeal case In re Marriage of Greenway (2013) 217 Cal.App.4th 628, in which a sliding-scale approach to determining capacity was adopted. To put it another way, the court decided that the required level of capacity would rise or fall based on the complexity of the action in question.
According to Section 6100.5, an individual is not mentally competent to make a will if, at the time of making the will, either of the following is true:
- The individual does not have sufficient mental capacity to be able to do any of the following:
- Understand the nature of the testamentary act.
- Understand and recollect the nature and situation of the individual’s property.
- Remember and understand the individual’s relations to living descendants, spouse, and parents, and those whose interests are affected by the will.
- The individual suffers from a mental health disorder with symptoms including delusions or hallucinations, which delusions or hallucinations result in the individual’s devising property in a way that, except for the existence of the delusions or hallucinations, the individual would not have done.
In this case, the decedent’s trust had been straightforward and simple; therefore, Keystone argued that to create the trust, the decedent needed only testamentary capacity, not the capacity to enter into a contract under California Probate Code section 812. That said, according to the evidence, even if the decedent had required the capacity to enter into an even more elaborate contract, she likely possessed it.
The expressly disinherited daughter was claiming lack of capacity based on several factors that carried little weight based on the standards of capacity described above. For example, she was claiming the decedent lacked capacity because an isolated incident had occurred in which the decedent had been confused about the terms of the leasing agreement for the rental property she owned.
The daughter was also claiming lack of capacity based on the decedent’s use of narcotics to treat cancer-related pain and because she believed her strong-willed mother would not have allowed our client to control her household and what visitors she has. She also claimed a physician in the hospital where her mother was being treated had mentioned the decedent possibly having dementia, but there was no record of this that could be found.
Witnesses with no stake in the outcome of the matter, such as the decedent’s sister, estate planning attorney and licensed clinical social worker, had been called to provide testimony surrounding the decedent’s capacity to create a trust. All agreed that the decedent had been in control of her mental faculties and displayed higher-level thinking. In short, she’d shown no signs of mental deficits.
Keystone demonstrated that the expressly disinherited daughter’s arguments surrounding her mother’s supposed lack of capacity were weak. The decedent not only possessed the requisite capacity to create her trust but the capacity she possessed exceeded the capacity that was required to create her trust.
On the Issue of Undue Influence
According to California Welfare and Institutions Code 15610.70, undue influence means “excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity.”
In this case, the expressly disinherited daughter was claiming that our client secured her place in the decedent’s trust by unduly influencing her.
Because undue influence is subtle and rarely is discovered until after it has taken place, the evidence needed to prove it tends to be circumstantial.
To prove undue influence, the court generally considers factors like*:
- The mental and physical condition of the transferor;
- The fiduciary relationship between parties;
- The beneficiary’s control over the transferor’s business affairs;
- The transferor’s dependency on the beneficiary for care and attention;
- Domination on the part of the beneficiary and subserviency on the part of the transferor;
- The relationship between the parties that made the transferor particularly susceptible to the exertion of influence by beneficiary;
- The absence of independent advice on transaction; and
- The tactics of the beneficiary to procure the transaction
*It’s worth noting here that just because a person is of sound mind, it does not mean they are immune from undue influence. The distinction to make is that persons of unsound mind or diminished capacity tend to be more vulnerable to undue influence because they cannot adequately protect themselves against it.
While the expressly disinherited daughter was claiming our client exerted undue influence on the decedent to achieve her beneficiary status, there was clear and convincing evidence to suggest our client did not unduly influence the decedent.
- While our client accompanied the decedent to her estate planning attorney and later assisted her with filling out an estate planning questionnaire due to the decedent’s frail physical condition, the decedent had reached out to and hired the estate planning attorney on her own accord. There was no evidence that our client spoke for the decedent or played a role in actively procuring the document. The decedent’s estate planning attorney testified that the decedent had known her testamentary wishes without equivocation.
- The decedent’s decision to leave our client her residence was the product of careful thought and consideration, as the decedent had wished to show gratitude toward our client, who had cared for her during her final physically difficult months, and wished for her home to pass to a beneficiary that would not sell it. In her mind, that beneficiary was our client. There was nothing unusual about this decision.
- Almost everyone who knew the decedent had testified to her strong-willed nature, which would indicate she was incapable of being manipulated. In fact, at one point, the decedent had emphatically stated to her sister that she had the right to make decisions about her own estate plan. For this reason, if our client had unduly influenced the decedent, it likely would have been counterproductive, evidenced by the fact that the tipping point for the decedent’s express disinheritance of her daughter was that specific daughter expressing to Decedent’s sister how she thought her mother should divide her estate.
- The decedent had not been isolated for any reason that could be traced back to our client. The decedent requesting for her daughters to refrain from visiting was because the decedent desired for there to be peace in her home, which seemed impossible when more than one of her daughters was in her presence because of complicated family dynamics. The decedent had never ceased communicating with her other daughters via phone and text.
- While our client did receive a greater inheritance under the decedent’s trust than she would have had the decedent died intestate, the terms of the decedent’s trust were not a sudden departure from firmly expressed intentions to entirely new ones. The decedent had never stated an intention to leave her residence to the expressly disinherited daughter.
For all the aforementioned reasons, Keystone was able to prove that our client did not unduly influence the decedent. The decedent’s decision to, more or less, disinherit two out of three daughters was fully made of her own volition and after considerable contemplation.
Decedent’s Other Daughter Files Petition to Remove and Surcharge Trustee
Because of the complex family dynamics underlying this case, we can admit our client’s actions were somewhat unusual, but not without reason. For instance, in her distraught state, she did not alert her sisters of their mother’s passing immediately after it occurred in the evening, leading them to have to learn about it through another relative the following morning. Still, our client’s actions did not warrant trustee removal or a surcharge, as the client’s other sister was requesting from the court.
There were several reasons why the client’s sister was claiming our client committed trustee misconduct. For one, Keystone’s client had hired her son, who is not a licensed contractor, to make repairs on the decedent’s rental property. Second, there were expenditures and withdrawals in the informal trust accounting that her sister believed were questionable. Third, our client had taken $10,000 in trustee fees.
The main issue with the implicitly disinherited sister’s petition was the fact that she’d failed to establish standing for the relief she’d been seeking. It was true that she had been named as a residual beneficiary of the trust, but because the estate apart from the decedent’s residence was worth less than the mortgage on the property, she had effectively been disinherited, since the trust would have no residue to distribute to her. As such, if her surcharge petition had been granted, our client would have had to pay the trust for her supposed misdeeds, not her sister.
In addition to the implicitly disinherited sister lacking standing, most of her claims of fiduciary misconduct by our client were easily explained. For example, our client hired her son as to make repairs because he charged the trust for only a portion of the work he completed and only completed work he’d been qualified to perform. Likewise, our client’s $10,000 in trustee fees also seemed reasonable, given how much work she’d put in and the fact that she’d personally funded around $300,000 for trust administration — an expense for which she’d never been reimbursed.
In the end, the court found no reason to remove or surcharge our client, or to require her to provide further accounting.
Understanding the Results: Decedent Made Estate Decisions With Rhyme and Reason
While the daughters who had been effectively disinherited in this case had every reason to feel disappointed by their mother’s estate plan, there was nothing unusual about it or about their mother’s desire to create an estate plan at a time when death had been imminent for her. In fact, it is common for people to gravitate toward getting their affairs in order when their medical condition is worsening.
While our client’s confidential relationship with her mother toward the end of her life and her subsequent place in the trust gave rise to concerns that she may have unduly influenced her mother, there was nothing odd about the decedent leaving her residence to our client, as our client not only provided her with full-time care and comfort when she needed it most, but she also was the daughter who was most likely to abide by her mother’s wish to not sell her residence.
Lastly, as highly opinionated and steadfast of a person she was, the decedent did not wish to be influenced by anyone or anything. She wanted to divide her estate in whatever way she saw fit, not in the way her daughters saw fit. When the disinherited daughter expressed to the decedent’s sister how she thought her mother should divide her estate, that was the nail in the coffin for her, so to speak. Even though the decedent had never intended to leave this daughter her residence, she expressly disinherited her, not due to our client’s undue influence but because of the daughter’s own actions.
By carefully laying out these arguments in front of the court, Keystone succeeded in proving beyond a doubt that not only did the decedent possess the necessary capacity to create a trust, but also that our client did not play a role in its procurement.
The Takeaway: Estate Planning for Terminally Ill Persons Comes With Challenges
Even though every person who has accumulated wealth should have an estate plan in place, many wait till the end of their lives to create one or fail to create one at all. There are problems with this trend.
“As probate attorneys, we often see people waiting until they are on their deathbeds to create estate plans,” says Partner Verlan Kwan. “This, however, is problematic. It can cast doubt on whether the person possessed the requisite mental capacity to create an estate plan, or it can raise suspicions about them potentially having been manipulated into acting according to another person’s intentions.”
While waiting till the end of one’s life can thwart questions from family members and friends about what their estate plan comprises, as well as potential arguments, it is a recipe for posthumous litigation. The better approach is creating an estate plan early in one’s life and periodically revisiting and amending it as needed.
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If your deceased loved one died with an estate plan that you believe does not represent their true final intentions, we can help you look into the matter further. We also can help if someone is attempting to void your deceased loved one’s estate plan that you believe is valid. Regardless of the type of will or trust dispute you are dealing with, the skilled probate attorneys at Keystone Law Group can help. Call us today to request a free consultation.
