Defending Yourself When Accusations of Elder Financial Abuse and Exploitation Are Made
Introduction to Defending Against Challenges to a Gift/Will, Trust, Power of Attorney or Guardianship
Have you been accused of taking money from an elderly person or influencing them to give you money prior to their death or while they are still alive? Its frightening, isn’t it? Making accusations is easy but proving an accusation is something entirely different. Here’s what you need to understand.
Incapacity and undue influence are the most frequent allegations made in any fraud, conversion, will contest, trust dispute and allegation of financial exploitation involving the gifting of money made by a living or deceased person.
If the person was/is elderly, then claims of elder abuse or elder financial exploitation are often made because of alleged mental incapacity or undue influence. These types of accusations are serious and can subject the accused person to significant criminal and/or civil penalties, damage to his/her reputation, and legal damage claims by the victim and/or their family.
What is Undue Influence and How Does it Apply to Defending Against Claims That a Gift, Trust or Will Was Made With Lack of Capacity or Under Undue Influence, Conversions or Fraud
How to Defend Yourself Against Claims for Gifts Made to You Which Were Done Under Lack of Capacity
UNDUE INFLUENCE IN NEW JERSEY IS COMPRISED OF THREE ELEMENTS
THEY ARE AS FOLLOWS:
- The exertion of influence over another that is undue and significant (i.e., a mere allegation that certain decisions were not rationally made is not enough).
- The influence must overpower the elderly person’s free will and compromise his or her thinking at the time the will/trust/power of attorney was signed or a gift was made.
- That influence caused the elderly person to execute a will, trust or power of attorney or make a gift that he or she would not have made but for the undue influence.
New Jersey case law describes undue influence as either, mental, moral or physical coercion that causes the testator/donor or grantor do something that is contrary to what the testator/donor or grantor would have normally done.
Often, it is alleged because of undue influence, the will, trust or gift reflects the wishes and desires of the influencer (dominant person) not the testator/donor. These kinds of claims are tough to defend against.
THE TOUGH PART: PROVING UNDUE INFLUENCE
When addressing a claim of undue influence, a plaintiff must obtain information regarding the beneficiary(s) (the person receiving the gift). The evidence must clearly show motive or the opportunity for the beneficiary(s) to have attempted to exert undue influence over the elderly person at the time the will, trust or power of attorney was executed or over the donor at the time the gift was executed. This is tough to prove and gives the accused an opening.
Not all influences are “undue” influences. However, and this is an important point to be made and understood! To be “undue”, the influence must be such that it destroys or substantially compromises the elderly person’s free will to do as he or she pleases with his or her property and the disposition of his or her property. Each case is governed by the particular facts and circumstances surrounding the execution of the will, trust, or the making of the gift and the actions taken by the parties who took part in the gifting to determine if coercion or undue influence was exhibited. The mere making of a gift or transfer of $$$ is not enough.
Defending a Gift Made to You or Another Person Against Claims That the Gift Was Made When the Elderly Person Lacked Capacity or Was Under Undue Influence and/or Fraud
In New Jersey, a valid gift, whether made when the elderly person was/is alive or made under a will or trust generally has four elements. Those elements are:
- The elderly person acted, whether actual or symbolic, and gave delivery of something of value to another.
- There was/is an intention by the elderly person to give a gift to another.
- There was/is an acceptance of the gift by the receiver of the gift.
- The elderly person knowingly gave up legal ownership, physical possession and control over the subject matter of the gift to another.
If it is believed that the elderly person did not have donative capacity, a defense strategy includes the use of a comprehensive general durable power of attorney which provides the agent with the explicit power to make a gift(s). This financial power of attorney will allow the agent to make gifts that the person may no longer be able to legally make or effect on his or her own.
New Jersey courts have permitted guardians as Power of Attorney to make gifts and engage in estate planning with a well written power of attorney or certificate of guardianship.
People use the term “lifetime gifts” differently and claims made against you for receiving something of value because the donor lacked capacity requires a legal as well as medical analysis. If you would like advice on this subject, contact Fredrick P. Niemann, Esq. at (855) 376-5291 or email him at email@example.com to discuss your case. You’ll find him easy to talk to and confide in. All consultations are attorney-client protected.
Burden of Proof When Defending Claims That a Gift(s), Trust and/or Will is Invalid Because of Lack of Capacity, Undue Influence and Similar Grounds
The law presumes that an elderly person like any other person is competent be it while alive, or upon death. Whoever challenges that capacity has the burden of producing evidence to rebut that presumption. This means your accuser must first establish a case with credible evidence.
Undue Influence and Will Contests
Generally, the burden of proving undue influence lies with the contestant or with the person challenging the gift under the will, unless the beneficiary was in a confidential relationship with the deceased and there are suspicious circumstances surrounding the relationship.
A confidential relationship includes not only situations involving a legal or fiduciary relationship, such as guardian, power of attorney, conservatorship, principal and agent and trustee, but also in all cases where a relationship of trust and confidence exist.
In the case of gifts, once the confidential relationship and suspicious circumstances are proven, the burden shifts to the accused who must then prove by “clear and convincing” evidence that there was no undue influence. Here again there are often legitimate reasons why an elderly person would want to make a gift (large or small) to you or others. Just because you are or were in a confidential relationship does not legally negate the validity of the gift.
Defending Against Claims of Undue Influence or Gifts on Conversion of Funds Made While Alive
Someone has accused you of taking money from an elderly or incapacitated person.
What do you do? First read this background information:
Lifetime Gifts (a legal term for gifts made while a person is alive) are viewed “suspiciously “. As one Judge stated, “a person is not likely to give away inter vivos what he can still enjoy.”
A showing of a confidential relationship and/or proof that the beneficiary dominated the testator will satisfy the initial burden. If that burden is met, then the burden of proving a legitimate gift/transfer is on the party who asserts that defense. An accused defendant must produce “clear and convincing” evidence was there no undue influence, and that the transfer was well understood by both parties.
If a donor (person who makes a gift) is dependent on his or her resources for the necessities of life the and makes a “gift” of most of his or her assets, a presumption arises that the donor did not understand the consequences of his or her act or was subject to undue influence.
For Example: When the donee is the dominant person in the relationship, the burden is upon him or her to show by clear and convincing proof the gift was the voluntary and intelligent decision of the donor.
As compared to: If a donor is physically or mentally weak and the donor is left without adequate support after the transfer, independent advice is required.
Joint Bank Accounts and Undue Influence in New Jersey
Although joint bank accounts are inter vivos transfers, there is a different standard of proof than with other inter vivos transfers because joint bank accounts are governed by Multi –Party Deposit Account Act.
Under the Act joint accounts belong to the parties in the same proportion as the sums deposited by each party into such account unless: The terms of the contract indicate a different intent or there is clear and convincing evidence that at the time the account was created the intent of the parties was different than the proportional ownership.
The act creates a rebuttable presumption of survivorship in joint accounts.
Even if no undue influence is found, the court can look at all the direct and circumstantial evidence available to determine whether the decedent intended to create survivorship rights.
Procedural Issues Related to Defending Testamentary & Trust Undue Influence Claims
The contestant to a will may file a written objection (a caveat) to a will prior to the will being offered for probate. This filing prevents the surrogate from probating the will. The proponent of the will then must seek judicial approval in the Chancery Division, Probate Part of the Superior Court of New Jersey in accordance with Rule 4:82.
If the will already has been admitted to probate by the surrogate, the contestant must file a verified complaint and order to show cause with the surrogate’s court seeking to set aside the probate judgment of the surrogate.
Evidence Necessary by Your Attorney to be Successful in the Defense of a Will and/or Trust in Litigation
The mental condition of the trust maker/testator/donor prior and subsequent to the drafting of the will or the making of a trust or lifetime gift transfer demonstrates the testator’s/donor’s/trust maker’s capacity at the time the will/trust was made, or the gift effectuated.
Any declarations made prior or subsequent to the creation of the will or trust or making of the gift may demonstrate the testator’s/donor’s relationship with the person who received the economic value of gifts of his or her bounty.
Fact Witnesses – These witnesses are critical to demonstrate the physical and mental capacity of the decedent before the decedent’s death. Usually these witnesses are close personal friends of the decedent or family members.
Attesting Witnesses to a Will or Trust or Gift – Opinions of witnesses who were present at the signing of the will, trust or gift are afforded a great deal of credibility and believability as these witnesses were present and viewed the person during the will, trust or gift execution.
Attorney as Witness – The attorney is a useful witness as he or she observes the testator/donor from the time of the initial client meeting, through the drafting of the relevant planning documents and at the time of the document execution.
Treating Physician – A physician may qualify as both a fact witness and an expert witness, and the physician may testify to all treatment including mediations provided to the decedent and all conversations with the decedent.
Decedent’s Hospital and Medical Records – These records may be introduced to demonstrate the capacity of the testator/donor received at the hospital.
If you are an executor, trustee, beneficiary or a person who is being accused and has to address a claim by someone that an elderly person (or other) was taken advantage of or financially exploited by you or someone you know, then contact Fredrick P. Niemann toll-free at (855) 376-5291 or email him at firstname.lastname@example.org to meet and discuss your concerns. You’ll find him easy to talk to and very knowledgeable about the law in New Jersey on this subject.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Elder Abuse Attorney
DEFENDING AGAINST CLAIMS THAT GIFTS, TRUSTS & WILLS WERE MADE WITH LACK OF CAPACITY, UNDUE INFLUENCE & SIMILAR GROUNDS