Transfers by will can be set aside if they are the result of undue influence as the result of a confidential relationship between the decedent and the person receiving the transferred property. That concept was involved in this case.
The plaintiff operated a business which assisted the elderly with daily living activities. The decedent’s son suggested that his elderly parents hire the plaintiff to help them in their home. The plaintiff was hired and initially focused on helping the decedent’s wife. After several months the plaintiff wrapped up her business and stopping charging for her services. When the decedent’s wife died, the plaintiff kept in frequent contact with the decedent and volunteered to help him with numerous activities.
The decedent knew he was terminally ill and had a will in place that left all of his assets in trust for his three grandsons. However, he appreciated what the plaintiff had done for him and went to his local brokerage office and changed the beneficiary designation on an annuity worth about $19,000 to the plaintiff. He also went to his bank, took certain certificates of deposit worth about $16,000 out of his safety deposit box and had the bank make them payable to the plaintiff. In addition, the decedent went to his credit union and had approximately $22,000 of credit union funds made payable to the plaintiff. On each occasion, brokerage, bank and credit union personnel each noted that the decedent was lucid, acted alone and was clear concerning the impact of the changes that he was making.
After the decedent died, his will was admitted to probate. The Cherokee State Bank was appointed as the executor and moved for a temporary injunction to prevent the plaintiff from taking possession of the assets pending further investigation. The court granted the injunction and the Bank then claimed that the plaintiff was in a confidential relationship with the decedent and either abused that relationship or exerted undue influence over him.
In Iowa, a confidential relationship exists whenever one person is continuously dependent on the skill and integrity of another person. If such a relationship exists, a presumption of undue influence arises that can be rebutted by clear, satisfactory and convincing evidence that the recipient of the property acted in good faith and that the decedent acted freely, intelligently and voluntarily. Based on the evidence, however, the trial court determined that a confidential relationship did not exist. The appellate court agreed, noting that the decedent acting of his own free will in making the beneficiary changes at issue in the case. Even if a confidential relationship had been found, the court opined, the bequests would have been upheld because the plaintiff would have overcome any presumption of undue influence. Williams v. Estate of Ames, No. 8-431/07-1219, 2008 Iowa App. LEXIS 593 (Iowa Ct. App. Aug. 27, 2008).