The rule is well settled – a person trying to set aside a will must have clear and convincing evidence that the will was the product of undue influence. But, if the challenger has clear and convincing evidence that the person alleged to have exerted undue influence over the testator was in a confidential relationship with the testator, that person is presumed to have unduly influenced the testator and must show that they acted in good faith and that the testator acted on their own volition. These principles were involved in this case – a case made juicier because it involved the decedent’s daughter suing her nephew, and because the court seemed to indicate that the daughter was a family troublemaker.
The case involved a family farming operation that involved several different tracts of land. After the father of the clan died in 1968, Mom began running the farm – at the age of 66. She kept the books, wrote her own checks and marketed grain up until just before she died in 2006 – at the age of 104. Mom owned the “Home Place” (a 160-acre tract that she had lived on since 1931) and the “North Place” (an 80-acre tract). One of her grandsons (her son’s son) was the tenant on both farms, operating them under a crop-share lease. Mom also had a life estate in a third farm – the “South Farm.” She leased the South Farm to another grandson (her daughter’s son). Her son and daughter-in–law owned another farm (known as the “Double O Place”) which the same grandson that farmed the North Place and Home Place farmed with his father.
Mom lived on the Home Place, her son lived less than a quarter of a mile away, and her tenant grandson and his family also lived on the Home Place. When Mom was 95, she talked with her son about doing some coordinated estate planning. She told her lawyer to draft a revocable trust naming herself as trustee and leaving the Home Place to her son and the North Place to her daughter. The son would then leave the Home Place to his son – the grandson farming the Home Place. To accomplish the estate plan, the son also had the lawyer prepare a revocable trust which would leave the Home Place (which the son had no interest in yet) to his children, and that the Double O farm would pass to his then living children and the children of a pre-deceased child. In addition, the trust gave Mom’s grandson that was farming the Home Place a farm tenancy in the Double O farm for ten years at the cash rent rate for other comparable farm ground. Mom did not include her daughter in any of the discussions concerning her estate plan, apparently because the daughter had a track record of causing family disharmony which Mom wanted to avoid.
Two years after the trusts were created, Mom’s son and daughter-in-law died. The Double O farm passed as indicated in the trust, and the existing tenancy continued pursuant to the 10-year term specified in the trust. Mom (now 97) then amended her trust so that her son’s children (her tenant-grandson and his brother who lived in Texas) would receive the Home Place equally.
Mom continued to live on the Home Place. Her grandson tenant and wife who lived on the Home Place checked on her daily, helping her out with meals and driving her where she needed to go.
After Mom’s son and daughter-in-law died, her daughter and granddaughter (daughter of Mom’s now-deceased son) began griping about the estate planning that had been accomplished (even though it was none of their business). They complained about the ten-year lease and the amount of rent being paid (which, again, was none of their business). The granddaughter tried to break her father’s trust and whined to her grandmother about the estate planning that had been done. That was a big mistake. Mom (now 96) asked her lawyer to amend her trust to give her grandson-tenant the option to buy his brother’s one-half interest in the Home Place at 80 percent of its value at the time Mom died. Mom’s lawyer had a physician evaluate Mom’s mental capacity and she checked-out as “excellent.” The trust was then amended as Mom desired.
At age 98, Mom broke her hip and became less mobile. Her tenant-grandson and his wife then took on more responsibility for Mom’s care. At age 100, Mom did some further estate planning. This time she amended her trust and had a will prepared which would leave the North Place to her grandson-tenant instead of her daughter. Three years later Mom’s health started to fail, and her grandson and his wife provided Mom with constant care until Mom’s needs became so great that she needed to be placed in an assisted living facility. Other family members complained about the decision to put Mom in the care facility, but they didn’t offer to help care for her either.
Mom died a few months later (nine days after turning104), and less than three months later her daughter sued to set aside any property transfers that Mom had made to her grandson-tenant during life, remove the grandson as executor of Mom’s estate, and set aside Mom’s will and trust. The grandson filed for a declaratory judgment on the basis that his aunt’s lawsuit placed a cloud on the title to the Home Place. So, he asked the court to declare that his option to buy-out his brother’s interest in the Home Place would not lapse until six months after the will contest action was concluded.
The trial court dismissed all of the daughter’s claims. The court ruled that the daughter failed to prove that the grandson and Mom had a confidential relationship, and that the Mom’s estate plan was the product of undue influence. The trial court also gave the grandson six months within which to exercise his buy-out option. The daughter and the grandson-tenant’s brother appealed, claiming that the trial court mistakenly failed to distinguish between a confidential relationship and undue influence. They claimed that the confidential relationship began before Mom amended her trust in 1998, so the trust amendments should be set aside. But, the appellate court disagreed. A close relationship to a testator does not mean that a confidential relationship exists. That requires the testator rely on another party for important affairs and the other person is duty-bound to act in good faith for the testator’s benefit. That wasn’t the case here. All family members testified that Mom was an intelligent, strong-willed woman who carefully managed her finances, business dealings, taxes and investments. They also testified that Mom was stubborn and couldn’t be pushed around. That sealed the deal – there wasn’t evidence to support the daughter’s claim of confidential relationship. As a result, no presumption of undue influence arose, and the daughter failed to produce evidence that would support the notion that Mom was unduly influenced in her estate planning.
The case points out a couple of key points. First, many parents want to avoid family conflicts. Accordingly, as parents age, they tend to discuss key matters with only those family members that they trust. That happened here. While some family members knew of Mom’s estate planning for years before she died, the daughter was not included in those discussions because, as the court stated, Mom wanted to avoid conflicts within the family. Apparently, the daughter had conducted herself over the years in a manner that created family disharmony and made herself a person that Mom couldn’t trust. Second, parents can disinherit children if they so desire. While the daughter was not disinherited entirely, her behavior certainly ended up costing her.
The old saying holds true – “If Mama ain’t happy, ain’t nobody happy.” In re Estate of Otteros, No. 8-241/07-1115, 2008 Iowa App. LEXIS 428 (Iowa Ct. App. Jun. 25, 2008).