Delaying Estate Planning Increases Likelihood of Undue Influence

/ September 11, 2017

As life expectancies increase, the rates of Alzheimer’s disease, dementia and cognitive impairment do so as well.  Of course, not all incidents of mental impairment are age related; stress and genetics are often catalysts in younger individuals as well.  These trends further emphasize the need for all of us to have our wishes reflected and financial matters organized while we can.

Finding of Undue Influence Overturned

In a recent decision by the Missouri Court of Appeals, the court reversed a finding of undue influence by one of the decedent’s children.1  Robert and Joanne Nestel had been married for over 50 years and had four children.  Robert operated a State Farm insurance office, where one of their children, Mary, had also been employed for 27 years.  Robert died on December 20, 2013, and left his estate and his business, by Will and to Joanne’s surprise, to the four children.

Joanne subsequently executed a Will of her own on January 23, 2014, amending it several times thereafter.  The Will appointed her daughter, Melissa, as the executor of her estate and Melissa’s husband, Chris, as the successor executor and divided her estate as follows: 20% to each of her four children (80%) and 5% to each of her four grandchildren (20%).  By June of 2014, Joanne had named Melissa as the beneficiary of the bulk of her assets, thus passing those assets to Melissa outside of the Will.

Joanne died on September 7, 2014.  Melissa’s siblings petitioned to have Melissa removed as the executor of the estate and to discover assets on January 21, 2015.  In March 2016, a jury found that Melissa had exerted undue influence over Joanne as to the bulk of the assets on which she had been named beneficiary.  Melissa appealed the finding.

In reviewing whether Melissa “exerted undue influence and overcame Joanne’s free will,” the appellate court considered circumstantial evidence, introducing Joanne’s journal and handwritten notes into evidence.  The writings indicated Joanne’s appreciation for Melissa and Chris and turbulent relationships with Robert and the other children.

Melissa’s siblings argued that Joanne’s Will reflected her true intent for her assets and that the designation of Melissa as beneficiary of her accounts was a result of undue influence, but Joanne’s attorney testified that “he saw no evidence of Melissa coercing or unduly influencing Joanne with regard to these transactions,” adding that “Joanne was concerned about a challenge to the Will if she left everything to Melissa.”

After considering all twelve of the siblings’ assertions of undue influence, including that Melissa controlled many of Joanne’s relationships, helped to facilitate the changes to Joanne’s documents and accounts, kept those changes from her siblings and had the knowledge to circumvent Joanne’s Will, as well as a lack of understanding by Joanne of her own financial situation, the court determined that the siblings failed to present substantial evidence that Melissa overcame Joanne’s free will.  The court stated that its decision was based heavily on the circumstantial evidence rather than precedence “because each case must be decided upon its own facts and it is seldom that we find cases involving strongly similar facts.”2  Additionally, the court noted that, like so many legal matters, there is no single test for finding undue influence but “rather it is a combination of factors.”3

 Undue Influence Litigation and Aftermath

While the primary goal of estate planning is to clearly reflect an individual’s wishes for his or her family and assets in anticipation of a time when he or she is unable to communicate such wishes, it is important to do so in a manner that will not subject the family to unnecessary conflict and litigation.  In the case of the Nestel family, not only did Joanne and all of the siblings incur significant legal costs in contesting Robert and Joanne’s Wills, but it is unlikely that the siblings and their descendants will ever recover their damaged relationships.  This may or may not have been unavoidable in this particular family, but it is clear that both personal and legal steps could have been taken to clarify or minimize the twelve accusations that the siblings brought up against Melissa in court.  Perhaps those steps could have saved some relationships as well.

Planning Ahead

Regardless of an individual’s wealth, his or her wishes should be reflected clearly in properly executed estate planning documents before it is too late. Once capacity is diminished or lost, the estate planning and administration processes become much more difficult and expensive; often impossible to accomplish without court involvement.

 

  1. Mark Nestel, et al., Respondents, v. Melissa Rohach, Appellant, WD79867, (Mo. App. S.D. 2017).
  2. Wilhoit v. Fite, 341 S.W.2d 806 (Mo. 1960).
  3. Matthews v. Turner, 581 S.W.2d 466, 472 (Mo. App. S.D. 1979).

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