Challenging inter vivos transfers procured by undue influence: factors to consider.

• Author: Lannon, Patrick J.
• Position: Florida

Anyone who watches the evening news knows that Florida has more than its fair share of opportunists who take unfair advantage of the frail and elderly. When the unfair advantage takes the form of a coerced, yet facially valid transfer of assets by gift or bequest, the transfer often may be reversed as the product of undue influence.

Undue influence is often not discovered until the death of the transferor, leaving it to the rightful heirs and personal representatives to decide whether the facts justify a legal challenge. When the result of the undue influence is in the form of a contested will, the Florida courts have provided significant guidance that the heirs and personal representatives can consider in making their case. When the result of undue influence is an inter vivos transfer or gift, however, the courts have failed to clearly describe the various factors that tend to prove (or refute) an undue influence case.

While each case will always be decided on its unique facts, heirs and personal representatives who are aware of the generally applicable indicia of undue influence with respect to inter vivos gifts can tailor their review of suspicious transfers to determine whether actionable undue influence has occurred. (1) Equally important, rightful donees with an understanding of these factors can take care to structure a gift in a manner that will avoid later challenge.

To the extent that the implications of the various factors may be understood by the donee and by potential challengers, needless litigation may be avoided.

Definition of Undue Influence

Undue influence has been variously defined over the years. In one early Florida Supreme Court case, Newman v. Smith, 82 So. 236 (Fla. 1919), the court states that "[u]ndue influence comprehends overpersuasion, coercion, or force that destroys or hampers the free agency and will power of the testator." The court later expanded on this definition in In re Starr's Estate, 170 So. 620 (Fla. 1936):

To constitute undue influence the mind ... must be so controlled or affected by persuasion or pressure, artful, or fraudulent contrivances, or by the insidious influences of persons in close confidential relations with him, that he is not left to act intelligently, understandingly, and voluntarily, but ... subject to the will or purposes of another.

... The rule seems to be well settled that undue influence justifying the setting aside of a will, deed, or other contract must be such as to dethrone the free agency of the person making it and rendering his act the product of the will of another instead of his own. (Citation omitted.)

Presumption and Burden of Proof

In In re Estate of Carpenter, 253 So. 2d 697 (Fla. 1971), the Florida Supreme Court noted "[i]t is established in Florida that if a substantial beneficiary under a will occupies a confidential relationship with the testator and is active in procuring the contested will, the presumption of undue influence arises." The Carpenter presumption has been extended to inter vivos transfers. (2) Recently enacted F.S. [section]733.107(2) clarifies that the presumption of undue influence is a presumption shifting the burden of proof. (3) As a result, once the plaintiff has met the Carpenter presumption of undue influence, the burden of proving that undue influence did not take place is shifted to the beneficiary/donee. (4)

The standard of proof that must be met in an undue influence case is preponderance (greater weight) of the evidence. (5) The evidence considered is generally circumstantial--the Carpenter court "acknowledge[s] that undue influence is rarely susceptible of direct proof, primarily because of the secret nature of the dealings between the...