Wealth Law Blog : Oregon Asset Protection Lawyers & Attorneys : Samuels Yoelin Kantor Seymour & Spinrad Law Firm : OR Estate Planning, Fiduciary Litigation

From time to time we publish summaries of interesting trust and estate cases.

In today’s post we discuss a recent Oregon Appeals Court case that addressed the availability of a constructive trust to remedy a breach of duty by a successor trustee. The case is a good illustration of the legal remedies available to beneficiaries who pursue claims against trustees behaving badly.

Olson v. Howard, 237 Or App 256, 239 P.3d 510, (2010)

Background: Plaintiff, the beneficiary of a trust, brought an action against the trustee and the purchaser of land from the trust, alleging that the purchase was the result of self-dealing by the trustee. The settlor of the trust had named himself trustee and appointed Howard as successor trustee. Howard, purporting to act as successor trustee, sold the property to his son, the defendant, for $55,000. Plaintiff contended that the fair market value of the property was actually $122,760. Moreover, defendant borrowed the money to purchase the property from his father, Howard. Seven years after the sale, plaintiff filed claims against both defendant and Howard, alleging that Howard acted unlawfully when he essentially sold the trust property to himself for grossly inadequate consideration, and that defendant knowingly and willfully acted as a strawman in the transaction. Plaintiff then sought return of the property to the trust, a resale of the land, and distribution of the proceeds of that sale to the trust beneficiaries. The trial court dismissed the case after finding that plaintiff failed to provide an “objectively reasonable” basis for his claim. 

Holding: The trial court erred in determining that plaintiff’s contentions were devoid of factual and legal support. Plaintiff’s claim sought the imposition of a constructive trust, which would be available to him upon showing that the defendant possessed property that should belong to the trust as a result of the property being transferred without authority, by a self-interested party, and without sufficient consideration. Moreover, the fact that plaintiff had signed a release as a trust beneficiary relinquishing all claims against the trustee or trust did not prohibit his claim, as the release did not bar claims against the defendant. The case was remanded to the lower court.

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From time to time we publish summaries of interesting trust and estate cases. Today’s post concerns promises made (and then broken) as part of a divorce settlement. The Oregon Supreme Court overturned a 2009 decision of the Appellate Court and, in the process, established new guidelines that should be considered by all parties – and their legal counsel – when preparing divorce settlements, pre-nuptial agreements, and/or child support arrangements.

Tupper v. Roan, 227 Or App 391, 206 P.3d 237 (2009) (Reversed, See Below)

Background: As part of a divorce decree, the decedent promised to obtain a life insurance policy of $100,000 for the benefit of his child. The divorce decree included a provision that called for a constructive trust to be created over “the proceeds of any insurance owned by either party at the time of either party's death if either party fails to maintain insurance in said amount, ($100,000 fbo the child) or if said insurance is in force but another beneficiary is designated to receive said funds.”

Decedent obtained a $600,000 life insurance policy naming his girlfriend as the primary beneficiary. The decedent died several months after purchasing this policy. The ex-wife sued the girlfriend asking the court to impose a constructive trust on the portion of life insurance ($100,000 of the $600,000) that decedent promised to obtain in the divorce decree. The trial court held that $100,000 of the insurance proceeds was subject to a constructive trust.

Holding: The Court of Appeals reversed, holding that the trial court should instead have awarded summary judgment to defendant. The Appeals Court concluded that, “to prevail on an unjust enrichment theory against the person who had been named as the decedent's beneficiary, a plaintiff must prove both (1) that, by designating another person as his or her beneficiary, the decedent essentially gave that person property that previously had belonged to the plaintiff; and (2) that the person named as beneficiary either knew or should have known of the wrongfulness of the decedent's action.” The plaintiff had not and could not produce evidence that would satisfy the first requirement.

Tupper v. Roan, 349 Or. 211,243 P.3d 50 (2010)

Background: The Oregon Supreme Court reviewed Tupper v. Roan to consider whether and how the equitable concepts of unjust enrichment and constructive trust should be applied in the context outlined above. The Court declined to adopt the two-part test applied by the Appeals Court and instead set out the following three elements that the ex-wife had to prove in order to prevail on her unjust enrichment claim:

• First, she had to show that a property interest that rightfully belonged to her was taken by the girlfriend under circumstances that in some sense were wrongful or inequitable.
• Next, she had to show that the girlfriend was not a bona fide purchaser for value and without notice.
• Finally, she had to establish, with "strong, clear and convincing evidence," that the insurance proceeds, i.e., the property upon which she sought to impose a constructive trust, was in fact the very property that rightfully belonged to her, or was a product of or substitute for that property.

Holding: Justice Gillette began his analysis with the observation that, “When ‘the law employs a constructive trust, the doctrine of unjust enrichment governs generally all of the substantive rights of the parties.’” He next traced the common law doctrine of unjust enrichment and constructive trust as applied by the Oregon Supreme Court, and noted that the common thread was the acquisition or retention of property in a way that is in some sense wrongful, even if the one holding the property (here, the girlfriend) was not directly involved in wrongdoing. The Court then focused on the language of the stipulated divorce decree, which included the phrase, "a constructive trust shall be imposed over the proceeds of any insurance owned by either party at the time of either party's death." (emphasis added by the Court). The court evaluated where the property interest created by this language fell relative to two hypotheticals. In the first hypothetical, the divorce decree identified a specific policy that was in force at the time the decree was entered. The Court felt this scenario would create a protectable property right for the ex-wife. In the second scenario, the hypothetical decree language did not identify an existing insurance policy, rather it included a promise to take out insurance at some future time. The Court felt that while such language might not be sufficient to create a property right that belonged to the ex-wife, that issue was not before the court in this case.

Instead, the Court concluded that in this case the decree expressly contemplated a failure on Tupper's part to carry out the obligation and that the parties intended to impose a constructive trust on any policy owned by Tupper. The Court concluded that the decree language gave the ex-wife an interest in the insurance proceeds held by the girlfriend and overturned the Appellate Court decision. In the process, the Supreme Court has provided estate planning and family law attorneys with important new guidelines for assessing cases and drafting decrees. The Supreme Court ultimately remanded Tupper for further analysis of whether the girlfriend knew of the decedent's support obligation.
 

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From time to time we publish summaries of interesting trust and estate cases. Today’s post examines a recent Oregon Appeals Court decision in the rapidly expanding field of elder law. The case involves an elderly woman with impaired mental capacity and asks whether she may be a considered a third-party beneficiary (under contract law) of a residency agreement signed on her behalf. The case also touches on the issue of arbitration clauses in residency agreements at senior housing facilities. Arbitration clauses like the one at issue in this case have been the subject of a number of recent 9^th circuit cases.

Drury v. Assisted Living Concepts, 245 Or App 217 (2011)

Background: Dorothy Drury was suffering from dementia and her mental capacity was severely impaired at the time her son, Eddie, admitted her to the defendant’s assisted living facility. Eddie signed the facility’s admission paperwork and residency agreement. At that time he was not yet Dorothy’s guardian or conservator and did not then have a power of attorney for her.

The residency agreement included a clause requiring arbitration for all claims or disputes relating to the agreement or the services provided “to You by Us.” After about a year in the facility, Dorothy died as a result of injuries sustained in a fall. Her estate’s personal representative sued the facility for wrongful death resulting from negligent conduct. The defendants (unsuccessfully) moved to compel arbitration, arguing that the estate was bound to the arbitration clause in the residency agreement as a third-party beneficiary of the contract.

On appeal, the court held that Dorothy’s estate was not bound to the agreement and its arbitration clause. Under general contract law principles, a third-party beneficiary is presumed to assent to a contract when it accepts benefits or otherwise seeks to enforce rights under that contract. Dorothy was a “third-party donee beneficiary” of the residency agreement signed by her son. The critical issue for the court was Dorothy’s mental capacity - or lack thereof. Even though Dorothy accepted the contract’s benefits (the facility’s services and apartment), her lack of requisite mental capacity meant that her acceptance of benefits did not ratify the contract.

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From time to time we publish summaries of interesting trust and estate cases:

Butcher v. McClain, Oregon Court of Appeals, July 13, 2011

Mom and Dad executed wills leaving the farm to their adult son and other property to their adult twin daughters (defendants in the case).   After Dad died, the son married and moved with his wife and five children (collectively the plaintiffs in this case) into a mobile home placed on the farm.  Mom then executed a new will which directed the farm to go to her son and the plaintiffs.

The son died in a 2005 auto accident. Shortly after, the defendants began to “harass” the plaintiffs, and prevented them from seeing Mom. A few months later Mom had a stroke. The defendants got a power of attorney for Mom, obtained a default judgment evicting plaintiffs from the farm, and burned down the mobile home. Unbenownst to plaintiffs, Mom executed new legal documents, including a new will, before she died.

Plaintiffs filed suit with several claims, but the trial court granted, without discussion, defendants’ motion to dismiss all claims. This included barring the tortious interference claims due to filing outside of the two-year statute of limitations in Oregon. 

The Court of Appeals separated plaintiffs’ interference claim into two types: defendants interfered by causing Mom to (1) evict plaintiffs from the farm; and (2) disinherit plaintiffs in the June 2, 2005 will. On the first type of interference, the court found that the claim accrued on the date of the eviction, which was more than two years prior to plaintiffs’ filing of the claim and thus correctly barred by the statute of limitations. 

The court disagreed, however, with the trial court’s determination that the second interference accrued on the date the last will was executed, ruling “although the alleged interference occurred when defendants caused [Mom] to execute a will disinheriting [the plaintiffs], plaintiffs were not damaged by that disinheritance until [Mom's] death, when they lost their expected inheritance” and thus the claim was timely filed within the two-year statute of limitations."

This is a fair result - otherwise Bad Actors would escape legal consequences for tortious interference with prospective inheritance if the will does not come to light within two years of their misdeeds.

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Your will determines what your loved ones will inherit or what your unloved ones will not inherit, right?  

Well - not always.  

The nine community property states in the West and Southwest can somewhat protect a spouse’s interests and the remaining states (including Oregon) have some version of a statutory “elective share” or “election against the will” provision.  Those laws may provide some protection to the spouse, regardless of the will. 

But the children you leave behind don't have such statutory protection in the U.S.  Absent findings of undue influence, mistake, or legal obligations (such as in the case of child support), a court will generally uphold a will that expressly disinherits the testator’s child. (Note that Louisiana’s civil law system is the exception here and some states’ homestead laws do protect children under age 18 from the loss of a family residence.)

But let's look at England - where it's more of a challenge to disinherit your children.  Based on the Inheritance (Provision for Family and Dependents) Act of 1975, English law identifies a class of people who can challenge an estate’s disposition of property by claiming they did not receive a “reasonable financial provision.” The class of potential challengers includes current and former (non-remarried) spouses, certain cohabiters, children (adult or minor, natural or stepchildren), and certain other persons who were “being maintained, either wholly or partly” by the deceased. “

 A recent case from the England and Wales Court of Appeal, Ilott v. Mitson, [2011] EWCA Civ 346, drew attention for its facts as well as the court’s discussion of what “reasonable provision” means.

Melita Jackson died in 2004 at age 70, leaving a residual estate of about £486,000 to three animal and wild bird protective charities.  In both her will and an accompanying letter, Melita expressly disinherited her only child, then 47 year-old Heather. Melita and Heather had been estranged since Heather left home some thirty years prior. In the interim, Melita had not provided any financial support and disapproved of Heather’s subsequent marriage and decision to have five children.

Heather challenged her mother’s will under the Inheritance Act, and a district judge awarded her £50,000 as a “reasonable provision.” When Heather asked for a larger amount, the three charities cross-appealed, and the reviewing judge knocked Heather’s share down to £0.  The Court of Appeal found the total disinheritance to be "unreasonable" and reversed the decision, remanding the case back to (a new) judge for determination whether the £50,000 should be increased. 

I'm sure the charities thought that ruling was for the birds. 

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From time to time we publish summaries of interesting trust and estate related cases:

McIntire v. Lang, Oregon Court of Appeals, March 16, 2011

Prior to her death, McIntire and her ex-husband entered into a stipulated dissolution judgment, the terms of which stated each party must immediately purchase a life insurance policy on his or her life in the amount of $250,000 and name the other party as trustee for the benefit of their child and for the purpose of securing the payment of their support obligations. The judgment further stated that, in the event that either party violated the insurance provision, a constructive trust would be imposed over that party’s estate. McIntire obtained an insurance policy shortly after the judgment; however, she later allowed the policy to lapse. McIntire died without a will, and under the laws of intestate succession, her surviving husband was to inherit 50% of her estate, and her two children were each to inherit 25%.

The respondent, McIntire’s ex-husband, notified McIntire’s personal representative that he had a $250,000 claim against the estate based upon the dissolution judgment. The petitioner, McIntire’s surviving husband, objected to the respondent’s claim, arguing that under the terms of the dissolution judgment, McIntire was required to buy life insurance only “for the purpose of securing the payment of support obligations.” Because the judgment did not provide for child or spousal support, he asserted that there were no support obligations to secure, and thus McIntire was not required to obtain the insurance. The lower court issued a limited judgment in favor of the respondent and imposed a constructive trust over the assets of McIntire’s estate in order to secure payment of the life insurance obligation.

On appeal, the petitioner assigned error to the probate court’s imposition of a constructive trust on the basis that the respondent lacked a property interest in McIntire’s estate because the dissolution judgment did not require McIntire to obtain life insurance. The court began by recognizing that, when a constructive trust is imposed, the doctrine of unjust enrichment governs the rights of the parties, and order to prevail on this type of claim, a party seeking a constructive trust must show that: 1) a property interest rightfully belonging to him was taken by someone else under circumstances that were wrongful or inequitable, 2) the person who now possesses the property is not a bona fide purchaser for value without notice of the claimant’s interest in the property, and 3) the property in the hands of the person is the very property that belongs to the claimant or is a substitute for that property.

The first issue the court considered was whether the respondent had a property interest in McIntire’s estate. Prior case law had already established that, when a settlement agreement incorporated in a dissolution judgment provides for a constructive trust in the event that one of the parties fails to abide by an obligation to maintain life insurance naming the other party as the beneficiary, the agreement vests a property interest in the object of the constructive trust to the other party. Based on this prior ruling, McIntire’s estate was one of the objects of the constructive trust.

The remaining issue was whether the dissolution judgment obligated McIntire to obtain life insurance. According to the court, the insurance requirement was not intended to secure support obligations imposed in the dissolution judgment, but rather to secure the general obligation that all parents have to their children. In support of this determination was the fact that the judgment specifically provided that neither party would pay child or spousal support, and thus the insurance provision would have no effect if interpreted to secure only payment of support ordered in the judgment.

Finally, the petitioner argued that the respondent had failed to protect his rights, as he did not comply with the terms of the dissolution judgment, which required that he deliver a copy of the judgment to the insurance company that issued McIntyre’s policy. The court determined that, while “equity does not favor those who sleep on their rights,” this equitable defense did not apply, as it was contrary to public policy. That is, Oregon law furthers a policy of ensuring that divorced parents provide financial support for their minor children. It would be contrary to public policy to refuse to enforce a dissolution judgment in this circumstance.
 

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Joint bank accounts come in several shapes and sizes and can be used for a number of purposes, including use by couples to manage their finances, use by adult children and their parents when mom or dad needs help paying monthly bills, and use by parents and their minor children when teaching the kids the basics about money. However, such accounts can step into complicated legal areas related to property law, questions of donor intent, and potential exposure to gift tax.

One of the most common ways that two or more people can legally own property together is through joint tenancy. Joint tenants share equal ownership of the underlying property and have the equal, undivided right to keep or dispose of the property.  Joint tenancy carries with it a right of survivorship, meaning that when one joint tenant dies, his or her property interest is extinguished and title to the underlying assets passes directly to the other joint tenants.

Joint bank accounts carry with them many of the characteristics of the joint tenancy and it is crucial depositors pay attention to these principals when opening their accounts, including a consideration of whether the joint bank account will include a survivorship provision.

This issue was addressd in a recent Washington Court of Appeals case, Taufen v. Estate of Kirpes.

In Kirpes, the court was presented with a joint bank account shared by a decedent and her friend that included a survivorship provision. The estate argued that the decedent did not intend for the account to include this provision, and that it was unilaterally added by the bank representative upon the opening of the account. The court explained that there was a rebuttable presumption that survivorship was intended when joint bank accounts were opened, and in this case the presumption was eliminated by clear and convincing evidence of contrary intent. The court looked at the the fact that the decedent was never asked about the survivorship provision, that it was added unilaterally by the employee, and that the decedent had only instructed the banker that she wanted to “open up a joint account.”

The outcome in Kirpes was a victory for the decedent’s estate in one sense, as the account was included as an asset of the estate. On the other hand, the Court of Appeals decision was announced over four years after the account owner died, so the account proceeds were unnecessarily tied up for 50 months and the estate incurred the legal fees associated with proceedings at both the trial and appellate courts. These costs and delays could have been avoided had the depositor been aware of her options (and of how to elect them) at the time the account was opened.

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Who do you trust to handle your financial affairs when you are gone?  Your first instinct may be to name a spouse or another family member, but sometimes we advise our clients to seek professionals to handle these duties - particularly with estates that own hard-to-value or unusually complex assets. The reason? This fiduciary (who may be called a personal representative, executor, or trustee, depending on the nature of the estate) may need to develop complex financial statements and tax returns, manage or oversee businesses, properties, or other investments, work in the center of emotionally-charged disputes, and/or be responsible for initiating legal proceedings on behalf of the estate.  So make sure you pick the right person for the job.    

The Washington Court of Appeals recently ruled on a case that outlined several of the responsibilities of a personal representative. In the case of In re Wegner v. Tesche, the court was presented with a parcel of property that was owned by the decedent and the appellant (Tesche) and which may or may not have included a survivorship provision. The property was the only substantial asset in the estate. The personal representative brought an action against the appellant to acquire title to the property in the name of the estate and later dismissed the claims against the appellant when the representative determined that the estate was not likely to prevail. The representative then sued the appellant for a portion of the fees incurred in researching the initial claim. The superior court awarded a portion of these fees and the court of appeals affirmed the lower court decision.

The Washington Court of Appeals reasoned that, as the personal representative of the estate, an individual has the obligation to pursue any and all property that may be included in the decedent’s estate. Here, there was some question as to the ownership of the parcel of land and, since the questions were based on legitimate concerns and on comments made by the decedent about the land, the representative had a duty to pursue the issue. The court then used its power to create an equitable remedy awarding some of the fees.

Your fiduciary has many obligations.  Choose accordingly - and please, please, PLEASE let them know the reputable and capable law firm that should guide them through the process.  Get a good team together to help your fiduciary properly shoulder the responsibilities.      

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Is this where my future as a fiduciary, trust, and estate litigator is headed?  Do I need to get an agent and print up some 8 X 10 glossy publicity photos?  

Recently a casting call was issued in the New York area for a new reality series called "Estate Wars."  While I am simultaneously offended and excited about the concept, I'll let you form your own opinion as you read through the casting call:  

"Are YOU and YOUR RELATIVES arguing over a loved one’s Will? Do you need help resolving family conflicts and evaluating the worth of objects in the Estate?

Was your loved one’s Will vague– who should get what -- and you and your relatives can’t agree, we want to hear from you!!!

The Production Company behind “LA Ink” and “Storm Chasers” is casting real families in a life-changing new series.

Almost all family members MUST reside in the NY Tri-State Area and there must be objects of interest and varying degrees of value in the Estate."

Not only will we settle your estate nightmare, but you will receive compensation upon being a part of the show

Having been professionally involved in many family battles over money, power, and which child was the favored one while mom or dad was alive, I am morbidly curious to see how this show plays out.  Stay tuned. 

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Astonished Florida attorney David A. Shulman recently wrote on his blog about a sales pitch from a company that provided the paid services of "video wills," without the company providing any explanation that such videotaped wills are entirely inadmissible in Florida. 

That is, one cannot avoid the legal requirements for the execution of a valid will simply by saying on a video that they want Daughter Susie to have the house and Son Bobbie to have all of the personal property.  You must conform with the applicable statutory requirements.  

Accordingly, video wills are not an option - certainly not in Florida, nor in Washington or Oregon, where I practice.   (ORS 112.235:  "A will shall be in writing....."RCW 11.12.020(1) "Every will shall be in writing....")

Additionally, as a fiduciary litigator, let me caution against videotaping the execution of a handwritten will.  It may be seen as a way to ensure the person signing the will has the capacity to do so, and has not been unduly influenced to sign the document.  However, such evidence has the potential to backfire if the person signing the will makes an unusual statement or presents a mannerism that a judge or a paid expert could review - without knowing the person well - and find it as evidence to overturn the will.   

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A handwritten will may still be valid in a state that doesn’t normally recognize them, if you have the right facts. 

Many states (let’s label it “State A”) recognize that a will executed in a foreign state (“State B”), pursuant to the laws of State B when executed, can also be valid in State A. For example, see ORS 112.255(1)(c) and RCW 11.12.020. This can come into play when you are dealing with states that recognize holographic (handwritten) wills, like California, and states that do not recognize such wills, such as Oregon and Washington.

So do not be dismissive about a holographic will. Where was it executed? Did it comply with the statutory requirements for a valid will in the state in which it was executed? 

Domicile is another important issue when looking at a will. Domicile is not as simple as where somebody owns a home. Domicile, generally, means the place where a person resides and intends to remain permanently to the exclusion of other locations. To determine if there is a change in domicile, generally courts look to: (1) the decedent’s residence; (2) the decedent’s intention to abandon the prior domicile; and (3) an intention to acquire a new one.   

The reason domicile is important is that State A may recognize that a will executed pursuant to the laws of a different state of the decedent’s domicile at the time of execution, or domicile at the time of the testator’s death, is still valid in State A. Oregon and Washington recognizes this approach. ORS 112.255(1)(b); RCW 11.12.020. It’s important to note that it’s not an “and” test, it’s an “or” test, so look at both options, if applicable.  

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From time to time we will publish recent local cases or legislative bills:

Man murdered his mother, stepbrother, and his mother's boyfriend.  Jury found him not guilty by reason of insanity.  The mother's estate then received money from a wrongful death case.  In re Estate of Kissinger ruled the slayer could not inherit from his mother's estate because the Washington slayer statute applied and the slayer was treated as having predeceased his mother.  RCW 11.84.010.    

Comment:  It's good when the law aligns with common sense; just because the jury finds you not guitly by reason of insanity does not mean you still get to inherit for your misdeeds.   

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From time to time we will publish recent local cases or legislative bills:

Oregon Senate Bill 403

Senate Bill 403 makes a very small amendment to ORS 30.030, which deals with the dispersal of damages received from a wrongful death action. Originally the remainder of damages from a wrongful death claim could only be dispersed in a manner similar to intestate succession. Senate bill 403 amends ORS 30.030(5) to allow the remainder of damages to be dispersed in any way agreed by the beneficiaries or in a manner similar to intestate succession. 

This bill became effective on March 31, 2009.

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  From time to time we will publish local cases and legislative bills:

State v. Boyle, -- P.3d --, 2009 WL 1313755 (Or App)

Background: Fifteen years after the decedent’s death, the state of Oregon opened probate in order to attempt to collect approximately $80,000 worth of medical assistant payments the state made on the decedent’s behalf before his death. The personal representative disallowed the claim as untimely. The state filed a separate action based on the denial of their claim.

Holding: The only statute of limitation that applies to claims by the state against an estate for medical expense reimbursement is ORS 115.005(2)(a). This statutory provision only requires that claims be filed within 4 months of probate opening. Since the state did this, their claim was allowable.

Comment: 15 years? The state sure has a long memory. But if the claim had also been subject to some other statute of limitation (like 6 years for a contract claim), then the claim could be disallowed.
 

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QUESTION:  Does Grandpa have the mental capacity to sign his last will and testament, leaving you his very large estate and disinheriting your ungrateful, meddling, younger brother? 

ANSWER:  Depends on who you ask. 

When Grandpa has peacefully passed, without the ability to confirm his written intentions, you will argue he was as quick as a fox and sharp as a tack, until his very last breath.  Infuriated Brother will argue Grandpa was about two sandwhiches shy of a picnic.

The truth is somewhere in between, often leading to estate litigation. 

 There are generally four requirements for testamentary capacity: 

1. The person must be able to understand the act in which he or she is engaged (the execution of the will);
2. The person must know the nature and extent of his or her property (mind you, it need not be the specific dollar amounts or account numbers);
3. The person must know, without prompting, the claims, if any, of those who are, should be, or might be the natural objects of the person’s bounty (family members); and
4. The person must be cognizant of the scope and reach of the provisions of the document (not the full legalities of each clause - that's why you hire attorneys to prepare them in the first place).

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Were you Just Being Helpful in driving dearly departed mother to her attorney's office to sign her will - or were you Unduly Influencing her to prepare an invalid document? 

That may be just one of the many facts in the long and winding road of undue influence estate litigation where both sides can convincingly argue that the same facts prove their very different cases.

In Oregon, In re Reddaway’s Estate, 214 Or. 410, 421-427, 329 P.2d 886 (1958), identifies seven factors or guidelines that have been raised in undue influence cases:

1. Procurement. The beneficiary participates in preparing the will. This can cut both ways: Was it natural that mother asked the favored son to get estate documents together or was it an example of exerting undue influence?
    
2. Lack of independent advice.  A beneficiary who participates in preparing the will and has a confidential relationship with the testator has a duty to see that the testator receives independent, disinterested advice.  That is, it looks really bad when you take your feeble aunt to your attorney of 35 years, rather than her normal attorney or a truly neutral lawyer. 
3. Secrecy and haste. Was the will kept from family members who might otherwise have been the natural objects of the testator’s bounty, or done in secrecy and/or haste?  Yet again, it can cut both ways when it may be entirely natural that the ne’er-do-well child was not told of changes to the will, but the same child will argue mom "always" told him of her financial decisions.
4. Change in the testator’s attitude following close association with the beneficiary.
5. Change in the testator’s plan of disposing of property. Were there unexplained changes from previous wills or from intestate dispositions?  "Unexplained" is the key word.
6. An unnatural or unjust gift to the beneficiary as compared to those who otherwise would naturally be expected to take.
7. Susceptibility to influence. A testator who is physically sick, emotionally or mentally confused, or becomes dependent on the beneficiary is susceptible to influence.

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From time to time, we will publish blurbs on recent local court opinions and state legislation:

Brown v. Hackney, -- P.3d --, 2009 WL 1394832 (Or App 2009)

Background: Brother of the decedent, a beneficiary through intestate (without a will) succession, challenged the payment of the personal representative from funds acquired through the settlement of a wrongful death action initiated by the personal representative.

Holding: The personal representative may be compensated based on the proceeds of a wrongful death settlement. ORS 116.173 bases personal representative compensation on the “whole estate” which is greater than the intestacy “estate.” The decedent’s “whole estate” is “comprised of all property both within the jurisdiction of the probate court as well as property outside the jurisdiction of the probate court.”

Comment:  This fight was over an amount of $5,200.  $5,200!  Really!?!  Can't we negotiate matters like grownups, instead of taking them up to the court of appeals? 

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From time to time, we will publish blurbs on recent local court opinions and state legislation: 

Harris v. Jourdan, 218 Or App 470, 180 P.3d 119 (2008)

Background: Will contest involving a decedent that executed multiple wills. Each will was a drastic departure from the previous will. One beneficiary of a previous will challenged the probate of the most recent will based on undue influence. Will proponent claimed that beneficiary of prior will did not have standing to challenge the will because she, in fact, had procured the previous will through undue influence.

Holding: Beneficiary of prior will is not required to demonstrate that prior will could survive a will contest in order to have standing to contest the will that is currently in probate.

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