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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

Yes, most likely. In re Estate of Horton, Docket No 362550 (Mich Ct App May 25, 2023) (unpublished).

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In Horton, the Michigan Court of Appeals explores the nuisances of an undue influence claim and when the presumption of undue influence can be triggered. Undue influence is a claim that can void a legal transaction if it is proven that the “grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against his inclination and free will.” But because undue influence does not tend to happen in plain sight with witnesses, the law presumes a person was unduly influenced if there is “(1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary, or an interest represented by the fiduciary, benefits from a transaction and (3) the fiduciary had an opportunity to influence the grantor's decision in that transaction.”

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Carolynn Horton was a widow with two surviving sons. After her husband’s death, Carolynn named her caretaker turned friend as beneficiary of a $200,000+ IRA account she inherited at her husband’s death. Carolynn’s sons challenged the IRA beneficiary designation on the basis it was the product of the caretaker/friend’s undue influence. The probate court dismissed the case on summary disposition grounds on the legal basis that the caretaker/friend was not in a “confidential or fiduciary relationship” with Carolynn, meaning there was no presumption of undue influence, and that the sons would be unable to meet their evidentiary burden to prove undue influence.

The Court of Appeals held the probate court erred in dismissing the case because there was a genuine issue of material fact as to whether the caregiver was in a confidential or fiduciary relationship with Carolynn: “Here, there was record evidence that Carolynn entrusted defendant with paying all of her bills and added defendant to her checking account to facilitate this task. Accordingly, defendant was authorized to write and sign checks from this account without needing any further permission from Carolynn. Moreover, defendant was entrusted with Carolynn's Social Security number and assisted Carolynn with the process of rolling over [her husband’s] retirement account funds into a newly created IRA. Defendant's assistance with respect to the IRA included suggesting to Carolynn what bank to go to for a newly created IRA, helping with paperwork, driving Carolynn to both meetings at the bank, and sitting through most, if not all, of these two meetings. &nbsp;A jury could reasonably find from this evidence that there was a confidential or fiduciary relationship between Carolynn and defendant based on the trust and confidence Carolynn placed in defendant with respect to her financial affairs.”

As a result, the case will return to the probate court and be set for a trial unless otherwise resolved between the parties before trial. Undue influence cases are challenging to prove, and the presumption of undue influence is a key component in whether the case will be successful.

If you have questions about undue influence claims or about another probate legal matter, please contact Laura Morris at <a href="mailto:lmorris@wnj.com" target="_blank" rel="noreferrer noopener">lmorris@wnj.com</a> or 616.752.2407 or a member of the Probate Litigation Practice Group.

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Laura E. Morris

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Undue Influence Claims: Does Assisting an Elderly Person with Their Finances Create a Confidential/Fiduciary Relationship?

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Undue Influence Claims: Does Assisting an Elderly Person with Their Finances Create a Confidential/Fiduciary Relationship?

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