Circumstantial Evidence Established “Presumption” That Beneficiary Exerted Undue Influence on Decedent

A presumption of undue influence was created, according to the Michigan Court of Appeals, where circumstantial evidence showed that a beneficiary of the decedent’s amended will and trust 1) had a fiduciary relationship with the decedent, 2) had the opportunity to influence changes to the will and trust, and 3) ultimately received the majority of the decedent’s estate.

In In re White Trust (Docket Nos. 338008 and 338009), the decedent was the father of the petitioners, James, Bruce, Jeff and Doug White, and was the father of the respondent, David White. The decedent’s original will and trust devised his estate equally to all five sons. When a “contentious divide grew between the family,” the Oakland County Probate Court appointed David as co-trustee. Shortly afterward, the decedent amended his will and trust (the 2013 Amendment) to give 80 percent of his estate to David and 5 percent each to the petitioners.

When the decedent died, the petitioners filed this action to set aside the 2013 Amendment, claiming the decedent lacked testamentary capacity and that David had exerted undue influence on the decedent. The Oakland County Probate Court rejected the petitioners’ claims and granted summary disposition for the respondents.

The Court of Appeals reversed and remanded, finding there was an “abundant amount of circumstantial evidence” indicating that the 2013 Amendment was the product of David exerting undue influence on the decedent.

“Here, because the presumption existed, even if respondents provided rebuttal evidence, there was a factual question that could only be resolved at trial – whether the rebuttal evidence was sufficient in light of petitioners’ proffered evidence establishing undue influence,” the Court of Appeals said. “Thus, it was inappropriate for the probate court to grant summary disposition.”

Judges Brock A. Swartzle, Kathleen Jansen and Colleen A. O'Brien were on the panel that issued the per curiam decision.

Presumption Of Undue Influence

In its analysis, the Court of Appeals relied on Kar v Hogan, 399 Mich 529 (1976), overruled on other grounds by In re Estate of Karmey, 468 Mich 68 (2003). In Kar, the Michigan Supreme Court said a presumption of undue influence arises when there is evidence that: 1) a confidential or fiduciary relationship between the grantor and a fiduciary; 2) the fiduciary or an interest that he represents benefits from a transaction; and 3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction.

“Once the presumption is established, the party wishing to enforce the trust or will must offer other evidence to rebut the presumption,” the Court of Appeals explained.

Here, the Oakland County Probate Court ruled that the presumption of undue influence did not exist, the Court of Appeals said. “The probate court’s reasoning hinges on the idea that Decedent had to be in a confidential or fiduciary relationship with David at the time Decedent first expressed his desire to amend his estate plan rather than at the time Decedent actually created the 2013 Amendment. However, to give rise to a presumption of undue influence, the pertinent question is whether there was a confidential or fiduciary relationship between David and Decedent at the time the 2013 Amendment was created.”

According to the Court of Appeals, it was undisputed that David, as co-trustee, was in a fiduciary relationship with the decedent when the 2013 Amendment was executed. “The evidence also showed that David had the opportunity to influence Decedent’s decisions, as he was Decedent’s primary caretaker. Finally, David’s inheritance of a majority of Decedent’s estate based on the 2013 Amendment clearly meets the third requirement that he benefit from the transaction. Accordingly, the petitioners met all of the elements to establish a presumption of undue influence.”

The Court of Appeals noted the probate court seemed to believe - albeit incorrectly - that the petitioners had to offer direct evidence of undue influence. “[A]s the Michigan Supreme Court has held, ‘[u]nquestionably undue influence may be shown by indirect and circumstantial evidence, but it must be evidence of probative force beyond mere suspicion. …’ Here, there was an abundant amount of circumstantial evidence presented indicating that the 2013 Amendment was the product of David exerting undue influence upon Decedent.”

In conclusion, the Court of Appeals held that evidence of the decedent’s cognitive impairment and confusion, along with David’s threats and isolating the decedent, were circumstantial evidence that a jury could consider to find the 2013 Amendment was the result of David’s undue influence. “Although several witnesses … testified that Decedent did not appear to have been unduly influenced, when viewing the evidence in the light most favorable to petitioners, reasonable minds could differ on whether David exercised an undue influence over Decedent. Accordingly, the probate court erred in granting respondents’ motion for summary disposition.”

A motion for reconsideration was subsequently denied by the Court of Appeals.