I was reading an article recently. It in part described a situation where one of Dad’s adult children said that Dad could not see his granddaughter anymore because the son was upset with Dad’s estate plan, but that Dad could see his granddaughter if he made some changes to the plan.
Undue influence is described in several different ways, including by statute and by case law. When are statements or discussions merely opinions, or influence, or persuasion, or even argument or disagreement, but not “undue” influence in nature? It’s not always easy to tell; but on other occasions it is obvious. You judge the above scenario using the below definition of undue influence. It sounds like undue influence, and quite possibly also elder abuse, if it meets the below criteria.
The following information is copied from my elder abuse presentation slides.
California Welfare & Institutions Code §15610.70 provides the following statutory definition of undue influence:
(a) “Undue influence” means excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity. In determining whether a result was produced by undue influence, all of the following shall be considered:
(1) The vulnerability of the victim. Evidence of vulnerability may include, but is not limited to, incapacity, illness, disability, injury, age, education, impaired cognitive function, emotional distress, isolation, or dependency, and whether the influencer knew or should have known of the alleged victim’s vulnerability.
(2) The influencer’s apparent authority. Evidence of apparent authority may include, but is not limited to, status as a fiduciary, family member, care provider, health care professional, legal professional, spiritual adviser, expert, or other qualification.
(3) The actions or tactics used by the influencer. Evidence of actions or tactics used may include, but is not limited to, all of the following: (A) Controlling necessaries of life, medication, the victim’s interactions with others, access to information, or sleep. (B) Use of affection, intimidation, or coercion. (C) Initiation of changes in personal or property rights, use of haste or secrecy in effecting those changes, effecting changes at inappropriate times and places, and claims of expertise in effecting changes.
(4) The equity of the result. Evidence of the equity of the result may include, but is not limited to, the economic consequences to the victim, any divergence from the victim’s prior intent or course of conduct or dealing, the relationship of the value conveyed to the value of any services or consideration received, or the appropriateness of the change in light of the length and nature of the relationship.
(b) Evidence of an inequitable result, without more, is not sufficient to prove undue influence.
In Ammerman v. Callender (March 24, 2016, Case No. G049880) the California Court of Appeal for the Fourth Appellate District was called upon to determine the extent to which the lower trial court could interpret the intent of the trustor and to change the terms of the trust to be in accord with the intent that the trial court determined. Below I have pasted relevant wording from the Appellate Court discussing the principles of the court’s ability to interpret the trust.
You should note that this is an appellate level court decision, other California appellate courts have issued decisions that are not necessarily entirely in accord, California Supreme Court decisions may differ and overrule this decision, and in significant regard, even when reading the below posted language, how far to interpret the trustor’s intent and the extent to which the introduction of extrinsic evidence will be allowed to express the trustor’s intent remain at the discretion of the trial judge.
Two principles do appear certain, (1) it is the intent of the trustor that should prevail, and (2) the court cannot rewrite the terms of the trust unless there is sufficient evidence, based on the wording of the trust or based on extrinsic evidence, or based on both, that the wording of the language in the trust is in conflict, or is ambiguous, or fails to address the present situation, or in some manner fails to express the trustor’s intent, and even in those circumstances the court cannot simply go ahead and rewrite the terms unless the evidence taken as a whole indicates that the trustor so intended the new terms.
It would logically also seem that the more radical the new or different terms are from the current terms of the trust, the greater the evidence would need to be that the trustor really, truly did intend the application of the new or different terms. Further, I continue to disagree with these being judge-determined cases – a jury trial should be available for the interpretation of intent and extrinsic evidence.
Below, at the bottom of this blog post, I have pasted relevant wording from the decision discussing principles of trust interpretation.
Dave Tate, Esq., San Francisco and California, tel.: (415) 917-4030, http://tateattorney.com, http://californiaestatetrust.com, http://auditcommitteeupdate.com, trust, estate, probate, real estate, conservatorship, power of attorney, elder and dependent adult, and business litigation; administrations guiding fiduciaries and beneficiaries; audit committees and D&O.
The following is relevant wording from the decision in Ammerman v. Callender.
This is an important new case, but you do need to read the facts and opinion carefully to determine whether your situation fits. Here is a pdf of the opinion Fenimore v. The Regents of the University of California.
It is arguable that this opinion expands the situations where an elder abuse claim can be stated.
For more than 20 years there has been a tug-of-war between ordinary negligence including medical or care malpractice on the one hand and elder abuse on the other hand. And that tension will continue; however, very slowly the courts are more often holding that elder abuse can be alleged in a medical or care situation where there are systemic deficiencies such as, for example, lack of staffing and inadequate training, particularly where those deficiencies violate a statutory duty, requirement or standard of care.
As the underlying opinion in Fenimore applies in the circumstance of systemic violation of a statutory duty, arguably this case, as it applies to elder abuse, could be cited in a whole host of care and other situations including but not limited to nursing homes, RCFE/assisted living, fiduciary care duties, fiduciary financial duties, and more.
Dave Tate, Esq. San Francisco and California – civil real property and business, trust, estate, conservatorship, power of attorney and elder abuse litigation, and helping fiduciaries and beneficiaries in administrations. http://californiaestatetrust.com, and audit committees and D&O http://auditcommitteeupdate.com.
I heard about this recently – a new situation is arising. I’m just telling you about it. The elder is living in a residential care facility for the elderly, sometimes referred to as a RCFE, or assisted living or board and care. The elder is paying with private money. The assets and money run out. The elder doesn’t have family, or the family doesn’t have money, or the family won’t pay for the elder. Medi-Cal will not pay for a RCFE. In the past, in some situations, going to a nursing home was a last resort as Medi-Cal will pay for the cost of the nursing home. In the past the referral to a nursing home might merely have needed a doctor’s signature. Increasingly, Medi-Cal or its agents or representatives are starting to evaluate whether the elder’s physical, medical or mental conditions actually qualify the elder to be in the nursing home. In other words, if it is decided that the elder’s conditions are not sufficiently bad to qualify the elder to be in the nursing home, Medi-Cal will not pay for the costs of the nursing home, and the elder either will not be allowed initially into the home, or the nursing home and Medi-Cal will want to discharge and force the elder from the nursing home. But in those situations the elder has nowhere that she or he can afford with private pay.
The California Fiduciaries Code of Ethics and the National Guardianship Association Standards of Practice provide requirements for professional fiduciaries, which are also helpful to guide non-professional fiduciaries. The following is a summary of the broad process for conservatee and fiduciary/conservator decision making in the Code of Ethics and the Standards of Practice – of course the Code of Ethics and the Standards of Practice contain much greater coverage of these topics and each situation much stand and be evaluated separately and by itself – the below discussion about informed consent, substituted judgment and best interest covers the broad process approach. I also find it interesting that I have never heard a discussion by a Court about this or a different process for conservatee and fiduciary or conservator decision making. Comparing this to board of director deliberations, perhaps this might, at least in small part, be analogized to the business judgment rule?
1. Informed Consent – The decision should first be made by informed consent if possible.
A person’s (the conservatee’s) agreement or decision to allow or to have something happen that is based on a full disclosure of facts needed to make the decision intelligently, i.e., knowledge of the risks involved, alternatives, etc.
In other words, the individual choice or decision by the conservatee, that the conservatee is capable of making, unless doing or allowing so would violate the fiduciary’s duties to the conservatee or impose unreasonable expense to the estate.
2. Substituted Judgment – Second, if informed consent cannot be obtained, the decision is made by substituted judgment if possible.
The principle of decision making that requires implementation of the course of action that comports with the individual person’s (the conservatee’s) known wishes expressed before incapacity, provided the conservatee was once capable of developing views relevant to the matter at issue and reliable evidence of those views remains.
In other words, the decision is made or action taken or not taken, by the fiduciary, based on the ascertained desires and wishes, if any, of the conservatee, as expressed or demonstrated by the conservatee while the conservatee had capacity to so express or demonstrate, relevant to the current subject matter at issue, unless doing or allowing so would violate the fiduciary’s duties to the conservatee or impose unreasonable expense to the estate.
3. Best Interest – If informed consent, first, and substituted judgment, second, are not available or possible, the decision is made based on best interest.
The course of action that maximizes what is best for a person (the conservatee) and that includes consideration of the least intrusive, most normalizing, and least restrictive course of action possible given the needs of the conservatee.
Just a short note of interest. On Thursday I attended the monthly San Mateo County Bar Association Estate Planning and Probate Section monthly seminar luncheon. This one was about health, education, maintenance and support payment provisions in trusts. A very good discussion and good speakers. The handout materials were excellent. In particular the speaker from Trust and Fiduciary Services at Boston Private Bank & Trust Company gave an excellent discussion as she related the materials to actual cases and situations. These provisions can raise challenging issues for trustees, including, for example, how to gather information about and evaluate whether to pay for a particular expense based on what the expense, activity or event is, the trust wording and trustor intent, other options available, the beneficiary’s resources and needs, and the other assets in the trust and the other beneficiaries. These situations can lead to litigation and trustee liability. Risk management, due diligence, and various prudent options for handling these situations should be considered.
I have provided below a link to a discussion and a service by Carolyn Rosenblatt for investment advisors in situations where the mental capacity of an elder client might be questioned, and in situations of possible undue influence or elder abuse. As you might know, investment advisors have been encouraged to enact policies and processes for these situations. There might be additional legislation in this area later this year, or at least legislation relating to advisor fiduciary duty. Please click on the below link, and then also click on the additional link at the bottom of that page to view the 10 step video. These policies and processes are good ideas and are needed – and they might arguably also already be legally required under standard of care, prudent due diligence, and elder abuse reporting requirements.
As I have previously posted, however, the designated helper also will need to know an attorney that she or he can contact to remedy the situation through the court system. Reporting to adult protective services or the police in appropriate situations might or might not provide emergency relief, but APS and the police do not have the people, time, and expertise resources to pursue a case through the legal system. And here is a link to my elder abuse and protection presentation slides http://wp.me/p1wbl8-dm
Here is the link to Carolyn’s discussion
Thanks. Dave Tate, Esq., San Francisco and California
I’m passing this along – a brief discussion on JD Supra. There are more gun trust changes on the way in July 2016. Gun trusts have become more common – but the requirements also need to be followed. Here is a link to the discussion CLICK HERE
Dave Tate, Esq., San Francisco and throughout California, trust, estate, power of attorney, conservatorship and elder abuse litigation and contentious administrations, http://californiaestatetrust.com
I am seeing more situations where the elder abuse criteria of California Probate Code Section 259 are applicable or could become applicable to disinherit the abuser.
In the circumstances listed below Section 259 disinherits a person who is found to have committed elder abuse. However, Section 259(c) also in relevant part states: “This section shall not apply to a decedent who, at any time following the act or acts described in paragraph (1) of subdivision (a), or the act or acts described in subdivision (b), was substantially able to manage his or her financial resources and to resist fraud or undue influence within the meaning of subdivision (b) of Section 1801 of the Probate Code and subdivision (b) of Section 39 of the Civil Code.” Thus, in these situations it might be argued that Section 259 is not applicable in its entirety.
Based on situations that I am seeing, the applicability of Section 259 also may raise other issues that the statute might not address, including, for example, when (how long ago – what if it was 5-10 years ago, for example) did the elder abuse occur, what if the decedent elder and the abuser reconnected and the decedent elder legitimately and without undue influence really wanted the abuser to inherit, what if the decedent elder subsequently executes a new will or trust that includes a representation by the preparing attorney or a qualified psychologist stating that the elder is competent and not subject to abuse at the time that the subsequent new will or trust is executed (although this situation might be addressed by Section 259(c)), what if it can be established by clear and convincing evidence that the abuser really did subsequently rehabilitate and helped or provided significant assistance to the decedent elder, and whether the legislature intended the statute to include some criteria for the severity of abuse?
In everyday life the above issues and situations are not necessarily unusual although they might not be addressed by the relatively simplistic wording of Section 259. These can be problems where the Legislature enacts a statute with good intent and for good purpose but possibly lacking in detail – the result can create legal and enforceability issues for both people who wish to enforce the statute and for people who believe that it shouldn’t apply under the circumstances of the case.
Section 259 provides as follows:
“259. (a) Any person shall be deemed to have predeceased a decedent to the extent provided in subdivision (c) where all of the following apply:
(1) It has been proven by clear and convincing evidence that the person is liable for physical abuse, neglect, or financial abuse of the decedent, who was an elder or dependent adult.
(2) The person is found to have acted in bad faith.
(3) The person has been found to have been reckless, oppressive, fraudulent, or malicious in the commission of any of these acts upon the decedent.
(4) The decedent, at the time those acts occurred and thereafter until the time of his or her death, has been found to have been substantially unable to manage his or her financial resources or to resist fraud or undue influence.
(b) Any person shall be deemed to have predeceased a decedent to the extent provided in subdivision (c) if that person has been convicted of a violation of Section 236 of the Penal Code or any offense described in Section 368 of the Penal Code.
(c) Any person found liable under subdivision (a) or convicted under subdivision (b) shall not (1) receive any property, damages, or costs that are awarded to the decedent’s estate in an action described in subdivision (a) or (b), whether that person’s entitlement is under a will, a trust, or the laws of intestacy; or (2) serve as a fiduciary as defined in Section 39, if the instrument nominating or appointing that person was executed during the period when the decedent was substantially unable to manage his or her financial resources or resist fraud or undue influence. This section shall not apply to a decedent who, at any time following the act or acts described in paragraph (1) of subdivision (a), or the act or acts described in subdivision (b), was substantially able to manage his or her financial resources and to resist fraud or undue influence within the meaning of subdivision (b) of Section 1801 of the Probate Code and subdivision (b) of Section 39 of the Civil Code.
(d) For purposes of this section, the following definitions shall apply:
(1) “Physical abuse” as defined in Section 15610.63 of the Welfare and Institutions Code.
(2) “Neglect” as defined in Section 15610.57 of the Welfare and Institutions Code.
(3) “False imprisonment” as defined in Section 368 of the Penal Code.
(4) “Financial abuse” as defined in Section 15610.30 of the Welfare and Institutions Code.
(e) Nothing in this section shall be construed to prohibit the severance and transfer of an action or proceeding to a separate civil action pursuant to Section 801.”
Probate, trust, estate, will, elder abuse, real property, power of attorney, conservatorship, Probate Court, and contentious administration related disputes, conflicts and litigation; and mediator and dispute resolution services. http://Californiaestatetrust.com. Note, I am posting future posts to http://tateattorney.com 