Undue influence occurs when an influencer uses improper influence (e.g., coercion, mind-poisoning, manipulation, threats) to cause the victim to execute a document that they would not have done, but for the undue influence. As a result, the challenged document or transaction reflects the wishes or intent of the influencer, rather than of the victim.
Undue influence is a real phenomenon, but it is difficult to prove because it typically occurs with only the influencer and victim present. By the time the document or transaction is discovered, the victim is likely deceased, and the influencer cannot be expected to admit anything. To somewhat level the playing field, Michigan law presumes that undue influence occurred if there is evidence that (1) the alleged influencer and victim were in a fiduciary or confidential relationship (2) the influencer had the opportunity to influence the victim and (3) the influencer received a benefit from the victim.
For purposes of the presumption of undue influence, a fiduciary relationship exists if the alleged influencer was serving as agent under durable power of attorney for the victim, prior to the execution of the challenged document. The agent under durable power of attorney is a powerful role that can potentially be abused to get the principal/victim to do something they do not want to do.
Assume that on the same date, the alleged victim signed both (1) the challenged document and (2) a durable power of attorney naming the alleged influencer as their agent. Does that durable power of attorney satisfy the fiduciary relationship prong of the undue influence presumption? The answer is no, assuming that this was the first time the alleged influencer was designated as the principal’s agent. The presumption of undue influence only comes to life if there is evidence that the alleged influencer occupied a powerful fiduciary role (capable of being abused) before the challenged document was signed. If the power of attorney is signed contemporaneous with the challenged document, it is not considered evidence that a fiduciary relationship existed before the challenged document was signed.
The Michigan Court of Appeals recognized this principle in In re Estate of Vernon Leroy Stephenson, Docket No 360453, 2023 Westlaw 3559578 (Mich Ct App May 18 2023) (unpublished). There, Kathleen executed a trust amendment in 2014 which benefited her daughter Christina. After Kathleen’s death, her son Randal challenged the validity of the amendment based on undue influence. The probate court ruled against Randal, finding no fiduciary relationship existed between Kathleen and Christina to give rise to a presumption of undue influence. On appeal, Randal pointed to Kathleen’s designation of Christina as her agent under durable power of attorney. The Court of Appeals disagreed with Randal: “[T]he new [durable power of attorney] and the Trust amendment were executed on the same date at nearly the same time; therefore, there was no existing confidential or fiduciary relationship [when the Trust amendment was signed].” Id at *20.
If you have a concern about the validity of an estate-planning document, contact David Skidmore at 616.752.2491 or email@example.com, or another member of Warner’s Probate Litigation Practice Group.