Orlando Estate & Elder Law

Is That Influence Undue?

“The process of estate planning is only more painful if one spouse has already passed. In this situation, a surviving elderly parent may enlist the assistance of their adult children to manage and divvy up finances.”

Having adult children actively involved with their mother or father when the other spouse has passed is a blessing.  However, sometimes too much of their influence can create unwanted and burdensome legal problems, especially if a parent is having diminished mental capacity. In an article from Caring.com, “How to Stay Respectful (and Legal) In Parents’ Estate Planning,” adult children are advised to consider that there is such a thing as too much influence, referred to as “undue influence” and every state has some kind of undue influence law that addresses this problem.

To prove that someone has exerted undue influence, a checklist is often used. Undue influence is considered to have happened when:

• The deceased person was susceptible to the undue influence
• The accused had the opportunity to influence the decedent
• The accused was influencing the decedent to gain favor
• The accused was in a position of trust and/or authority over the decedent

Notice that undue influence is far more than having more than one conversation with Uncle Ben about his wishes. Its focus is on manipulation—lots of it. It often happens in nursing homes and long-term care facilities, where someone will build trust with a senior person who is in a vulnerable state. An adult child would normally have this trust, especially if they are the key caretaker. Over time, the elderly parent becomes dependent on one child or one caretaker for daily care and then they become vulnerable to being manipulated.

Undue influence generally involves changes to the estate plan—sometimes many changes or sweeping changes in a short period of time. Other family members are often suddenly disinherited or a large cash transfer to the person takes place, with no prior discussion with other family members.

Speak with an elder law attorney if you are concerned that you (or a loved one) are being pressured to change your estate plan (or you see evidence of large amounts of money being transferred out of your loved one’s accounts). Elder financial abuse is often the result of undue influence and an experienced elder law attorney and the proper authorities will be able to help.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Caring.com (May 24, 2018) “How to Stay Respectful (and Legal) In Parents’ Estate Planning”

Tortious Interference or Undue Influence

The Texas Supreme Court recently had the opportunity to resolve a lower court split and determine whether or not a cause of action exists in Texas for tortious interference with inheritance rights. The court declined to do so.

If someone improperly convinces another person to change his or her will, then the people who are harmed as a result need legal remedies to undo that harm. For example, if an unscrupulous attorney convinces an elderly parent to change his or her estate plan to exclude the children and benefit the attorney, then the children need legal remedies.

The most common remedy is to go to probate court and make a claim of undue influence after the parent has passed away.

If the court finds that there was undue influence, then the changed estate plan can be disregarded in favor of an older one. Another possible remedy is filing a suit for tortious interference with inheritance rights.

Texas Supreme Court recently considered this issue as the Wills, Trusts & Estates Prof Blog discussed in "Unanswered Questions in Texas."

Instead of suing the estate in probate court, as is done in an undue influence case, in a tortious interference with inheritance rights, the person accused of improper influence is sued directly for the damages that he or she has caused.

Depending on the jurisdiction and the facts of the case, this is a cause of action that can be used instead of or in conjunction with an undue influence claim.

The Supreme Court in Texas was asked to determine whether the cause of action exists in Texas. Lower Texas' courts are split on the issue.

Instead of doing that, however, the court declined to do so.  It determined that where undue influence exists, a constructive trust is a sufficient remedy for damages.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Wills, Trusts & Estates Prof Blog (June 2, 2017) "Unanswered Questions in Texas."

Sounds Like a Made-For-TV Movie, Except It's Real!

A former mob informant received a $100 million inheritance from a widow in New York. Questions abound about what happened.

Details about the life of Alben Sagan, known as "The General," are sketchy. There is a good reason for that. Alben Sagan is not the man's birth name. It is the name that federal authorities gave him when he entered the witness protection program.

It is known that Sagan was formerly a military officer in Eastern Europe who informed the government about many mob-related crimes and was put into witness protection and given a new life in Wisconsin as dna info reported in "How a Mob Informant Who Left Witness Protection Got $100M From a Widow."

Sagan was apparently not happy with his new life and at some point returned to New York City. In 2008 he showed up at the home of Lee Power, a wealthy widow, to ask about renting an apartment in one of her many properties. Soon after that Sagan became Power's driver.

However, their relationship grew from there and eventually Sagan controlled every aspect of Power's businesses.

When she passed away in 2014, it was discovered that her estate plan had been changed to leave almost everything to Sagan. Under the new estate plan he would receive approximately $100 million in assets.

Power's family has challenged the validity of the estate plan claiming undue influence. They appear to have good grounds for the claim.

Your estate may not qualify as a Drama of The Week.  For updates on all topics related to estate planning and elder law in Central Florida, please visit my website and sign up for my informative e-newsletter.

Reference: dna info (Sept. 20, 2016) "How a Mob Informant Who Left Witness Protection Got $100M From a Widow."

Redstone Final Chapter???

Even after an agreement was reached between Sumner Redstone and Viacom’s CEO over control of the Redstone trust, Redstone’s granddaughter remained as a last hurdle to pass for control of the trust to go to Redstone’s daughter. Now, the granddaughter has also agreed to settle the dispute.

Recently, media mogul Sumner Redstone and his daughter Shari Redstone reached an agreement with Philippe Dauman to put an end to Dauman’s claim that Sumner Redstone was not competent to change the terms of his trust and that he had been unduly influenced by his formerly estranged daughter Shari to do so in her favor.

While that agreement ended most of the uncertainty concerning Redstone’s media empire, it did not end it all. Redstone’s granddaughter, Keryn Redstone, was still pursuing the matter.

Now, she too has reached an agreement, according to the Wall Street Journal in “Possible Accord Reached in Family Battle Over Sumner Redstone Trust.”

The settlement agreement is not yet finalized but in it the two sides have agreed to rewrite some terms of the trust to ensure Keryn Redstone that she will be treated fairly and equally along with Redstone’s other grandchildren. Keryn will also be allowed to meet with her grandfather for the first time since February 2016.

As long as talks between the two sides do not break down in the near future, this agreement should put an end to the challenges to Redstone’s competency that have plagued him this year for now and the foreseeable future. That should have investors breathing a sigh of relief.

For information on estate planning issues that might affect you in Orlando and all of Central Florida, please visit my website and sign up for my free newsletter on estate planning and other issues that affect individuals and their families.

Reference: Wall Street Journal (Aug. 26, 2016) “Possible Accord Reached in Family Battle Over Sumner Redstone Trust.”

Settlement in Redstone Case - Finally.

The messy fight between Sumner Redstone and Philippe Dauman appears to be over as a pretrial settlement agreement has been reached.

Earlier this year 93-year-old Sumner Redstone defeated a bid by an ex-girlfriend to have him declared mentally incompetent. That victory, however, did not stop Viacom CEO Philippe Dauman from initiating another legal challenge to have Redstone declared incompetent.

Dauman’s case rattled investors as it left the future of Redstone’s media empire in doubt. They can rest easier now as Redstone has won again.

The Los Angeles Times reports the story in “The Redstones' war with Viacom ends: Philippe Dauman resigns, Tom Dooley elected new CEO.”

It appears Dauman and the Viacom board members backing him realized they did not have the resources to successfully wage a protracted battle against Redstone. Thus, for the sake of the company, they

The messy fight between Sumner Redstone and Philippe Dauman appears to be over as a pretrial settlement agreement has been reached.

Earlier this year 93-year-old Sumner Redstone defeated a bid by an ex-girlfriend to have him declared mentally incompetent. That victory, however, did not stop Viacom CEO Philippe Dauman from initiating another legal challenge to have Redstone declared incompetent.

Dauman’s case rattled investors as it left the future of Redstone’s media empire in doubt. They can rest easier now as Redstone has won again.

The Los Angeles Times reports the story in “The Redstones' war with Viacom ends: Philippe Dauman resigns, Tom Dooley elected new CEO.”

It appears Dauman and the Viacom board members backing him realized they did not have the resources to successfully wage a protracted battle against Redstone. Thus, for the sake of the company, they decided to give up the fight.

Under the terms of the agreement, Dauman will resign as Viacom’s CEO and receive a $72 million golden parachute negotiated in his last contrast with the company. Dauman will also be allowed to argue to the board that Viacom should sell off a large part of its stake in Paramount Pictures, a move which Redstone opposes.

The challenges to Redstone’s competency began when his formerly estranged daughter came back into his life and was given a prominent role in his affairs and the family trust. The daughter was accused of using undue influence over Redstone to get him to change his plans.

It is not known whether there will be any more challenges from others who were pushed aside by the daughter’s reemergence.

Whether your estate is large or small, make sure your wishes are clear. Please visit my website for information on estate planning for your family.

Reference: Los Angeles Times (Aug. 20, 2016) “The Redstones' war with Viacom ends: Philippe Dauman resigns, Tom Dooley elected new CEO.”

 

High Cost of Undue Influence

If undue influence over an elderly person can be proven there may be a price to pay.

Sometimes undue influence can turn out to be costly as the Milwaukee-Wisconsin Journal Sentinel reports in "Ex-Derzon Coins operator ordered to pay estate $1.2 million."

David Derzon, who owned Derzon Coins in Milwaukee, passed away from brain cancer in 2007 leaving his wife Rebecca Derzon as the sole owner of the store.

She only survived her husband by eight months before dying from an overdose and that is when the fight over control of the store through her estate began. Those eight months turned out to be just long enough for Rebecca Derzon to become the victim of financial elder abuse.

Rebecca's half-sister, Lori Laatsch, had been estranged from Rebecca for a long time. However, Laatsch got into contact with Rebecca when her husband was ill and caused Rebecca to rewrite her will. Instead of the estate being distributed between several other family members under the old will, the new will left 75% of the estate to Laatsch with the remainder going to one of Laatsch's friends.

In 2012, a court threw out the new will after finding that Laatsch had used undue influence to get Rebecca to change her will. Laatsch was ordered to pay back $725,000 she had taken from the estate.

Recently, a court ordered Laatsch to pay an additional $1.2 million to the estate to reimburse it for the costs incurred in litigation over her fraudulent actions.  

If you think a friend or relative might be the victim of undue influence or another form of elder abuse, please contact me to help sort it out.

Reference: Milwaukee-Wisconsin Journal Sentinel (May 22, 2016) "Ex-Derzon Coins operator ordered to pay estate $1.2 million."

Protections From Undue Influence of Unethical Lawyer

A recent appellate court decision in Michigan means that it is possible for attorneys to be unethical and still profit from the wills they create.

Every state has a basic ethical rule for attorneys: an attorney cannot draft a will for a non-relative that includes a substantial gift for the attorney. The theory behind this rule is that attorneys could manipulate unsophisticated or incompetent clients into leaving the attorney a sizeable inheritance.

Despite this well-known rule, an attorney in Michigan drafted a will for his long-time friend that gave $14 million to the attorney and his children. This was nearly the entire estate. The deceased's family sued to have the will declared invalid. The trial court ruled that since the attorney acted unethically in drafting the will, the will itself was against public policy and invalid.

The attorney appealed and won.

The appellate court decided that the will was not automatically invalid. Instead, since the attorney acted unethically, it created a presumption that he exerted undue influence. If the attorney can prove that he did not exert undue influence, then the will remains valid. The Detroit Free Press reported this story in "Court: Lawyer's $14M inheritance unethical, not invalid."

Ordinarily the person claiming there was undue influence in creating a will has the burden to prove the claim, which is often difficult. It remains to be seen how difficult it will be for the attorney to prove that he did not exert undue influence. This case will be watched closely by those in the estate planning industry as well as legal ethics experts.

Rest assured that in Florida, a will such as the one in this case would be invalid on its face.  If you have any questions about your will or other plans, please contact my office for a consultation.

Reference: Detroit Free Press (October 9, 2015) "Court: Lawyer's $14M inheritance unethical, not invalid."

Hear Ye, Hear Me - On Wednesday, January 28, 2015

Please join me this Wednesday for an update on Estate Planning 2015.

The presentation will be held at Horizon Bay at 360 Montgomery Road, Altamonte Springs 32714 from 4:00 to 6:00 p.m.

There is no charge to attend but reservations are requested so we can have plenty of room and materials for all.

Call my friends at Horizon Bay at 407-786-5637 or register on my website.

Bring your questions and come see me this week.

 

San Diego Attorney Found to Have Unduly Influenced Client

When someone radically changes her estate plan to favor someone else who was not mentioned in the original plan, charges of undue influence are common. However, proving undue influence can be difficult, which makes a recent case in San Diego interesting.

 

Svi Ljungwe was a longtime schoolteacher who amassed a small fortune through real estate dealings. In 2004, she created a trust that would have divided her estate between four charities. However, that same year, Ljungwe's last living child passed away and Ljungwe became increasingly unstable.

 She wandered into an attorney's office initially to ask about a restraining order. Over the next few years, she became increasingly attached to the attorney.

 In 2008, a new trust was drafted that left her entire estate to the attorney.

 Sound interesting?

 The U~T San Diego has the entire story in an article titled "Attorney ordered to pay $4.3M to trust."

 When Ljungwe passed away, the charities alleged that the attorney had unduly influenced her and drafted the trust himself. A San Diego judge has essentially agreed with the charities.

 The judge has not only ordered the attorney to pay back the money he withdrew from the trust but also to pay penalties in the amount of $2.6 million.

 Undue influence is normally very difficult to prove.

 If you suspect that it has occurred in an estate in which you are involved, please contact this office for advice.

 

Reference: U~T San Diego (December 31, 2014) "Attorney ordered to pay $4.3M to trust"