New Jersey Court holds Executors and Trustees potentially liable for damages

HNWElder Law, Estate Administration and Probate

Punitive Damages Okayed in Probate Case:

The New Jersey Supreme Court on July 22, 2008 considered the circumstances in which it is appropriate to award punitive damages against a fiduciary in a case involving Wills, Trusts, Probate proceedings and lifetime transfers.
In this case, a lawsuit was filed against a doctor who was alleged to have persuaded the decedent to transfer a large home in Spring Lake, New Jersey to him in lieu of the local Volunteer First Aide Squad who was the prior testamentary beneficiary under her Last Will and Testament.  In its analysis, the Court concluded that the remedy of punitive damages is limited to situations where an individual (who is essentially a stranger to the testator) gains access to him or her through undue influence and then carries out a scheme to place himself or herself in a position to seize control of the testator=s (decedents) assets through a lifetime transfers or a bequest under their Last Will and Testament.  The Court generally opinioned that any punitive damage award arising in such a case filed in the Probate Division of the Superior Court must be in compliance with the New Jersey Punitive Damages Act.  This remedy will be infrequent and limited to circumstances in which the person who received the lifetime gift or bequest is an individual who otherwise cannot be punished through a lesser available remedy by the Probate Court. Because of the unique facts of this case, an award of compensatory damages and potentially punitive damages was available.   The case was remanded back to the Probate court for further determination of the issue of compensatory and punitive damages in light of the Supreme Court decision.  This case is significant for the proposition that Executors, beneficiaries of lifetime and testamentary gifts when obtained through undue influence, suspicious circumstances, etc.  can be held personally liable for punitive damages.

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