Defending Yourself When Accusations of Elder Financial Abuse and Exploitation Are Made
Defending You Against Allegations of Improper or Criminal Conduct When a Gift Was Made to You Under a Last Will, Trust, or by the Power of Attorney, or Guardian
Have you been accused of taking or receiving money from an elderly person or influencing them to give you money while they are or were still alive? It’s frightening, isn’t it? Making accusations is easy but proving an accusation is something entirely different. Here’s what you need to understand.
The incapacity and/or undue influence of the gift donor are the most frequent allegations made in any fraud, conversion, will contest, trust dispute, and claim of financial exploitation involving the gifting of money made by a living or deceased person.
If the person was/is elderly, then allegations of elder abuse or elder financial exploitation are often made because of alleged mental incapacity or undue influence. These types of accusations are serious and can subject the accused person to significant criminal and/or civil penalties, damage to his/her reputation, and legal damage claims by the victim and/or their family.
What is Undue Influence and How Does it Apply to Defending Against Claims That a Gift, Trust
or Will Was Made With Lack of Capacity or Under Undue Influence, Conversions or Fraud
How to Defend and Protect Yourself When Accusations are Made About Gifts Made to You By a Person Lacking Mental Capacity
LACK OF MENTAL CAPACITY AND UNDUE INFLUENCE IN NEW JERSEY IS COMPRISED OF THREE ELEMENTS
THEY ARE AS FOLLOWS:
- The exertion of influence over another that is undue and significant (i.e., alleging that certain decisions were not rationally made is not enough).
- This influence must overpower the elderly person’s free will and compromise his or her thinking when the will/trust/power of attorney was signed or a gift was made.
- That influence caused the elderly person to execute a will, trust, power of attorney or make a gift that he or she would not have made but for the undue influence.
New Jersey case law describes undue influence as either, mental, moral or physical coercion that causes the testator/donor or grantor do something that is contrary to what the testator/donor or grantor would have normally done.
Often, it is alleged that because of the undue influence of another, the will, trust or gift reflects the wishes and desires of the influencer (dominant person) not the testator/donor. These kinds of claims are tough to defend against.
THE TOUGH PART: PROVING UNDUE INFLUENCE
When addressing a claim of undue influence, a plaintiff must obtain evidence about the beneficiary(s) (the person receiving the gift). The evidence must clearly show motive or the opportunity for the beneficiary(s) to have attempted to exert undue influence over the elderly person at the time the will, trust or power of attorney was executed. This is tough to prove and gives the accused an opening.
Not all influences are “undue” influences. However, and this is an important point to be made and understood! To be “undue”, the influence must be such that it destroys or substantially compromises the elderly person’s free will to do as he or she pleases with his or her property. Each case is governed by the facts and circumstances surrounding the execution of the will, trust, or the making of the gift. A court will closely review the actions taken by the parties who took part in the gifting to determine if coercion or undue influence was exhibited. The mere making of a gift or transfer of $$$ is not enough.
Defending a Gift Made to You Against Claims That the Gift Was Made When the Elderly Person Lacked Capacity or Was Under Undue Influence and/or Fraud
Understanding NJ Law Surrounding Gifts
In New Jersey, a valid gift, whether made when the elderly person was/is alive or made under a will or trust generally has four elements. Those elements are:
- The elderly person, whether actual or symbolic, gave delivery and possession of something of value to another.
- There was an intention by the elderly person to make this gift to another.
- There was/is an acceptance of the gift by the receiver of the gift.
- The elderly person knowingly gave up legal ownership, physical possession and control over the subject matter of the gift to another.
If it is believed that the elderly person does not have capacity to make a gift, then an alternate option to consider is whether a comprehensive durable power of attorney allows an agent with the explicit authority to make a gift(s). This financial power of attorney may allow the agent to make gifts to others when the elderly person may no longer be able to legally make his or her own gifts.
New Jersey courts have also permitted guardians to make gifts and engage in estate planning with a well written power of attorney or certificate of guardianship.
People discuss the word “gifts” or “gifting” differently. Claims made against you for receiving something of value because the donor lacked capacity requires a legal as well as medical analysis. If you would like advice on this subject, contact Fredrick P. Niemann, Esq. at (855) 376-5291 or email him at fniemann@hnlawfirm.com to discuss your case. You’ll find him easy to talk to and confide in. All consultations are attorney-client protected.
Burden of Proof When Defending Claims That a Gift(s), Trust and/or Will is Invalid Because of Lack of Capacity, Undue Influence and Similar Grounds
The law presumes that an elderly person like any other person is competent while alive. Whoever challenges that capacity has the burden of producing evidence to rebut that presumption. This means your accuser must first establish a case with credible evidence.
Undue Influence and Will Contests
Generally, the burden of proving undue influence lies with the person challenging the gift unless the beneficiary was in a confidential relationship with the deceased and there are suspicious circumstances surrounding the relationship and making of the gift.
A confidential relationship includes not only situations involving a legal or fiduciary relationship, such as guardian, power of attorney, conservatorship, principal agent and trustee, but also in cases where a relationship of trust and confidence exist.
In the case of gifts, once the confidential relationship and suspicious circumstances are proven, the burden shifts to the accused who must then prove by “clear and convincing” evidence that there was no undue influence. Here again there are often legitimate reasons why an elderly person would want to make a gift (large or small) to you or others. Just because you are or were in a confidential relationship does not legally negate the validity of the gift.
Defending Against Claims of Undue Influence for Gifts Made While Alive
Someone has accused you of taking money from an elderly or incapacitated person.
What do you do? First read this background information:
Lifetime Gifts (a legal term for gifts made while a person is alive) are viewed “suspiciously “. As one Judge stated, “a person is not likely to give away while alive what he can still enjoy.”
A showing of a confidential relationship and/or proof that the beneficiary dominated the testator will satisfy the initial burden. If that burden is met, then the burden of proving a legitimate gift/transfer is on the party who asserts that defense. An accused defendant must produce “clear and convincing” evidence there no undue influence, and that the transfer was well understood by both parties.
If a person is physically or emotionally dependent upon another person for his or her necessities of life and this dependent person makes a “gift” of most of his or her savings and assets, a presumption arises that the donor did not understand the consequences of his or her act or was subject to undue influence.
For Example: When the donee (a person who receives a gift) is the dominant person in the relationship, the burden is upon him or her to show by clear and convincing proof the gift was the voluntary and intelligent decision of the donor.
As compared to: If a donor (a person making a gift) is physically or mentally weak and the donor is left impoverished or without adequate financial support after the making of the gift, independent legal advice is required.
Joint Bank Accounts and Undue Influence in New Jersey
Being listed on a joint bank account(s) can qualify as a lifetime gift but there is/are a different standard of proof required to void the account under the law because joint bank accounts are governed by the NJ Multi-Party Deposit Account Act.
Under the Act joint accounts belong to the parties in the same proportion as the sums deposited by each party into such account unless the terms of the account opening contract indicate a different intent or there is clear and convincing evidence that at the time the account was opened the parties did not intend to create a 50/50% ownership relationship or a survivorship feature. The burden of proof rests with the party seeking to void the 50% interest.
The act creates a rebuttable presumption of survivorship in joint accounts.
Even if no undue influence is found, the court can look at all the direct and circumstantial evidence available to determine whether the decedent intended to create survivorship rights.
Evidence Necessary by Your Attorney to be Successful in the Defense of a Will and/or Trust in Litigation
The mental health of the trust maker/testator/donor prior and subsequent to the signature of his or her last will or the making of their trust or the makign of a lifetime gift is generally highly persuasive to the testator’s/donor’s/trust maker’s mental capacity and understanding at the time the will/trust was made, or the gift effectuated.
Any statements made by a person prior or subsequent to the creation of the will or trust or making of a gift will often demonstrate the testator’s/donor’s relationship with the person who received the economic value of gifts.
Fact Witnesses – These witnesses are critical to demonstrate the physical and mental capacity of the decedent before the decedent’s death. Usually these witnesses are close personal friends of the decedent or family members.
Attesting Witnesses to a Will or Trust or Gift – Opinions of witnesses who were present at the signing of the will, trust or gift are afforded a great deal of credibility and believability as these witnesses were present and viewed the person during the will, trust or gift execution.
Attorney as Witness – The attorney is a useful witness as he or she observes the testator/donor from the time of the initial client meeting, through the drafting of the relevant planning documents and at the time of the document execution.
Treating Physician – A physician may qualify as both a fact witness and an expert witness, and the physician may testify to all treatment including mediations provided to the decedent and all conversations with the decedent.
Decedent’s Hospital and Medical Records – These records may be introduced to demonstrate the capacity of the testator/donor received at the hospital.
Fredrick P. Niemann Esq.
If you are an executor, trustee, beneficiary or a person who is being accused and now has to address a claim by someone that an elderly person (or other) was taken advantage of or financially exploited by you or someone you know, then contact Fredrick P. Niemann toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com to meet and discuss your concerns. You’ll find him easy to talk to and very knowledgeable about the law in New Jersey on this subject.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Elder Abuse Attorney
DEFENDING AGAINST CLAIMS THAT GIFTS, TRUSTS & WILLS WERE MADE WITH LACK OF CAPACITY, UNDUE INFLUENCE & SIMILAR GROUNDS