In an Ontario dispute over a testator’s $21 million estate, the court set out the indicators of undue influence in estate cases.
Testator Executes a Series of Wills and Legal Documents
The testator was born on May 14, 1922 and died almost 94 years later on April 22, 2016.
The court described the testator as autocratic and strong-willed, dominant and controlling, as well as skillful as a stock investor. She had become wealthy and was generous, donating to charity and providing monetary gifts totalling $14,469,870 to her daughter and son, in the period from 1989 to 2013. At her death, she left more than $21,000,000 in assets.
The testator had executed a will in 2005 and again in 2008. Each of the wills provided that the testator would pass her wealth upon her death to each of her two children in equal shares.
However, in May 2013, the testator had changed her will to favour the son, so that on her passing, he would receive 75% of her estate and the daughter would receive 25%. Additionally, the testator had executed 19 documents in a 13-month period (the “Post-August 2013 Documents”) which would, if valid, have the effect of entitling the son to all of the testator’s wealth and the daughter to nothing.
Within ten days of her passing, the son sued the daughter for a declaration that would have the effect of entitling him to all of the testator’s wealth. In response, the daughter claimed that the testator’s wealth should be distributed between them in equal shares.
Among the issues raised at trial was the matter of the testator’s testamentary capacity, including whether she had suffered from a mental condition at the time of distributing her assets. Additionally, there were accusations of undue influence against the son.
In fact, the daughter challenged the validity of the May 2013 will and all the Post-August 2013 Documents on the basis of the testator lacking testamentary capacity because she was affected by delusions that caused her erroneously to believe that the daughter was uncaring, unkind, and inattentive toward her. The daughter claimed was all of this was untrue and maintained that the son had exerted undue influence over the testator from May 2013 onward. It was the daughter’s position that the last will which the testator had made free of mental incapacity and free of undue influence was her 2008 will, and that all documents executed thereafter must be set aside. The daughter thereby claimed entitlement to 50% of the testator’s estate.
In contrast, the son contended that the testator had been lucid and capable to her death and denied that she had suffered from any delusions that influenced her will-making. He stated that the testator’s decision to punish the daughter through diminished inheritance had its roots in their often-tense relationship, conjuring long-past incidents and more recent friction to show that the testator had a factual basis on which to disinherit her daughter.
Additionally, the son denied that he had unduly influenced his mother in her decision to leave him everything. He also contended that he arranged for the Post-August 2013 Documents at the testator’s direction and on her instructions to seek late-life tax planning. He claimed that he hired new lawyers to prepare the documents because the testator had lost her previous lawyer.
Court Upholds Will But Finds Undue Influence
The court began by stating that its starting point for analysis would be the events leading to May 28, 2013, when the testator executed her May 2013 will which revoked her previous will and left 75% to the son and 25% to the daughter.
To assess whether the May 2013 will was valid, the court set out the questions for its analysis as follows:
1) Was the May 2013 will executed in suspicious circumstances?
2) Did the testator have testamentary capacity in May 2013?
3) Was the testator subject to undue influence at the time of execution of the May 2013 will?
4) If the testator’s May 2013 will was valid, was it revoked by the testamentary dispositions that were in the Post-August 2013 Documents?
After reviewing the evidence, the court found that the May 2013 will had not been executed in suspicious circumstances, that the testator had testamentary capacity to make the 2013 will and that she had not been subject to undue influence at the time of the 2013 will.
However, the court also found that the Post-August 2013 Documents were entered into while the testator was subject to undue influence by the son and the lawyers he had hired on her behalf. In coming to this conclusion, the court examined the indicators of undue influence as set out in case law, which ask:
- Had the testator experienced recent family conflict?
- Was the testator socially isolated?
- Did the testator make new testamentary dispositions inconsistent with previous wills?
- Did the testator make changes to testamentary dispositions simultaneously with changes to other legal documents?
- Were the changes made in the testamentary dispositions made using a lawyer previously unknown to the testator?
- Was the new lawyer chosen and retained by the alleged influencer?
- Did the alleged influencer communicate instructions to the lawyer acting for the testator?
- Did the alleged influencer receive a draft of the document prior to the testator?
- Did the testator make substantial pre-death transfers of wealth to the alleged influencer?
- Was the testator dependent on the alleged influencer for emotional and physical needs?
- Was the testator kept socially isolated from disinherited family members?
- What was the impact of the advice by the lawyer on the issue of undue influence?
The court concluded that the son had used undue influence and the Post-August 2013 Documents were invalid. This meant that the son was not entitled to the testator’s entire estate.
However, because the court considered that the 2013 will was valid, the son was entitled to 75% of the estate and the remaining 25% would be distributed to the daughter.
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