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Fiduciary Relationship and Undue Influence

In Re Benedetti Estate and Trust is a recent unpublished opinion from the Court of Appeals, so take it for what it’s worth. (Click on the case name to read the case.)

The opinion offers an extensive discussion of a key issue in will and trust litigation, specifically the nature of the relationship that must exist to give rise to a “fiduciary relationship” sufficient to meet the requirements for a presumption of undue influence.

Background: Most contests of this type involve the allegation that the contested document was a product of undue influence. The standard of proving undue influence is very high. One way to overcome that burden (or at least, overcome summary disposition on the issue of undue influence) is to establish three elements that give rise to a presumption of undue influence. Those elements are: (1) That there was a fiduciary relationship between the person who executed the document and the person who is alleged to have exercised undue influence; (2) That the person alleged to have exercised undue influence had an opportunity to do so, and (3) That the person alleged to have exercised undue influence benefited from the document.

This case discusses the first element.

It has been held that the existence of a formal agency (i.e., power of attorney appointing the person alleged to have exercised undue influence) is sufficient to establish a fiduciary relationship. However, the Courts have held that such formality is not necessary and that a fiduciary relationship may exist whenever the person creating the document was in a relationship in which s/he put their trust in the person alleged to have exercised undue influence.

In this case the evidence of a formal fiduciary relationship (power of attorney) was imperfect. However, it appears to be acknowledged that the person alleged to have exercised undue influence did in fact help the person who created the trust and will with his finances, paying bills and other such activities. The trial court held that notwithstanding these activities, the party challenging the documents failed to establish the existence of a fiduciary relationship sufficient to give rise to the presumption. The reasoning hinges on the finding that although the one person was helping the other person with their finances, the person who created the will and trust did not rely on the judgement of the purported undue influencer – that is, they continued to exercise their own independent judgment as to these affairs and the role of the assisting party was more or less ministerial. This is significant. If this is the law, it weakens cases in which these facts are relied upon as a basis for the presumption.

In will and trust litigation, the importance of the presumption of undue influence can hardly be overstated. It is raised in a high percentage of such cases. The presumption is a finding of the court, even in cases that go to the jury. That means a failure to establish the presumption will often result in summary disposition, as was the result in this case. The value of such cases (from the perspective of the contesting party) increases dramatically when it is clear that the case will be decided by a jury. As such, for lawyers handling these types of cases, this case is worth saving as it provides a roadmap when defending documents in which no formal power of attorney exists, the contesting party seeks to impose the presumption, and the question of whether or not the element of a fiduciary relationship has been met is in play.


Playing with Knives

There’s a saying among litigators. It goes like this: Lawyers play with knives but never get cut.

The idea (or image) is two lawyers facing each other holding knives, with their clients in between. When the case is over, the clients are bloodied but the lawyers remain unscathed. It’s a coarse image – but there is a truth in it that allows the saying to survive.

Litigation is a mean game – at times brutal. It is common for clients to dislike (at times, vehemently dislike) the opposing party’s attorney. And it is sometimes hard for clients to understand how the lawyers in the case remain collegial throughout the process. They wonder: Why is my lawyer talking to that other lawyer about his/her kids or their practice? Why doesn’t my lawyer see what an a-hole s/he is?

But lawyers are like that. Civility and professional courtesy is part of our creed, or way of thinking. It is an integral part of how the system works (See “The Romance of the Law” below).

However there can be rare cases where the lawyers are cutting each other. Lawyers don’t like these cases, and Judges like them even less. Yet, in certain situations, if the attorney is going to adequately represent their client, it can’t be avoided.

In my practice this dynamic can come up in contested guardianship/conservatorship matters.

It is common in these matters to have a vulnerable adult who can be manipulated – and who will voice the preferences of whoever they are physically in the presence of (or under the control of) at the time. As a result, the person(s) or faction that has the most physical access to the vulnerable adult while the litigation is pending can often assert that they are acting in a manner consistent with the desires of the vulnerable adult, even though the truth is that: were the vulnerable adult allowed to spend sufficient time with the other parties, that vulnerable adult’s views would change to align with those parties. The upshot is that s/he that controls the vulnerable adult can take the vulnerable adult to a lawyer who can claim to represent the vulnerable adult, advocate for the objectives of the controlling faction, and use the vulnerable adult’s money to pay the costs of litigation.

Of course, an attorney should not do this. They should carefully assess whether their purported client has the capacity to retain legal counsel at all; and if so, take steps to separate the client from members of the faction to determine whether or not the expressions of the vulnerable adult client are in fact their own preferences, or simply the result of manipulation of the controlling faction. Where the attorney fails to protect their client in this way, the attorney representing the non-controlling faction may be forced to raise the issue to the court.

Although Michigan courts have yet to directly address this topic, some interesting work has been done in California. A report from the Estate Planning, Trusts and Probate Law section of the California State Bar; includes the following:


The existing statutory law concerning the appointment of an attorney by the court for a proposed conservatee who appears with a lawyer who contends that he or she is the proposed conservatee’s lawyer, is very unclear. Probate Code §§ 1470 and 1471 provides statutory authorization for the court to appoint an attorney to represent a proposed conservatee when the conservatee lacks counsel to represent himself or herself. Neither code section addresses a situation where a lawyer contends that he or she represents a proposed conservatee, but the court has serious doubts about whether the proposed conservatee has the capacity to hire the would-be attorney as the proposed conservatee’s attorney. The right to choose one’s counsel is a right with which courts are reluctant to interfere.

Unfortunately, it is common for the perpetrator of elder fiduciary abuse (“perp”) to arrange for a lawyer to represent a proposed conservatee in opposing the appointment of a conservator, or in seeking to have the perp appointed as the conservator. See, e.g., Conservatorship of Chilton, 8 Cal.App.3d 34, 86 Cal. Rptr. 860 (Second Dist. 1970), where (according to the Court of Appeals) Attorney Arditto really was the lawyer for the perp, although he pretended to be the lawyer for the proposed conservatee. Arditto litigation in opposition to the conservatorship, and took other steps that were supportive of the financial abuser, who also entered into a subsequently voided marriage with the incompetent.

The case of Conservatorship of Chilton, 8 Cal.App.3d 34, 86 Cal. Rptr. 860 (Second Dist. 1970) stands for the proposition that the lawyer who appears “for” the proposed conservatee, to oppose a conservatorship, can be acting in reality for the perpetrator against the best interests of the manipulated and incompetent proposed conservatee.


Emphasis added. Click here to read the report.

These situations seem to be a natural byproduct of the increasing number of contested guardianship/conservatorship matters. At this stage, Michigan courts don’t seem comfortable addressing this issue – and the attorney who makes accusations about opposing counsel can be seen as crossing that critical line by using their knife to slash fellow counsel. But litigation can be a rough sport – and when these situations arise, there may be no other options.