When a loved one dies, close family members sometimes find out they didn’t receive the expected inheritance. Instead, your loved one left most of the estate to an individual they just met who wasn’t even related to them. This happens when a bad actor manipulates your loved one into removing close family members from their plan and leaving assets to the bad actor instead.
It is called “undue influence.” It’s unethical, illegal, and considered a form of elder abuse. As the number of seniors increases, the prevalence of diminished capacity associated with aging, and the concentration of wealth among elderly Baby Boomers, we’re likely to see a serious surge in cases involving undue influence in the coming years.
It can disastrously affect your aging parents and other senior relatives’ estate planning. You and your family should be aware, educated, and empowered to know the risks for your elderly loved ones and future inheritance.
This article will discuss what constitutes undue influence and list some common red flags to watch for. Then we’ll explain how you can prevent such abuse with proactive communication and planning.
Undue Influence Meaning
When one person has power over another, undue influence occurs. This usually involves coercion, deception, threats, harassment, isolation, or other actions. The perpetrator is often a family member or someone with whom the victim has close ties—a caregiver, professional advisor, business partner, or friend. It can also be someone who just met them.
Undue influence typically occurs during the creation or revision of wills, trusts, or other documents in estate planning. For example, a son may use threats and lies to pressure his elderly father to change his will or trust to grant him more inheritance while reducing his siblings’ share of the estate.
Consider the following court case to illustrate what undue influence looks like in real life, which was included in an article from the American Bar Association analyzing how the definition of undue influence has evolved in California’s legal system.
Undue Influence Case Example
A daughter was living with her father, who was in his 80s and poor health. She convinced him to give her $8,000 per month because “I’m taking care of you.” She would not allow the other children to visit, saying their father was too ill and weak to receive visitors. She also told her father, “Well, the other kids won’t help. They never visit. I’m the only one who cares about you. You’d end up in a nursing home if I weren’t here.”
After the father died, the surviving family discovered that the daughter had induced her father to make a will leaving the family home to her and all his stocks and bank accounts. A will contest took place. A jury found that undue influence had taken place but that the father would have wanted to leave something to his daughter. Eventually, it was determined that the assets should be split between the four children.
Identifying Undue Influence
It is difficult to identify undue influence because it often occurs behind closed doors. Without regular communication with a loved one about their estate planning, you may not know that they have changed their plan until they have passed away or become incapacitated. This can be especially challenging if you have elderly loved ones who live far away, leaving you unable to visit them regularly and with little knowledge of their daily lives and interactions with others.
However, not all influence is undue, and some influence is perfectly fine. The fact that someone was influenced to change their estate plan to increase their inheritance isn’t necessarily enough to throw their plan into question. Additionally, adults have the legal right to make their own decisions, even bad ones. They can spend or give away their money in whatever manner they choose, provided they haven’t been deemed incapacitated.
Although it can be difficult to spot, undue influence isn’t just about one person influencing another, it’s a form of abuse in which someone with power over another manipulates them. There are several warning signs that someone may be in a relationship with an abuser.
Undue Influence Red Flags
The following are some of the most common actions that may indicate someone is attempting unduly to influence your parents or other elderly loved ones.
- Preventing communication between the victim and family members.
- Isolating the victim from family and friends.
- Withholding documents from family members.
- Encouraging the victim to make financial gifts or offer other benefits to people he or she only recently met.
- Naming recently-met connections as attorney-in-fact under a financial power of attorney or agent on medical power of attorney or as a joint owner on financial accounts, real estate, and other assets.
- Giving financial or estate planning advice that is not in the victim’s best interests but rather in the interests of the advisor.
- Excessive involvement of a recently-met connection with the victim’s estate planning efforts, such as help with creating or updating key estate planning documents.
- Significant inconsistencies between previous versions of the victim’s estate plan and the latest versions. This is especially true if the estate plan suddenly includes new beneficiaries or excludes previous ones.
If you notice any of these behaviors or other signs that a loved one may be a victim of undue influence, take the necessary steps to investigate the situation. Time is of the essence in such cases, so the earlier you step in, the better. Families often wait too long to take action, and by the time they do, the damage is already done: savings are depleted, family homes are sold, and in the worst cases, senior victims are placed in substandard nursing homes or assisted living facilities against their wishes.
In order to avoid financial mismanagement and exploitation, it’s important to get in front of the situation as early as possible. Not only will this help you prevent your loved ones from potential harm, but it will also ensure their overall health and safety.
Use Proactive Communication & Planning To Prevent Undue Influence
To avoid the possibility of unexpected decisions being made on their behalf, it is helpful to communicate with your parents and other elderly relatives about their estate planning goals and desires. By talking with them early and often about how they want their affairs handled, you can help reduce the chance of surprises down the road and prevent undue influence from occurring.
Additionally, your loved ones should always work with an experienced lawyer to create their estate plan. We can support your aging parents and other senior family members develop a comprehensive incapacity plan, customized with the specific planning vehicles to match their unique needs, family dynamics, and life situation. Bring your parents or other relatives in to meet with us for a Family Wealth Planning Session to learn more about how this would work.
If you notice any red flags or other suspect behaviors, you should immediately contact us to address the issue. While there’s no way to prevent age-related dementia and other forms of cognitive decline, make sure your parents and other senior relatives know that they can use estate planning to have control over how their lives and assets will be managed if it does occur.
This article is a service of Greg Gordillo, Family Business Lawyer™. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by scheduling a Family Wealth Planning Session via our online scheduler and mention this article to find out how to get this $750 session at no charge.