One of the basics of an undue influence challenge to a New York will or trust is establishing the existence of a confidential relationship. Once a confidential relationship is established, an inference of undue influence arises. We have discussed undue influence cases in New York here.
In a July 2020 case, Matter of Kotsones, the Supreme Court of the State of New York, Appellate Division, Fourth Judicial Department, reversed the surrogate court’s order finding undue influence stemming from an erroneous determination that a confidential relationship existed.
The Facts of Matter of Kotsones
Petitioner and Respondent Ellen Kreopoides are the children of Sophie Peter Kotsones, the decedent. Ellen is also the trustee of the Sophie Peter Kotsones Irrevocable Trust (“Trust”). Respondent Alexander Kreopolides is Ellen’s son.
Ellen and Alexander applied to admit decedent’s December 5, 2012 will to probate in New York surrogate’s court. Petitioner objected to the will being admitted to probate and filed a petition seeking to invalidate the trust and certain real estate transactions involving decedent’s property. As grounds for his objection and petition, petitioner alleged that Ellen and Alexander had a confidential relationship with decedent under New York law and exerted undue influence on decedent.
The Surrogate’s Court, Steuben County, denied Ellen and Alexander’s application to admit the December 5, 2012 will to probate and invalidated certain transactions. The Surrogate’s Court determined that a confidential relationship existed between respondents and decedent, and that the will, trust, and real estate transactions had been procured by Ellen and Alexander exerting undue influence upon decedent.
Existence of A Confidential Relationship Under New York Undue Influence Law
Under New York law it is well settled that “where there was a confidential or fiduciary relationship between the beneficiary and the decedent, [a]n inference of undue influence arises which requires the beneficiary to come forward with an explanation of the circumstances of the transaction’ ”
Here, the petitioner had the initial burden of showing that a confidential relationship existed between Ellen, Alexander, and decedent in order to raise an inference of undue influence.
How Do You Demonstrate The Existence of A Confidential Relationship In New York?
In order to demonstrate the existence of a confidential relationship under New York law, there “must be evidence of circumstances that demonstrate inequality or a controlling influence’ ” Matter of Nurse, 160 AD3d 745, 748 [2d Dept 2018]).
The court stated:
Indeed, a confidential relationship has been described as “one that is of such a character as to render it certain that [the parties] do not deal on terms of equality’.” Further, ” [a]n inference of undue influence cannot be reasonably drawn from circumstances when they are not inconsistent with a contrary inference’ “
A Position of Trust Does Not Automatically Equal A Confidential Relationship
Here, Ellen and Alexander held a position of trust with decedent. Ellen helped decedent with her finances and was named decedent’s power of attorney. But, the record also showed that:
- Despite Ellen’s position of trust, decedent was actively and personally involved in managing her real estate and in drafting her estate plan;
- Decedent directed her personal attorney and the branch manager at her bank to act according to her own desires based on her own personal, stated reasons;
- Various nonparty witnesses acted pursuant to decedent’s direction, not Ellen’s or Alexander’s.
Decedent’s testamentary capacity was not at issue on appeal.
The court determined that petitioner failed to meet his initial burden of establishing that Ellen and Alexander’s relationship with decedent was of such an unequal or controlling nature as to qualify as a confidential relationship and give rise to an inference of undue influence.
The Existence of Undue Influence Aside From The Existence Of A Confidential Relationship
To establish undue influence under New York law aside from the existence of a confidential relationship, there must be a showing of the “exercise[ of] a moral coercion, which restrained independent action and destroyed free agency, or which, by importunity [that] could not be resisted, constrained the testator to do that which was against [his or] h[er] free will.”
The court noted that the record demonstrated that Ellen and Alexander wanted to benefit from decedent’s estate, and that Ellen helped decedent execute the relevant documents and make the disputed transactions. However, what the beneficiaries wanted is not the relevant inquiry. Rather, the relevant inquiry is “whether decedent’s free will, independent action, and self-agency were overcome by their conduct.”
The record reflected that decedent personally authorized every document and was actively involved in the management of her own affairs. The record did not reflect that decedent at any time lost her free will or agency, but instead took actions based on her personal motives.
The court reversed the findings of the New York surrogate’s court, finding that the surrogate’s court erred in concluding that the will, trust, and real estate transactions were procured by undue influence. the Surrogate erred in concluding that a confidential relationship between Ellen, Alexander, and decedent existed, which thereby triggered an inference that Ellen and Alexander exerted undue influence on decedent with respect to the will, trust, and real estate transactions.
Sometimes litigants take the existence of a confidential relationship for granted, assuming that it is almost a given when someone close to the decedent has benefited substantially under a decedent’s will. This case is a good reminder that establishing a confidential relationship under New York law requires evidence supporting its existence.