One of the requirements to make an undue influence case under New Jersey law is the existence of a confidential relationship between the decedent and the alleged undue influencer.
In general terms, a confidential relationship exists when one party trusts and relies on another party by reason of the first party’s weakness or dependence.
How Is a Confidential Relationship Defined In New Jersey?
Most New Jersey courts agree that the nature of a confidential relationship is difficult to define. It “encompasses all relationships ‘whether legal, natural or conventional in their origin, in which confidence is naturally inspired, or, in fact, reasonably exists.’ ” Pascale v. Pascale, 113 N.J. 20 (1988). A confidential relationship includes cases where trust and confidence actually exists. It comprehends cases where,
the relations between the [contracting] parties appear to be of such a character as to render it certain that they do not deal on terms of equality, but that either on the one side from superior knowledge of the matter derived from a fiduciary relation, or from over-mastering influence; or on the other from weakness, dependence or trust justifiably reposed, unfair advantage is rendered probable.
See Estate of Ostlund v. Ostlund, 391 N.J. Super. 390 (App. Div. 2007). In Blake v. Brennan, the court found the test for measuring the existence of a confidential relationship is “whether the relations between the parties are of such a character of trust and confidence as to render it reasonably certain that the one party occupied a dominant position over the other and that consequently they did not deal on terms and conditions of equality.”
What Are the Factors Of a Confidential Relationship?
The factors considered by New Jersey Courts to determine the existence of a confidential relationship are:
- whether trust and confidence between the parties actual exist
- whether the parties are dealing on terms of equality
- whether one side has superior knowledge of the details and effect of a proposed transaction based on a fiduciary relationship
- whether one side has exerted over-mastering influence over the other; or
- whether one side is weak or dependent
See Estate of Ostlund v. Ostlund, 391 N.J. Super. 390 (App. Div. 2007).
Does the Existence Of a Family Relationship Create a Confidential Relationship?
No. The mere existence of family ties does not create a confidential relationship under New Jersey law. Even if there are family ties, the challenger, at the outset, still has the burden of proving by a preponderance of the evidence that a confidential relationship exists.
Case Study: Estate of Ostlund v. Ostlund
In Ostlund, the court determined the existence of a confidential relationship in the context of the disposition of a joint bank account and the right to certain checks payable to the decedent that were deposited into the joint account after the decedent’s death. The lower court’s judgment determined that the funds in the account belonged to decedent’s son, who was the joint owner of the account. The Estate appealed the judgment, arguing that the funds should have been property of the Estate.
In addition to the statutory test set forth in the Multiple-Party Deposit Account Act for determining ownership on death of a joint bank account, an alternative basis exists to challenge the ownership of a joint survivorship account on the death of one party. If the challenger can prove by a preponderance of the evidence that the survivor had a confidential relationship with the donor who established the account, there is a presumption of undue influence which the survivor donee must rebut by clear and convincing evidence.
In Ostlund, the lower court found that no confidential relationship existed between the decedent and his son at the time the account was opened. The trial judge further found no evidence of dependence or subservience and that all that was proved was the mere existence of a family relationship between decedent and Junior. In essence, the judge found a failure of proofs necessary to show inequality between the parties that would rise to the level of a confidential relationship.
The confidential relationship prong of the New Jersey undue influence elements is often conceded by the alleged undue influencer. However, a New Jersey probate litigation attorney might consider making the challenger prove this often overlooked element of undue influence cases in cases where the existence of a confidential relationship is questionable.