Disappointed Beneficiaries

Disappointed Beneficiaries – Everyone has the right to execute a Will, or a Trust, to say who inherits their assets when they die.  Nor is there any requirement to leave any assets to family members.  What then is the remedy when someone does not receive what they had expected due to the possible wrongdoing of a third party?

Sometimes the decedent’s Will, or Trust, was other than what the decedent truly intended because of fraud or undue influence.  Then a Will Contest to overturn the Will or Trust can be brought by someone who would benefit more under the decedent’s prior Will, or Trust ; or else inherit more as an heir if there is no earlier document.  A Will Contest can be risky and expensive.  It can violate a “do not contest” clause and may jeopardize the contestant’s right to receive whatever was left under the contested Will, or Trust.

California law conclusively invalidates certain types of inherently untrustworthy gifts.  Specifically, gifts made to the person who drafted the gift instrument – such as the person who wrote the decedent’s Will — are invalid per se. Also gifts where the beneficiary is either related to or associated with the person who drafted the gift instrument and is also is either “a fiduciary for the giver” or is “a personal caregiver to the giver” are invalid.  Examples of fiduciaries include the giver’s attorney, the giver’s agent, and the giver’s accountant.  An example would be if the giver’s agent had a Will drawn up by the agent’s own personal attorney that left a major gift to the agent.

California law also presumes (but does not conclude) that certain other types of gifts are invalid due to a fraud or undue influence being perpetrated by the recipient of the gift upon the giver.  This includes (1) gifts to a fiduciary of the giver when such person caused the instrument to be drafted, and (2) gifts to personal care givers, unless the caregiver is related to the donor or another exception applies.

California law, however, makes the following notable exceptions:  (1) gifts to someone related by blood or affinity (within the fourth degree) to the transferor or the transferor’s cohabitant (i.e., someone who lives with the transferor and has an intimate relationship); (2) gifts that have been approved by court order through a substituted judgment procedure.

Next, sometimes the issue is not whether the Will, or Trust, is the product of fraud or undue influence but whether the decedent failed to take action because someone else interfered and prevented this from happening.  For example, take a decedent who while alive was prevented from creating a will (or trust) or was prevented from modifying or revoking his or her existing Will or Trust.  As a result the old distribution scheme for the decedent’s estate was given effect.   Here a Will Contest does not provide a remedy.  Instead a possible remedy is suing the person who interfered personally under a so-called “Intentional Interference with the Expectation of an Inheritance” (“IIEI”) cause of action.

To succeed with an “IIEI” lawsuit, one must prove that it was reasonably certain that he or she would have received an expected gift but for the fact that someone intentionally and wrongfully prevented the decedent from following through so that the gift was not made.

The law can only go so far in protecting people against wrong doing.  Vulnerable people, including those who are lonely and needy, are much more likely to be befriended by predators who gain the person’s confidence.  They are, therefore, more likely than most to fall victim to fraud, undue influence and wrongful interference.