Estate of Zarrillo: Burden Shifting in Undue Influence Challenges Involving Wills and Joint Accounts
A recent decision in The Matter of the Estate of Antoinette Zarrillo (DOCKET NO.: ESX-CP-0108-2008), dealt with undue influence in the execution of decedent’s Will and changes to beneficiary designations and co-owners of joint accounts. The opinion also explains the different standards involved in proving undue influence with regard to Wills and inter vivos transfers.
The Decedent, Antoinette Zarrillo, died testate on January 19, 2008, a resident of Essex County. The Decedent was survived by her three sons: the Plaintiffs, Michael and Nicholas, and the Defendant, Joseph. The Decedent left a Will dated December 14, 2004 naming Joseph as Executor. Joseph was left the property and contents of Decedent’s home. The Will noted that the bequest to Joseph was made “for many reasons, some of which are the fact that he and his wife have extraordinarily sacrificed their lives on my behalf by moving from Puerto Rico and leaving their practice as doctors, and means of income, in order to care for me during the last waning years.”
The Decedent left the remainder of her Estate as follows: ten percent (10%) to Michael “since he has lost communication with the family,” forty-five percent (45%) to Nicholas “in appreciation for his love and care throughout the years,” and forty-five percent (45%) to Joseph.
The Will contained an in terrorem (or no-contest) clause, providing that “in the event any of my sons contest the will, the share of the one(s) that contest the Will shall be taken away and given to the remaining sons in equal shares, share and share alike.”
The Decedent had previously executed a Will in 2001, appointing all three of her sons as co-Executors and divided the estate equally among them. Michael and Nicholas contested the admission to probate of the 2004 Will.
Joseph and his wife moved in with decedent after her husband died in 2000. Decedent’s health began to falter in the Fall of 2004 at the time she executed the 2004 Will. Also during this period, Decedent changed the ownership and beneficiary designations on several of her accounts to favor Joseph. The Plaintiffs alleged that the 2004 Will and the inter vivos transfers were made as a result of undue influence exerted by the Defendant over the Decedent.
Judge Koprowski found that the Decedent and the Defendant had a confidential relationship and that there were “suspicious circumstances” surrounding the making of the 2004 Will; as such, they established a presumption that the Will was created as a product of undue influence. The Court noted that “while the burden of proving undue influence lies with the contestant, if a will benefits one who is in a confidential relationship to the testatrix and there are additional circumstances of a questionable or suspicious character, a presumption of undue influence arises and the burden of proof is shifted to the proponent of the will,” citing In re Davis’ Will, 14 N.J. at 169.
The Court found that the Defendant could not meet that burden.
The Court also found that changes made to beneficiary designations to various non-probate assets were also the products of undue influence. The Multiple Party Deposit Act (the “MPDA”), N.J. Stat. § 17:16I-1 et seq., creates a presumption on death in favor of survivorship rights to the joint account holder “unless there is clear and convincing evidence of a different intention at the time the account is created.” N.J.S.A. § 17:16I-5(a).
The Court, in quoting from Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 401 (App. Div. 2007), noted “ . . . 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.” 391 N.J. Super. at 401.
The Court noted that the:
[U]ndue influence test for inter vivos transfers is distinct from that employed for testamentary transfers. The undue influence test applicable to wills requires a showing of both a confidential relationship and "suspicious circumstances" in order to create a presumption of undue influence. See, e.g., Haynes, 87 N.J. at 176-77. By contrast, to raise a presumption of undue influence in the context of inter vivos transfers, a challenger to the disposition must only prove “by a preponderance of the evidence that the survivor had a confidential relationship with the donor who established the account.” Ostlund, 391 N.J. Super. at 401. . . . The undue influence tests for testamentary dispositions and inter vivos transfers also differ as to the standard by which the presumption, once raised, must be overcome. Unless policy concerns require a higher standard, the presumption in a will contest is overcome by a preponderance of the evidence. Weeks, 29 N.J. Super. at 539. However, in the context of inter vivos transfers, once the contestant proves by a preponderance of the evidence that a confidential relationship between the survivor and the decedent, “the donee must carry the burden of affirmatively demonstrating that there was no deception or undue influence and that all was open, fair and completely understood.” Bronson, 218 N.J. Super. at 393 (quoting Pascale, 216 N.J. Super. at 140); see also In Re Estate of Penna, 322 N.J. Super. at 422.
The Court also made a point that it was significant that the changes to the non-probate assets essentially disinherited a forty-five percent residuary beneficiary under the Will since the changes meant there was no residuary. “An illogical result does not necessarily make it the product of undue influence; however, this expression of testamentary intent by the Decedent is inconsistent with the multiple inter vivos transfers and there is no evidence offered by Joseph to explain these glaring inconsistencies.”
Judge Koprowski’s opinion is 81 pages long and covers many of the key cases regarding undue influence relevant to both Wills and inter vivos transfers and applies the relevant tests to the facts. It probably won’t be all that interesting to most readers but might be interesting to trusts and estate practitioners.
Matter of the Estate of Antoinette Zarrillo (DOCKET NO.: ESX-CP-0108-2008)
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