MA Appeals Court Shifts Burden to Trustee Beneficiary to Prove no Undue Influence on Grantor

The Massachusetts Court of Appeals recently held that in an undue influence case where the trustee is also a beneficiary, the burden of proof shifts from the plaintiff to the trustee who must prove that her fiduciary obligations were not breached. Germain v. Girard, 72 Mass.App.Ct. 409 (2008).

Shortly before his death in 2004, George Girard executed a new will and testament which nullified his previous 1983 Will. While his 1983 Will left his entire estate outright to his wife, Theresa, the 2004 document directed that nearly all of his assets be placed in trust for Theresa. Theresa's daughter, Paula, was named trustee and directed to exercise discretionary control for Theresa's benefit until her death. Upon the death of Theresa, any remaining trust assets would go to Paula and her husband, Alan.

Nearly eight months after George's death, Theresa filed a petition to probate his 1983 Will, to which Paula objected. Theresa also filed an equity complaint requesting nullification of the 2004 instrument. Shortly thereafter, Paula filed a petition to probate George's 2004 Will. The court determined that the 2004 Will was not the product of undue influence and allowed it as George's final will and testament.

Although pursuant to Massachusetts case law the party contesting a will on the grounds of undue influence normally assumes the burden of proof, the appeals court found that in this case, the burden should have shifted to Paula, as trustee, to prove that Alan did not exert undue influence on George. See: Estate of Moretti, 69 Mass.App.Ct. 624, 651 (2007).

To sustain a claim of undue influence, one must show that an unnatural disposition has been made by a person susceptible to undue influence, to the advantage of someone with an opportunity to exercise undue influence, and who in fact has used that opportunity to procure the contested disposition through improper means. O'Rourke v. Hunter, 446 Mass. 814, 828 (2006).

The court found Alan to be in the fiduciary position to George due to the amount of trust George placed in him over the years, trusting him to handle his expenses and with all responsibility in overseeing the preparation of the 2004 Will, thus providing him adequate opportunity to influence George to his advantage. As such, they found that as a fiduciary, Alan's actions were subject to heightened scrutiny and as such they "[saw] no reason why the burden shifting prescribed by Cleary v. Cleary should not be applied to the direct beneficiary (here Paula) from whom the fiduciary's (here Alan's) indirect benefit derives." Germain v. Girard, 72 Mass.App.Ct. 409 at 414.

The obvious conflict of interest arising from Paula's dual roles as both trustee and remainder beneficiary, coupled with the lack of any indication of why George would want to limit Theresa's access to her inheritance in such stark contrast to the provisions of his earlier will, warranted remanding of Theresa's suit to the Probate and Family Court for proceedings in which Paula would be charged with proving that no undue influence occurred.
Cleary v. Cleary, 427 Mass. 286 (1998)