An Indiana appeals court holds there is no presumption of undue influence when a transaction which benefits an attorney-in-fact was not effected through the actual use of the power of attorney. In the Matter of Estate of Compton (Ind. App., No. 66A03-0906-CV-249, Jan. 19, 2010).
In 2005, Stephen Compton executed a will devising his estate, consisting primarily of a significant amount of farmland, to his six children. He also executed a power of attorney naming his son, Scott, as his attorney in fact. Shortly before his death in 2008, Mr. Compton executed contracts to sell land to Scott that had been earmarked in his will for another child and to purchase Scott's house.
After Mr. Compton's will was admitted to probate, the personal representative of his estate petitioned the court to allow completion of the two real estate contracts. Three of Mr. Compton's children objected, arguing that the contracts were the result of Scott's undue influence over their father. Following a hearing, a trial court found that Scott had not executed any documents or otherwise acted as an attorney-in-fact for their father and that while Scott had participated in the preparation and execution of the contracts, they were made without undue influence and were their father's free acts.
The objecting children appealed, arguing that the trial court erred by failing to apply the common law presumption of undue influence in transactions between a principal and an attorney-in-fact and by failing to find that Scott had failed to rebut the presumption.
The Court of Appeals of Indiana affirms. The court finds that in light of amendments to Indiana statutes, the common law presumption of undue influence in transactions between a principal and his attorney-in-fact has been abrogated and "[a] presumption of undue influence is now conditioned upon the attorney-in-fact's actual use of the power of attorney to effect the questioned transaction for his benefit."
To download the full text of this decision in PDF format, go to: https://www.in.gov/judiciary/opinions/pdf/01191001nhv.pdf.
(If you do not have the free PDF reader installed on your computer, download it here.)
Did you know that the ElderLawAnswers database now contains summaries of more than 1,500 fully searchable elder law decisions dating back to 1993? To search the database, click here.
Subscribe to the Knowledge Bank.
