Breaches of Fiduciary Duty
In order for a lawsuit based upon breach of fiduciary duty to proceed in Missouri courts, the plaintiff needs to show that one party has accepted the trust and assumed the duty to protect a weaker party. See generally, Zakibe v. Ahrens & McCarron, Inc. 28 S.W.3d 373 (Mo. Ct. App. E.D. 2000).
Normally most of us have no reason to believe our loved ones have betrayed us, however it is important to know the warning signs and how to respond accordingly. As a result, heirs and beneficiaries, as well as wards, should be concerned about the possibility that there has been a breach of the fiduciary duty owed to them if they:
- Suspect that the trustee, guardian, or personal representative may be self-dealing in some way. Self-dealing is the conduct of the fiduciary that consists of taking advantage of his or her position in a transaction and acting for his or her own interests rather than for the interests of the beneficiary. Examples might include selling or renting property to friends or family members at a bargain rate; taking assets (cars, computers, boats) for personal use, etc;
- Believe that the trustee, guardian, or personal representative is paying themselves too much. While fiduciaries may be legally allowed to receive payment for their efforts as well as reimbursement for legal expenses, these amounts must be reasonable. Excessive compensation is a breach of fiduciary duty;
- Be of the opinion that the trustee, guardian, or personal representative may be intentionally stealing assets, or using these monies for their own personal gain; or
- Believe that the trustee, guardian, or personal representative is making poor or improper investment choices.
Testamentary Capacity & Competency Challenge
To execute a will or trust, the law requires that you be “of sound mind.” What does this mean in terms of executing a valid will or trust? Generally, it means you must be mentally able to:
- Understand the ordinary affairs of life;
- Understand the nature and extent of your property;
- Know persons who were the natural objects of your bounty (heirs); and
- Intelligently weigh and appreciate natural obligations to those persons and know that he or she is giving the property to persons mentioned in the document.
The test is the decedent’s ability to comprehend and understand the ordinary, as distinguished from the intricate and complicated affairs of life.” Testamentary capacity is not the same as contractual or legal capacity – it is a lower standard. A popular saying is that the law allows even a “lunatic” to make a will or trust, as long as the document is made in a lucid interval.
Lack of capacity must be proven by “clear and convincing evidence.” It can be the result of the natural aging process, the result of organic brain diseases such as Alzheimer’s or dementia, or the result of a person being on a substantial amount of medication, such as heavy morphine to treat end-stage cancer.
While these things often are associated with lack of capacity, courts have held that “mere proof of illnesses, or imperfect memory, or forgetfulness of names and persons, or old age with its attendant physical and intellectual weaknesses, or mental confusion, or arteriosclerosis, either singly or in combination, do not prove lack of capacity, unless it further appears that grantor did not understand the nature of the instant transactions, and did not with such understanding voluntarily enter into and consummate the transactions.” Vineyard v. Vineyard, 409 S.W.2d 712, 716 (Mo. 1966).
The fact that a person is suffering from senile dementia also does not alone prove he lacks testamentary capacity. Matter of Brown’s Estate, 230 Kan. 726, 640 P.2d 1250, 1254 (1982). The diagnosis of Alzheimer’s or other organic brain disorder also does not establish a lack of testamentary capacity. Wright v. Kenney, 746 S.W.2d 626, 631 (Mo. App. S.D. 1988) (“Eccentricities and an organic brain syndrome or senility do not establish the absence of testamentary capacity.”); In re Gene Wild Revocable Trust, 299 S.W.3d 767 (holding diagnosis of “moderate stage dementia” did not establish lack of testamentary capacity). Other characteristics such as “personal eccentricities”, “suspicious” behavior, stubbornness, lack of affection for relatives, and the onset of a quick and explosive temper do not constitute substantial evidence of testamentary incapacity. Dorsey v. Dorsey, 156 S.W.3d 442, 451 (Mo. Ct. App. E.D. 2005).
Lack of capacity litigation relies on medical records and the irrational conduct of the deceased prior to executing the Trust or will. For this reason, you will need an attorney who is familiar with the medical issues associated with capacity and has experience building a case to prove or disprove capacity.
An undue influence claim involves one person taking advantage of their position of power over another person. Sometimes this power can be used to influence an individual’s Last Will and Testament. An undue influence claim is asserted by arguing the testator was controlled by persuasion, pressure, and outside influences to the point that he did not act voluntarily but was instead subject to the will and power of another individual when executing his Last Will and Testament.
Generally, the party challenging the will in asserting undue influence has the burden to establish that undue influence did in fact exist, which can be met by showing that the undue influencer:
- stands to benefit under the will
- was in a confidential/fiduciary relationship to the decedent, and
- was “active” in procuring the will
These three elements of undue influence all have a body of case law interpreting their meaning, with the first two prongs being considerably easier establish. For the “active procurement” prong, Missouri case law lists non-exclusive factors to assist courts in determining whether there was active procurement. Listed below are a few examples:
- The beneficiary is present at the execution of the will
- beneficiary recommends a specific attorney to draft the will
- The beneficiary has extensive knowledge of the will prior to execution
- beneficiary instructs the testator on how to construct the will
- witnesses to the will are secured by the beneficiary
- beneficiary safeguards the will or insists on retaining possession of the Will
See, Simmons v. Inman, 471 S.W.2d 203 (Mo. 1971), Salisbury v. Gardner, 515 S.W>2d 881 (Mo. App. 1974), Duvall v. Brenizer, 818 S.W.2d 332 ( Mo. App. 1991).
Once the party challenging the will based upon undue influence successfully convinces the court that there should be a presumption of undue influence, the burden to prove there was no undue influence will shift to the party attempting to admit the will into probate.
Will Execution Formalities
When evaluating a Missouri will contest the case, the first consideration is whether or not the will was executed properly. Attacking a will based upon proper execution is much simpler and less expensive than it is to argue undue influence or lack of capacity.
In Missouri Wills contests, the requirements for proper execution and qualification rendering a will valid are controlled exclusively by statute.
The body of law that outlines the qualifications for making a valid Missouri Will is RSMo. §474.310. The law states that the testator (person making the Will) must be of sound mind, at least 18 years of age or any minor emancipated by adjudication or marriage, or entry into active military duty.
If it is believed that the testator was qualified to make the will, then one can look to RSMo. §474.320 in order to determine whether or not the Will was executed according to statutory formalities. Such formalities are listed below:
- Will must be in writing
- Will must be signed by the testator (or another at the testator’s direction)
- The testator must acknowledge signing (or directing another to sign) in the presence of two witnesses
These two witnesses must sign in both the presence of each other and of the testator [this factor is of critical importance and is the one most likely to be done improperly]. Missouri uses what is known as the “Line of Sight Test” wherein the testator does not actually have to see the witnesses sign the will, but must be able to see the witnesses were the testator to look. As a result, the testimony of eyewitnesses to the Will execution is of great weight.
Many Wills include a “self-proving affidavit,” which is an attachment with an oath that states that the testator and the witnesses signed in the presence of each other and took that oath in front of a notary public. The form of language is set forth in RSMo. §474.337. A properly-executed self-proving affidavit makes it more difficult to challenge a Will on the grounds of improper execution; however, sometimes the affidavit itself is improperly prepared and therefore requires careful scrutiny.