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Telling the Truth Could Cost You Your Inheritance

Omitted Heir Can Challenge Bequest to Tattletale

From Mark J. Welch's Estate Planning Advisory newsletter (January 1996)

In the December case of Hagen v. Hickenbottem (H012841, 95 CDOS 9745, filed 12/19/95), an elderly woman had prepared an estate plan that left all her property to her only grandson, Michael.

In 1987, during Michael's senior year of high school, he developed a drug problem, and he entered a drug rehabilitation program the next year. Michael later said he did not tell his grandmother about these problems, in part because he thought the information would be "harmful to my grandmother."

At some time, the grandmother's cousin, Terry, reported the grandson's drug problem to Michael's grandmother. In 1988, the grandmother revised her will, omitting Michael completely and leaving most of her property to Terry.

In 1989, the grandmother's health declined, and it became clear that she needed daily care. Over objections from other family members, Terry arranged for the grandmother to move from Santa Barbara to Santa Cruz, although the grandmother earlier had wanted to remain in her home in Santa Barbara.

During the grandmother's final years, she had little contact with her family other than her cousin Terry, and Michael claimed that Terry interfered with attempts to reach the grandmother by telephone. However, it was undisputed that Terry was the only relative willing and able to provide the level of care the grandmother needed to avoid moving to a nursing home. The grandmother died in 1991 at the age of 96.

After the grandmother's death, Michael contested the will and trust that left most property to Terry, and alleged that Terry had exercised "undue influence" over the grandmother in order to obtain her property. Terry filed a motion for "summary judgment" in the trial court in Santa Cruz, claiming that her disclosure of Michael's drug problem was not actionable because it was true. The trial court agreed, and entered judgment against Michael.

On appeal, the California Court of Appeal reversed the trial court's ruling, finding that "undue influence" can be based on truthful statements. The court pointed out that "undue influence" exists when one person influences another in order to "destroy the testator's free agency and substitute for his own another person's will." As an example, the court noted that an influencer who truthfully claims that natural heirs "do not need your money as much as I do," could still be denied any inheritance if these claims were made in a way that overpowered the person's free will.

Although the Court of Appeal reversed the trial court's earlier ruling, that doesn't mean that Michael will win the case. Instead, the summary judgment in Terry's favor will be set aside, and now Michael must proceed to prove to a judge that the alleged facts constitute "undue influence." The Court of Appeal even commented that "the record before us suggests that [Michael's] prospects of ultimately proving undue influence are slight."

When I encounter clients who choose to omit children or grandchildren from their estate plans, I ask detailed questions, and I don't permit the "favored" person to participate in estate-planning meetings. Sometimes, I suggest that clients make modest bequests (directly or in trusts managed by other family members) for the benefit of disfavored children or grandchildren, so that those children have something to lose if they contest the estate plan. I also encourage my clients to discuss their plans and goals with the omitted family members; not only does this avoid a surprise after my client's death, but it also gives the omitted heir a chance to make changes that might lead my client to restore that heir's bequests in a future estate plan.

Note: The Web link to the appellate court's decision (Hagen v. Hickenbottem, H012841, 95 CDOS 9745, filed 12/19/95), will only remain effective until February. By then, you should be able to access the opinion by searching for "Hagen" and "Hickenbottem" on the LLR online service.