Testamentary capacity and undue influence are the two most important things that can determine the validity of a will. A will is the legal instrument that allows an individual to create their wishes governing the distribution of their assets after they pass away. A will must be written with adequate mental capacity to withstand any challenge. If it can be proven that the testator (the person making the will) did not understand the nature of the will or did not have the capacity to make a will (testamentary capacity), then the ‘will’ will be nullified.
The Ontario Court of Appeal met with such a case where the will of late Assunta Maria Iannarelli was contested on the grounds of ‘undue influence.’. This led to a legal battle between her two daughters and beneficiaries of the estate—Bernadette and Angela.
Background of the Case
The testator, Assunta Maria, passed away in 2018, leaving behind two main assets: a house and a significant bank account. The house was jointly shared by her and her husband, who passed away in 2005. After that, she made a will in 2007, where she declared both her daughters as executors of the estate, equally sharing her assets. In the year of 2009, Bernadette took residence at her mother’s estate.
Cut to 2016, Assunta Maria made the following changes to her will—
(i) named Bernadette as executor;
(ii) stated that if she had not done so already, she made a gift of the McLeod House and its contents to Bernadette; and
(iii) directed that the residue of her estate be distributed equally to Angela and Bernadette.
The new will suspiciously favoured Bernadette, making her the sole executor and primary beneficiary and a joint owner of the house. Angela challenged the will in the Superior Court of Justice, disputing the validity of the new will and property transfer. She claimed that her mother did not possess the required mental capacity to make the above-listed changes to the will. Angela firmly believed that Bernadette had manipulated her mother leading her mother to change her wishes. Undue influence was in play!
What is undue influence in wills?
Undue influence in the context of wills refers to a situation where the testator (the person making the will) is coerced or manipulated and that the transfer or will were not what the testator or donor wanted. This influence must be such that it overpowers the testator’s free will, leading to a will that reflects the influencer’s desires rather than the testator’s.
Initial Court’s Judgement
After Angela made her case showing Bernadette’s undue influence on her mother’s 2016 will, she contended that the transfer of McLeod’s house was executed as compensation for caregiving.
After assessing the bank accounts of the late Assunta Mareia, all the evidence pointed in favour of Angela. The deceased had granted power of attorney to Bernadette over her bank account. After this, the court noted that the savings bank account of the deceased suffered from a significant drop, from $80,000 to $2500. Bernadette made these withdrawals over a period of 3 months. When asked for explanations for these transactions, Bernadette was unable to provide reasonable ones.
This strengthened Angela’s claim and supported the court’s finding that Assunta was under undue influence and lacked the necessary capacity to make the 2016 decisions. The 2016 will was rendered void, and Bernadette was ordered to repay $62,000 to her mother’s estate.
What are the risks of power of attorney?
The risks associated with granting a Power of Attorney (POA) in Canada primarily revolve around the potential for misuse or abuse by the appointed attorney. These risks include
- financial mismanagement,
- unauthorized transactions,
- and the possibility of the attorney acting beyond their granted authority
- Not acting in the best interests of the grantor, especially if there is a lack of oversight or accountability.
It is crucial to select a trustworthy and competent attorney and to clearly define the scope and limitations of their powers in the POA document.
Ontario Appeal Court Judgement
The appeals court judge upheld the final verdict of the trial judge in this case. Bernadette’s appeal in this case argued that applying a “presumption of undue influence” was an incorrect application of the law.
‘Presumption of undue influence’ is nothing but a legal concept that assumes undue influence was exercised, especially when one party is able to dominate the will of another (common in caregiver scenarios). Moreover, Bernadette failed to provide sufficient evidence to counter this presumption. Hence, her appeal was dismissed.
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