It is important that a Will maker be of sound mind and clear intention when drafting a Will. That is not possible when someone takes advantage of their position of power or trust to exert undue influence over or behave unconscionably toward a Will maker. If undue influence or unconscionable conduct is proven, any instructions benefiting a person proven to have exerted undue influence, or engaged in unconscionable conduct, will be invalidated.
So, what is undue influence? There are two types of undue influence – actual undue influence and presumed undue influence.
Actual undue influence is rare but occurs when a stronger party emotionally dominates another to the extent that the dominated party loses their ability to exercise their own free will and the dominating party profits from that behaviour. It is usually very hard to demonstrate to a Court that a person has been subjected to actual undue influence.
Presumed undue influence occurs when two parties have a pre-existing relationship which is such that it raises a presumption that the recipient of the gift has influence over the Will maker. For example, the Will maker gifts everything to his overbearing neighbour, when he has two surviving children, who are in regular contact with him. In situations like this the law will presume that that any gift occurred as a result of undue influence and the Court will overturn such a gift, unless the recipient can prove that the gift was a spontaneous act of the Will maker, exercising their own free will.
There are certain types of relationships, which the law recognises automatically raise a presumption of influence – Doctor/patient, Solicitor/client, Guardian/ward and Parent/child (where the child gifts to the parent). This is not a definitive list, but provides examples of the types of relationships, which should bear closer examination in Wills.
The critical question is ultimately, whether the Will maker understands the nature and consequences of the gift; and the decision of the Will maker was the result of the exercise of independent judgment, free from any undue influence of the recipient of the Will maker’s gift.
So, what is unconscionable conduct? Unconscionable conduct occurs when a person receives a gift from a Will maker who has a special disability in circumstances where retaining that gift would be inconsistent with equity or good conscience. In other words, taking advantage of someone who is disadvantaged in relation to the intended transaction, for your own personal benefit. A person is regarded to be at a disadvantage if their disability affects their ability to judge what is in their own best interests. Examples include, illiteracy, or a lack of education; sickness; age; poverty; and lack of explanation, where an explanation is necessary. The most common characteristic is that one person in a transaction is at a serious disadvantage to the other.
The difference between undue influence and unconscionable conduct is the existence of the special disability. Undue influence is exercised against a person who has no special disability and unconscionable conduct is exercised against a person who has a special disability.
The person receiving the gift need not know about the donor’s disability, but will know of certain facts, which should make them question whether the donor suffers from a special disability, and takes advantage of the transaction anyway.
Contact MCG Legal for any enquiries you have in relation to undue influence.