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Estate Planning Attorney’s Testimony Is Key Evidence of Decedent’s Mental Capacity and Absence of Undue Influence

Matter of Varrone, 72 Misc. 3d 1201 (N.Y. Surr. Ct. June 17, 2021)

Cynthia Varrone passed away on July 4, 2018. She had five children, but her last will and testament left her entire estate, including her real property, to her son John and specifically disinherited her other children. In addition, Cynthia transferred her real property to John during her life: first, through the execution of a deed dated April 21, 2010, which transferred the property from her sole ownership to herself and John as joint tenants with rights of survivorship, and then by a deed dated October 15, 2013—the same date Cynthia signed her will—transferring full ownership of the property to John and divesting herself of any interest in it.

Another son, Charles, as limited administrator, filed a petition seeking return of the real property to Cynthia’s estate. He asserted that Cynthia suffered from dementia and lacked the capacity to transfer the property to John and that John had exerted undue influence over Cynthia to induce her to execute the deeds. John filed a motion for summary judgment seeking the dismissal of the petition.

Because John had not provided any consideration for the inter vivos gift of the property, the court held that he was required to prove three elements by clear and convincing evidence: (1) the donor’s intent to make a present transfer; (2) actual or constructive delivery of the gift to the donee sufficient to divest the donor of dominion and control over the property; (3) acceptance on the part of the donee.

Because the recording of the deeds gives rise to a presumption of delivery and acceptance, the donor’s intention is paramount in determining whether the transaction was a valid inter vivos gift. Accordingly, it was necessary for John to demonstrate prima facie that Cynthia intended to make an irrevocable present transfer of ownership of the property. In support of his motion for summary judgment, John submitted substantial evidence, including copies of the deeds, Cynthia’s will, and the testimony of Cynthia’s estate planning attorney.

The court held that the deeds themselves were evidence of Cynthia’s donative intent, and that although her will, by its nature, could not serve as evidence of a present intent to give the property to John, it was evidence of her relationship with John at the time of the transaction. In addition, the disinterested deposition testimony of Cynthia’s attorney, Jake Lasala, was further evidence of her donative intent. He testified that he prepared the deeds at Cynthia’s request after discussing the transactions with her. In addition, he personally supervised their execution and arranged for their recording. He repeatedly indicated that Cynthia’s main goal was to ensure that John, who was unmarried, lived with her, assisted her, and would continue to have a place to live. The will, which also devised the real property to John, was prepared to provide Cynthia additional assurance that John would receive the property.

Although the burden was on John to show that Cynthia was competent, the court noted that the law presumes that individuals have capacity, recognizing that those who are elderly and even mentally weak may still be able to comprehend the meaning of a deed or a transfer of property. Further, Lasala provided adequate evidence of her capacity by testifying that at the time of the 2010 and 2013 transfers, there was no indication that Cynthia did not know what she was doing or signing. Lasala also provided prima facie evidence of the lack of undue influence by testifying that he had taken direction solely from Cynthia in relation to the transfers and that they had been executed at her behest.

Takeaways: Based on reported decisions, undue influence claims relating to actions of decedents with dementia are on the rise. The best way to combat them is for the responsible trusts and estates attorney to personally supervise the preparation and execution of the relevant documents and maintain notes of discussions with the client.

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