Challenging Validity of a Trust

Question 1

Undue Influence - General Rule

Answer 1

Undue influence occurs when mental or physical coercion is exerted by a third party on a testator with the intent to influence the testator such that he loses control of his own judgment. If undue influence is shown, the trust may be invalidated in whole or in part.

Next –> Traditional v. Confidential approach (WRITE BOTH)

Question 2

Undue Influence - Traditional Approach

Answer 2

A contestant must show four elements (SMOC):

1) Susceptibility - the testator was susceptible to being influenced
2) Motive: the influencer has reason to benefit
3) Opportunity: the influencer had opportunity to influence
4) Causation: the influencer caused an unnatural result

Question 3

Undue Influence - Confidential relationship

Answer 3

A presumption of undue influences arises when:

1) The principal beneficiary of the will has a confidential relationship with the testator
2) The principal beneficiary participated in executing the will and
3) The gift to the beneficiary is unnatural

If a presumption arises, the beneficiary must show through CLEAR AND CONVINCING evidence that he did not exercise undue influence. If the beneficiary exerted undue influence, he will only receive what he would be entitled to under an intestate approach (if the beneficiary is a friend of the testator he would receive nothing because friends do not take under intestacy, a family member would take an intestate share).

CA: rebuttable presumption that gift to person who drafted will = invalid.

Question 4

Fraud

Answer 4

A trust can be invalidated due to fraud. Fraud requires a
1) misrepresentation made by a beneficiary with both the intent to deceive the settlor and the purpose of influencing the testamentary disposition.

Question 5

Fraud in the inducement

Answer 5

A misrepresentation that causes the trustor to make a different trust that he otherwise would have made. It must be shown that the trustor would not have made the gift if he had known the truth.

Question 6

Fraud in the execution

Answer 6

A misrepresentation as to the trust itself or its contents (trustor does not know he is creating a trust or is not told the true content of the trust).