Estate of Unke, Matter of

• Decision Date: 03 June 1998
• Docket Number: 20245,Nos. 20232,s. 20232
• Citation: 1998 SD 94,583 N.W.2d 145
• Parties: In the Matter of the ESTATE OF Elizabeth Anne UNKE, Deceased. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 145

583 N.W.2d 145

1998 SD 94

In the Matter of the ESTATE OF Elizabeth Anne UNKE, Deceased.

Nos. 20232, 20245.

Supreme Court of South Dakota.

Considered on Briefs June 3, 1998.

Decided Aug. 12, 1998.

Dean A. Hammer, Dell Rapids, and John M. Cogswell, Buena Vista, Colorado, for appellant Anne M. Ireland.

Roger R. Gerlach, Salem, for appellee Michael Unke.

MILLER, Chief Justice.

¶1 Anne Ireland and Michael Unke are siblings. Anne appeals from the trial court's decision admitting their mother's will to probate. Michael appeals from the trial court's decision removing him as personal representative of their mother's estate, as well as trustee over Anne's share of the estate property. We affirm.

FACTS

¶2 Walter and Elizabeth Unke had two children, Anne and Michael. Michael has no children, while Anne has two daughters. The family was financially successful, owned two companies, and had several investments. Walter died on September 13, 1990. After his death, Michael, who is an attorney, took over much of the administration of the companies and the family's investments. Anne had little to do with the day-to-day operations of the family businesses.

¶3 Elizabeth died on December 15, 1995. Her will, executed on November 15, 1993, provided that Michael would receive half of her property outright, and that he would also be the personal representative of her estate, as well as trustee of a trust over Anne's half of the property. Anne objected to the probate of the will, claiming it was the product of undue influence, because Michael had a confidential relationship with his mother and he had helped draft it.

¶4 To rebut the presumption that the will was the product of undue influence, Michael, attempting to explain why Elizabeth set up the trust, presented evidence that Anne had a drinking problem and was a spendthrift. It was also shown that Elizabeth and Anne had purchased a house together in the spring of 1992, and that there was much tension between Elizabeth, Anne, and Anne's two daughters while they lived in the same house. During this time, Elizabeth apparently became worried about Anne's behavior and her spending habits. There was testimony that, in the fall of 1992, Elizabeth was shown an accounting indicating that in a nine-month period Anne had gone through about $1 million in her account. Elizabeth apparently was also aware that Anne had dreams in which her dead father would talk to her and tell her that Michael was "robbing her blind" and to get a lawyer to look into it. Elizabeth was concerned that, with Anne's habits, there would be nothing left for Anne's two daughters.

¶5 In early November, 1993, Elizabeth approached Michael expressing concerns over Anne's behavior. He suggested she contact an attorney and recommended some names to her. Elizabeth decided to meet with Gale Fisher, a Sioux Falls attorney who had previously represented the family. She and Michael first met with Fisher on November 11, 1993. Elizabeth expressed her concerns over Anne's behavior to Fisher and stated she was interested in setting up some sort of conservatorship or guardianship because of that behavior. ¹ Fisher did not believe establishing a conservatorship was proper, but thought it best to place the property in trust. Elizabeth's will was then discussed, however, since at that time Fisher was too busy, it was agreed that Michael would draft the will. Elizabeth and Fisher next met on November 13 to review the will which Michael had prepared. Michael was present for at least part of that meeting, but remained silent throughout. Corrections were suggested for the will and Michael returned to his office to make them. On November 15, 1993, Elizabeth brought the will to Fisher once again. Again, some changes were needed and Michael made them. The final draft of the will was then duly executed by Elizabeth that same day. Later that day, Elizabeth accompanied Michael to his office where she signed a deed making him her joint tenant on some lake property she owned.

¶6 The will provided that Elizabeth's property was to be divided evenly between Michael and Anne. However, Michael was to receive his share outright, and Anne's was to be placed in trust with Anne's daughters as residuary beneficiaries. Michael was designated the personal representative of the estate and trustee over the trust.

¶7 On July 28, 1997, after the trial on this matter, the court issued its findings of fact and conclusions of law, concluding there was a presumption of undue influence, but that it had been rebutted by Michael. Further, the court held Anne had failed to establish the will was invalid based on undue influence. The trial court also replaced Michael with the First National Bank of Sioux Falls as trustee and personal representative.

¶8 Anne appeals, raising the following issues:

1. Whether the trial court erred in finding there was no undue influence.

2. Whether the trial court's findings of fact and conclusions of law on certain matters were incorrect.

3. Whether the trial court erred in failing to make any findings that the will was the product of fraud.

¶9 By notice of review, Michael raises the following issue:

1. Whether the trial court erred in finding it was not in the best interests of the estate or trust to have Michael as personal representative or trustee.

DECISION

¶10 1. Whether the trial court erred in finding there was no undue influence.

a. Standard of review and analysis of an undue influence issue.

¶11 The issue of whether undue influence exists is a question of fact for the trial court to determine. In re Estate of Madsen, 535 N.W.2d 888, 891 (S.D.1995). We will not set aside a trial court's findings of fact unless they are clearly erroneous. In re Estate of Elliott, 537 N.W.2d 660, 662 (S.D.1995) (citing SDCL 15-6-52(a); In re Estate of Till, 458 N.W.2d 521, 523 (S.D.1990); In re Estate of Weickum, 317 N.W.2d 142, 145 (S.D.1982); In re Estate of Hobelsberger, 85 S.D. 282, 289, 181 N.W.2d 455, 458 (1970)). A trial court's finding is clearly erroneous if, "after reviewing the entire evidence, we are left with the definite and firm conviction that a mistake has been made[.]" Id. (citations omitted). All conflicts in the evidence must be resolved in favor of the trial court's determinations. Till, 458 N.W.2d at 523. "The credibility of the witnesses, the weight to be accorded their testimony, and the weight of the evidence must be determined by the trial court and we give due regard to the trial court's opportunity to observe the witnesses and the evidence." Elliott, 537 N.W.2d at 662. We review any documentary or deposition evidence under a de novo standard of review. Id.

¶12 Under our settled law, to establish the existence of undue influence a will contestant must prove four elements by a preponderance of the evidence: "(1) decedent's susceptibility to undue influence; (2) opportunity to exert such influence and effect the wrongful purpose; (3) a disposition to do so for an improper purpose; and (4) a result clearly showing the effects of undue influence." Elliott, 537 N.W.2d at 662-63 (citations and internal quotations omitted).

¶13 However, a presumption of undue influence arises "when there is a confidential relationship between the testator and a beneficiary who actively participates in preparation and execution of the will and unduly profits therefrom." Madsen, 535 N.W.2d at 892 (citations and internal quotations omitted). When such a presumption arises, the burden of going forward with the evidence shifts to the beneficiary to show he took no unfair advantage of the decedent. In re Estate of Metz, 78 S.D. 212, 222, 100 N.W.2d 393, 398 (1960). The ultimate burden remains on the person contesting the will to prove the elements of undue influence by a preponderance of the evidence. Madsen, 535 N.W.2d at 893.

¶14 Because Anne attacks and criticizes the test for undue influence used by the trial court, and because the test has not always been clearly stated by us, we take this opportunity to clarify the test by stating it correctly: the burden of going forward with the evidence in an undue influence case does not shift to the beneficiary unless a presumption of undue influence is established.

b. Undue influence issue analyzed in this case.

¶15 Anne argues the trial court erred in determining that Michael rebutted the presumption of undue influence which had arisen, and also that Anne had failed to establish the existence of undue influence. We disagree.

¶16 In determining that a presumption of undue influence had arisen, the trial court first found that a confidential relationship existed between Michael and Elizabeth. "A confidential relationship exists whenever a decedent has placed trust and confidence in the integrity and fidelity of another." Madsen, 535 N.W.2d at 892 (citations and internal quotations omitted). In ascertaining if a confidential relationship exists, we consider such factors as the amount of time the beneficiary spent with the testator, whether the beneficiary handled many of the personal or business affairs of the testator, and whether the testator ever sought the advice of the beneficiary. Till, 458 N.W.2d at 524. Michael managed the daily operations of the family business, handled Elizabeth's financial affairs when she was traveling, and gave her advice on family matters, including her concerns over Anne's behavior. Clearly a confidential relationship existed between Michael and his mother.

¶17 The trial court also examined the other two factors needed to raise a presumption of undue influence, that is, whether Michael participated in the preparation and execution of Elizabeth's will, and whether he unduly profited therefrom. The trial court found Michael was involved in drafting the will: He had more estate planning experience than Fisher; he wrote the boiler-plate provisions of the will; he had his secretary type it; and he helped write some of the non-boilerplate...