Dementia, Undue Influence and Testamentary Capacity

In Elder Estate v. Bradshaw, 2015 BCSC 1266, disinherited family members questioned the testamentary capacity of their elderly uncle who, while in the early stages of Alzheimer’s-related dementia, executed a will bequeathing all of his estate to his younger housekeeper/caregiver. The disinherited nephews challenged the validity of the late-in-life change in disposition based on allegations of lack of testamentary capacity due to dementia, and further alleged undue influence, coercion, and fraud on the part of the caregiver. Also questioned on the basis of undue influence, coercion, and fraud was an inter vivos transfer, made shortly before their uncle’s death, of $120,000 to a joint account with the caregiver, as the his unequal contribution to their planned joint purchase of a shared residence.

Dementia is a red flag, but testamentary capacity is a question of fact

The court dismissed the claims of the disinherited nephews as the preponderance of evidence negated the suspicions that arose from the dementia diagnosis, the relationship of dependency between the deceased and the caregiver, and the bequest of the entirety of the estate to a person lacking kinship with the deceased.

The decision provides a useful summary of the legal framework for analyzing a proof in solemn form claim when issues of testamentary capacity and undue influence are raised, which is highly relevant given the aging population and related rise in conditions such as dementia, Parkinson’s, and Alzheimer’s, which impact memory and cognition.

Key facts: Dementia diagnosis, no next of kin

Mr. Elder never married or had any children. He executed a will in 1987 (the “1987 Will”) that bequeathed his estate to his sister, Georgina, and in the event of her predeceasing him, to her three sons (the “Defendants”), in equal shares. Mr. Elder kept in regular contact with Georgina, but had not had contact with her sons since the late 1990s.

Ms. O’Brien, who was in her 50s, became Mr. Elder’s housekeeper in 2006 and gradually became his caregiver. In 2008, Mr. Elder was diagnosed with dementia. Over the following years, he was monitored by a team of health care professionals who found his mental state to be relatively stable.

Georgina predeceased Mr. Elder on March 26, 2011. Mr. Elder subsequently executed a new will on April 27, 2011 (the “2011 Will”) that bequeathed his entire estate to Ms. O’Brien if she survived him and, if not, to the Defendants. Also around that time, Mr. Elder and Ms. O’Brien decided to move in together so that she could provide him with full time care. Mr. Elder transferred $120,000 to Ms. O’Brien as his contribution to the joint purchase of that residence. Mr. Elder died suddenly on July 20, 2011 at age 80. After his death, Ms. O’Brien used the $120,000, along with her agreed-upon contribution of $70,000, to make the property purchase.

The Defendants, who had not seen their uncle in over 15 years, were suspicious of the circumstances. An action was commenced for proof in solemn form of the 2011 Will and to assess the validity of the inter vivos transfer of funds to purchase the residence.

Legal framework when testamentary capacity is challenged

In an action for proof of will in solemn form, the party propounding the will must prove on a balance of probabilities that the will was executed in compliance with the statutory formalities, that the will-maker knew and approved of the contents of the will, and that the will-maker had testamentary capacity: Vout v. Hay, [1995] 2 SCR 876 at paras. 19-20.

That being said, there are nuances with respect to the burden of proof in litigation regarding contested wills due to the interrelation of the doctrine of suspicious circumstances and the issues of testamentary capacity, knowledge and approval, undue influence and fraud. In rendering his decision, Meiklem J.’s reasons provide careful analysis of the applicable presumptions and the shifting burden of proof:

1. Was the will executed in compliance with statutory formalities?

• Per Vout v. Hay at para. 26, in certain circumstances, the propounder of the will is aided by a rebuttable presumption of validity: if the will was duly executed in accordance with the requisite statutory formalities after being read over to or by a testator who appeared to understand it, it is presumed the testator possessed the requisite testamentary capacity and knew and approved of its contents.

Evidence of the solicitor who assisted Mr. Elder established compliance with statutory formalities in respect of the 2011 Will. As such, the presumption of validity applied, and the onus was on Mr. Elder’s nephews to provide evidence to rebut the presumption.

2. Was there evidence of “suspicious circumstances” sufficient to rebut the presumption of validity?

• The presumption of validity may be rebutted by evidence of well-grounded suspicions relating to one or more of the following circumstances:

(i) surrounding the preparation of the will;

(ii) tending to call into question the capacity of the will-maker; or

(iii) tending to show that will-maker’s free will was overborne by acts of coercion or fraud.

There was no evidence of suspicious circumstances surrounding the preparation of the 2011 Will; Ms. O’Brien did not influence Mr. Elder to have a new will prepared or play any role in conveying his instructions to the solicitor. Nor was there evidence of any coercive act or course of conduct on the part of Ms. O’Brien in respect of the preparation of the 2011 Will.

However, Meiklem J. found the 2008 dementia diagnosis raised suspicions about Mr. Elder’s testamentary capacity sufficient to rebut the presumption of validity and shift the burden of proving Mr. Elder’s testamentary capacity in April 2011 to Ms. O’Brien.

3. Has the propounder of the will established testamentary capacity and knowledge and approval on a balance of probabilities?

• The seminal case defining the meaning of testamentary capacity is Banks v. Goodfellow [1861-73] All E.R. Rep 47 at 56:

It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and with a view to the latter object that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties; that no insane delusion shall influence his will on disposing of his property, and bring about a disposal of it which would not have been made otherwise.

There was ample evidence, including that of Mr. Elder’s home support worker, his neighbours, his financial service advisor, his realtor, his doctors, and his solicitor to establish that Mr. Elder was “with it” and had a clear understanding of what he wanted to do with his property. His dementia was relatively stable.

There was also evidence of the tenuous nature of any familial connection between the Defendants and Mr. Elder. Conversely, there was evidence that Ms. O’Brien’s relationship with Mr. Elder was one of sincere care and concern. In light of these relationships, Mr. Elder’s decisions as to whom he would leave his property were reasonable.

As such, Meiklem J. was satisfied that Ms. O’Brien established testamentary capacity, knowledge and approval on a balance of probabilities.

4. Have the Defendants established undue influence or coercion on the part of Ms. O’Brien in respect of the 2011 Will?

• In order to invalidate a will on the grounds of undue influence, the asserting party must prove that the influence exerted against the will-maker amounted to coercion, such that the will did not reflect the true intentions of a free will-maker and was not the product of the will-maker’s own act. The undue influence must constitute coercion which could not be resisted by the will-maker and which destroyed his or her free agency: Leung v. Chang, 2013 BCSC 976 at para. 35.
• While it did not apply on these facts, note that the new onus of proof regarding undue influence, set out in s. 52 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13, applies where the will-maker died after March 31, 2014.

Ms. O’Brien’s relationship with Mr. Elder and the potential for undue influence was scrutinized frequently during his lifetime by institutional service providers (the “Geriatric Assessment Team”), and to a lesser extent, by Mr. Elder’s solicitor, realtor, and financial service advisor. All these witnesses were specifically looking for evidence of undue influence and saw none.

Certainly Ms. O’Brien had legitimate influence over Mr. Elder, evidenced by her proposing the joint house purchase, but there was no evidence that she coerced him into doing something he did not want to do or that was not his own choice. In respect of the 2011 Will, he actually rejected her advice that he did not need to change his will.

Meiklem J. held that the Defendants failed to establish undue influence or coercion on the part of Ms. O’Brien in respect of the 2011 Will. As such, the 2011 Will was admitted into probate.

Analysis of the inter vivos transfer

Meiklem J.’s decision on the validity of the 2011 Will rendered this issue somewhat superfluous, because if the inter vivos transaction was invalidated, the disputed funds would fall into Mr. Elder’s estate (all of which went to Ms. O’Brien).

At any rate, Meiklem J. found that the evidence fell short of establishing a special relationship of influence in the area of managing Mr. Elder’s affairs or giving him advice. Further, while Mr. Elder was becoming more dependent upon Ms. O’Brien as time passed, he was not completely dependent upon her. Institutional service providers and home support workers were routinely involved in his care.