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Posted on Dec 8 2013 11:38PM by Attorney, Jason A. Lee
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The Tennessee Court of Appeals decision of
Tamala
Teague v. Garnette Kidd, No. E2011-02363-COA-R3-CV, 2012 WL 5869637 (Tenn.Ct.App.
2012) discussed confidential relationships under Tennessee and what
duties arise in such relationships. This
is important in the context of Tennessee estate law because often disputes
arise about certain transactions around the time of death. Claims of undue influence arise because of
these transactions especially when one party has a power of attorney over an
elderly individual.
A confidential
relationship is a relationship where confidence is placed by one in the other
and the recipient of that confidence is the dominant personality, with the
ability, because of that confidence, to influence and exercise dominion over
the weaker or dominated party. In
general terms, it is any relationship that gives one person the ability to
exercise dominion and control over another. The burden of proof regarding a confidential
relationship rests upon the party claiming the existence of such a
relationship. Confidential relationships
can assume a variety of forms, and thus the courts have been hesitant to define
precisely what a confidential relationship is.
Confidential
relationships generally arise in two situations: (1) “legal relationships” and
(2) “family and other relationships.” In
the “legal relationships” context, a confidential relationship arises when
there is some legal connection between the dominant party and the weaker party,
such as when a dominant party is granted a power of attorney. Indeed, “a confidential relationship arises as a matter of law when
an unrestricted power of attorney is granted to the dominant party.” Id. (emphasis added).
In contrast, “[f]amily and other relationships” do not necessarily give rise to
a confidential relationship per se; therefore, to establish a confidential
relationship in this situation, contestants must prove the elements of
“domination and control” in order to establish that the free will of the weaker
party was destroyed and that the will of the dominant party was substituted.
Teague at 8
(citations omitted).
LEGAL RELATIONSHIP:
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Posted on Feb 26 2013 10:03AM by Attorney, Jason A. Lee
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Under Tennessee law any conveyance by the decedent that is made in a fraudulent manner to children or any other individual in order to defeat the "surviving spouse’s distributive or elective share" is voidable at the option of the surviving spouse. This situation can arise where an individual knows he or she is going to die soon, and therefore conveys property or other assets to another individual in order to try to remove it from the estate so it would not go to the surviving spouse. Since the spouse has a right to certain benefits under Tennessee Law including an elective share, such a distribution that is done for a fraudulent purpose can be voided.
T.C.A. § 31-1-105 is the Tennessee statute that basically prevents an individual from successfully transferring assets prior to death in order to reduce the value of the estate that is subject to the elective share option under Tennessee law. T.C.A. § 31-1-105 provides as follows:
Any conveyance made fraudulently to children or others, with an intent to defeat the surviving spouse of the surviving spouse's distributive or elective share, is, at the election of the surviving spouse, includable in the decedent's net estate under § 31-4-101(b), and voidable to the extent the other assets in the decedent's net estate are insufficient to fund and pay the elective share amount payable to the surviving spouse under § 31-4-101(c).
As a result, if gifts or conveyances are made to children or any other individual, those gifts or conveyances can be voided by the court if requested by the surviving spouse. This will be done to protect the surviving spouse's entitlement to an elective share. The elective share of a surviving spouse will be discussed in a subsequent post however, the main part of the statute, T.C.A. § 31-4-101(a) provides as follows:
(a)(1) The surviving spouse of an intestate decedent who elects against taking an intestate share, or a surviving spouse who elects against a decedent's will, has a right of election, unless limited by subsection (c), to take an elective-share amount equal to the value of the decedent's net estate as defined in subsection (b), determined by the length of time the surviving spouse and the decedent were married to each other, in accordance with the following schedule:
If the decedent and the surviving spouse were married:
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