The following is an excerpt from §2.3 of CAUSES OF ACTION: PROBATE ACTIONS (IICLE®, 2021), available in print and as an e-book here.
When Is a Spouse a Fiduciary?
The marital relationship does not automatically trigger a presumption of undue influence, but the marital relationship does not protect parties if there are facts and circumstances that would lead a court to conclude that undue influence exists, especially if there are some indications of fraud. In re Estate of Glogovsek, 248 Ill.App.3d 784, 618 N.E.2d 1231, 188 Ill.Dec. 661 (5th Dist. 1993). Such a set of circumstances could involve transfers of property under a power of attorney from a second wife to the second husband and his biological children. Deason v. Gutzler, 251 Ill.App.3d 630, 622 N.E.2d 1276, 190 Ill.Dec. 959 (5th Dist. 1993).
A person who relies on his or her spouse during poor health in his or her later years does not trigger the presumption of a fiduciary duty. The courts will not impose a special legal burden on spouses who have a close relationship during their marriage, with “considerable influence” on each other. In re Estate of Baumgarten, 2012 IL App (1st) 112155, ¶24, 975 N.E.2d 651, 636 Ill.Dec. 625 (court emphasized that influence must be “undue”), quoting Glogovsek, supra, 618 N.E.2d at 1238.
The defendant in DeHart v. DeHart, 2013 IL 114137, ¶¶33 – 36, 986 N.E.2d 85, 369 Ill.Dec. 136 (discussing undue influence and testamentary capacity at length), cited Glogovsek, supra, in an attempt to evade the presumption of undue influence in her capacity as a spouse. The Illinois Supreme Court appears to require a case-by-case determination on the applicability of the presumption, looking at many factors, including the length of the marriage, the pattern of management of finances, and whether the spouse received a substantial benefit under the questioned document. Presumably, the test would also be applied to any prior significant transfers of assets or “will substitutes,” such as beneficiary designations and payable-on-death designations.
The Supreme Court also appears to have established a proper procedural inquiry for disputes that commonly involve second spouses and unrelated children or other “heirs of the blood.” Illinois Department of Human Services Medicaid planning regulations specifically allow transfers of funds between spouses for continued community residency. 89 Ill.Admin. Code §120.379(d). Other factors that conceptually might be considered to determine whether actions are appropriate are the financial needs of the spouse, the relationship between the transferor and his or her children/heirs, whether the lifetime or testamentary (through will, trust, or otherwise) transfer is in conformity with a prior estate plan or materially alters the plan, and, of course, whether the transferor was the recipient of independent advice from his or her attorney and/or accountant.
For more information on estate planning and probate law, see CAUSES OF ACTION: PROBATE ACTIONS (IICLE®, 2021). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.