Summary of Haynes v. First Nat’l Bank of N.J., 87 N.J. 163 (1981)
Facts: Pls are two of six grandchildren of the deceased Mrs. and Mr. Dutrow. Mr. D was an employee of Purina and acquired significant stock–$8 million. When he died that estate passed to Mrs. D and their two daughters Betty and Dorcas. Betty died with her two sons surviving her. B/c of Mrs. D’s age she suffered from numerous ailments and resided with Dorcas. Shortly after, many will and trust changes began. Atty Stevens was on retainer with Mrs. D for years. Dorcas’ atty, Buttermore, was brought into the case by Dorcas. He made several significant changes which all but eliminated Betty’s children as beneficiaries and made Dorcas the sole recipient of a trust w/ no invasion restrictions.
Issue: Whether the will is invalid on the grounds of undue influence attributable to the fact that the attorney, who advised the testatrix and prepared the instrument, was also the attorney for the principal beneficiary? Whether an in terroremclause, in the testamentary instrument, is enforceable under New Jersey common-law, since the decedent died prior to enactment of statute that invalidated such clauses in wills?
Holding: Remanded for further finding on U.I. and the in terrorem clause in the will and trusts instruments are unenforceable.
Procedure: Mrs. D passed and her final will was admitted in probate. Trial ct held circumstances created presumption of undue influence, but that had been rebutted by Df, and the in terrorem clause was unenforceable. Appellate Division Affirmed lack of U.I. sustaining the probate of the will, but disagreed with the in terrorem ruling. N.J. S.Ct Reversed & Remanded.
Rule: Undue influence is the mental, moral or physical exertion which has destroyed the free agency of a testator by preventing the testator from following the dictates of his own mind and will, accepting the domination and influence of another. The burden rests with the contestant unless a confidential relationship exists between testator and beneficiary.
In Terrorem Statute: A provision in a will purporting to penalize any interested person for contesting the will or instituting any proceedings related to the estate is unenforceable if probable cause exists for instituting proceedings.
Rationale: The first element necessary to raise a presumption of U.I. is the presence of a confidential relationship arising where trust is relaxed by the testator’s weakness or dependence or where the parties occupied relations in which reliance is natural. 2) the presence of suspicious circumstances attendant on the execution of the will, which w/ confidential relationship, shifts the burden. Such circumstances need be no more than slight. Normally, once the presumption has been established and the burden shifts, the proponent must overcome by a preponderance of evidence to prove that there was no U.I. Hence, both the burden of proof and the burden of going forward with proof shift. Cts, emphasizing the need for a lawyer’s independence and loyalty, have imposed a higher burden of proof than that which normally accompanies civil litigation. Rather than a preponderance of evidence, the standard that conforms most comfortably with the level of proofs required in this context is by clear and convincing evidence.
A statute which postdates the in terrorem clause, but nonetheless invalidates the same, is indicative of the legislative intent to create policy.