Gold Diggers Beware

By Lynda Chung

In the world of trust and estate litigation, claims of undue influence are nothing new. These suits usually concern a caregiver, mistress, or other interloper coercing an unfair share of an inheritance from the deceased.  However, far less common are undue influence cases brought against the wife of the deceased. That is … until a case earlier this year made it clear that marriage is not a license to steal. Indeed, all would-be “gold-diggers” should take note, as this decision is a potential game changer.

In this case, the deceased took the defendant as his third wife in 1999. After divorcing six months later, the couple remarried in 2005. The deceased was a retired real estate magnate worth millions, and had multiple children and grand children from previous marriages, while the defendant had two children of her own. Needless to say, this type of blended-family can be a powder keg when it comes to inheritance.

At the time of his marriage, most of the decedent’s real estate holdings were kept in a trust, which provided for his children and grand children. However, in mid-2005 (after remarrying Wife No. 3), he began introducing a series of amendments to the trust, providing his wife with more and more of his inheritance, and finally giving her the power to disinherit his own children altogether after his death.

Upon his death, his eldest children brought a suit alleging the defendant unduly influenced the deceased into modifying his trust, and that the way in which she freely spent her husband’s money constituted a breach of fiduciary duty. The court found that the deceased “did not know the extent of [defendant’s] spending,” and that “while it is not uncommon for a spouse to spend money or purchase items of which the other is unaware, and the line between such conduct and financial abuse is not always clear, what [defendant] did in this case went well beyond the line of reasonable conduct and constituted financial abuse.”

Widespread financial conflict in blended families is already quite common, but the result of this decision could have far reaching implications for future situations in which a new spouse attempts to disinherit the rest of the family.