When a party believes that the decedent’s estate was depleted prior to his or her death as a result of gifts allegedly made by the decedent, an improvident gift claim may be asserted.

In contrast to testamentary dispositions, in which both a confidential relationship and suspicious circumstances are required to raise a presumption of undue influence, existence of a confidential relationship between a donee (the recipient of the gift) and donor, without more, raises a presumption of undue influence in the context of inter vivos gifts. 5 New Jersey Practice, Wills and Administration §62 at n. 15 (Alfred C. Clapp) (rev. 3d. ed. 1982) (quoting In re Dodge, 50 N.J. 192 (1967)); Pascale v. Pascale, 113 N.J. 20, 30 (1988). For this presumption to arise, it is not necessary to prove that the donee occupied “such a dominant position toward the donor as to create an inference that the donor was unable to assert his will in opposition to that of the donee.” Bronson v. Bronson, 218 N.J. Super. 389, 392 (App. Div. 1987). This is because it is presumed that “one is not likely to give away inter vivos what he still can enjoy.” 5 New Jersey Practice, Wills and Administration §62 at n.15.

Once the presumption is raised, the burden shifts to the donee, who must prove that no undue influence or deception was practiced, that the transaction was “fair, open and voluntary,” and that the donor “well understood” the transaction and its legal effect. Id.; In re Dodge, 50 N.J. at 227 (citing In re Fulper’s  Estate, 99 N.J. Eq. 293, 302 (Prerog. Ct. 1926)); Bronson v. Bronson, supra, 218 N.J. Super. 389, 394 (App. Div. 1987); Petruccio v. Petruccio, 205 N.J. Super. 577, 580 (App. Div. 1985).  Moreover, “where an inter vivos gift is alleged to have been made by a person who thereafter is adjudged [incapacitated], and the claim is contested by the [incapacitated person]’s guardian, the claimant must establish his case by clear and convincing proof.” Dodge, 50 N.J. at 227. In fact, the Pascale Court applied the clear and convincing standard to all cases in which the presumption of undue influence arises from an inter vivos gift.  113 N.J. at 30, 37.

In Seylaz v. Bennett, 5 N.J. 168 (1950), the Supreme Court of New Jersey considered a challenge to an inter vivos gift from an elderly man to his long-time companion and housekeeper. The Court began its analysis by recognizing that,

[w]here a person, enfeebled in mind by age or disease and so placed as to be likely to be subjected to the influence of another, makes a voluntary disposition of property in favor of that person, the burden is upon the recipient to prove the donor understood the nature of the act and that it was not done through the influence of the donee.

5 N.J. at 172.  Moreover, the Court posited that, when the donee is shown to be the dominant individual in the relationship, he has the burden of demonstrating, by clear and convincing proof, that the gift was “the voluntary and intelligent act of the donor.” Id. at 173. However, the Court concluded that the evidence presented did not suggest that the companion “in any way dominated and controlled” the donor, but that they were mutually dependent upon each other, evidenced in part by the will the housekeeper-donee had made leaving the house to the decedent in the event that the housekeeper predeceased him. Id. at 173-174. The Seylaz Court found as follows:

There is nothing in the record to suggest the conveyance was other than a voluntary and fully comprehended act carrying out the rational and considered intent of the grantor. [The grantee] had been [the grantor’s] constant companion for many years. She had performed the duties of a housekeeper, had cared for and nursed him through several illnesses, without wages or remuneration. It was natural and completely understandable that, under these circumstances, he, in his declining years, should be moved to endeavor to provide for her future security…. Close association, constant thoughtfulness and consideration and the services rendered, made her a natural object of his bounty. Id. at 174.

Courts have held that a gift may be set aside where a confidential relationship exists and the donor was not afforded independent legal advice, Petruccio v. Petruccio, supra, 205 N.J. Super. 577 (App. Div. 1985); however, even absent independent legal advice, the gift may be held to be effective where the donor understood the consequences of his actions. Pascale v. Pascale, supra, 113 N.J. 20 (1988).