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by Robin Gerber, AARP en Nuevo México, February 2009
The Alter family was unraveling. It all started when 80-year-old Zal Alter set up a trust for his two adult daughters, Susan and Wendy. He had inherited valuable real estate in San Francisco, where the family lived. His attorney suggested setting up the trust as part of his estate plan.
But soon after the Alter family trust was established in 1989, Zal’s health, on the decline for more than a year, grew worse. His wife, Jane, called their older daughter, Susan, saying that Zal was not balancing the books. Jane, who was 78 at the time, felt she couldn’t help Zal anymore and asked Susan to take over.
Susan arrived at her parents’ house to find bills and papers all over the floor, not terribly unusual because it was tax season. But while tackling the chaos, Susan found a letter from her father’s accountant. It said he was going out of business and could no longer handle her father’s account. Susan stepped forward, rolled up her sleeves and began helping Zal pay bills and manage the family company on a regular basis. The business consisted of two properties left to Zal and his sister by their father. One property was leased for commercial space, the other had both apartments and commercial rentals. The properties were valued at more than a million dollars and provided ongoing income.
Meanwhile, Jane was at the end of her rope. She and Zal were at odds. According to court documents, relatives described Zal as domineering, argumentative and abusive; Jane was described as kind and loving, someone who liked to do things for other people but who could not put up with Zal any longer. After 50 years of marriage, Jane left, asking Susan to help her move out. Around the same time, the Alters' younger daughter, Wendy, also divorced. She moved closer to her mother, who had moved into a condominium by herself. Jane began to grow increasingly irritated with Zal and she worried about her financial security.
Later, in the summer of 1990, based on advice from his estate attorney, Zal asked Susan to prepare checks as family gifts. He gave each daughter $20,000. Susan’s two children and Wendy’s two children each received $10,000. Zal also gave $10,000 to Susan’s husband, a move that would soon spark a family war. Wendy promptly complained to her mother about the extra money that went to Susan’s family. Wendy did not understand why she should receive less just because she was divorced.
In mid-September of the same year, Zal fell and became incapacitated. As a result, he gave Susan more responsibility for the family finances, including the authority to sign checks.
Weeks later, Wendy met with her parents’ attorneys and accused Susan of mismanaging the family finances. Susan, about to leave on a three-week European holiday, was not there to defend herself. The two sisters had never been close, but Wendy’s accusations created a tension that would never heal. When Susan returned from Europe, she found that Wendy and her mother were accusing her not only of mishandling the family’s money but also of committing fraud.
Susan had been close with her mother. “Every day, we talked,” Susan said last month in an interview. She made sure that Jane’s money from the trust arrived on time, even arranging an extra amount when Susan was going on vacation to be sure her mother was not left short of funds. But now Jane was turning against her daughter. “I was devastated,” Susan said. “I went to get counseling. It was horrible.”
In March 1991 Jane made the first overtly hostile move aimed directly at Susan. Jane wrote a new will, which included Wendy and both daughters’ children but excluded Susan’s husband and Susan herself. Jane also named Wendy as executor of her estate. Zal, now in the early stages of Alzheimer’s disease, was not told.
Going to court
A month later, the battle escalated. Wendy and Jane filed a petition in San Francisco Superior Court demanding that Susan, who had been named by Zal as the person in charge of the Alter family trust, be replaced. They accused Susan of unilaterally taking control of the trust’s affairs, overpaying herself for her duties as trustee and failing to pay for Zal’s care. Referring to Zal’s original cash gifts, Jane said in the petition that Susan’s side of the family received $50,000, while Wendy’s side of the family received only $40,000. “I object to this unequal pattern of giving,” Jane said. The petition proposed that Jane, Wendy and Susan serve as co-trustees. The Alter family trust declined that proposal, and in July 1991 an impartial consultant called an independent fiduciary was appointed to oversee the trust.
In June 1993 the court heard arguments in the case. The court also awarded Wendy $10,000 to equal what Susan’s family had received initially from Zal. Susan had been ordered to submit reports for her time as trustee so that her actions could be reviewed. But in a blow to Wendy and Jane’s arguments, the court approved Susan’s handling of the trust.
The court also set up a new trust, taking Jane’s half of the assets from the original Alter family trust and transferring them to the Jane Alter living trust. The court named Wendy as trustee.
The case continues
Two years later, in June 1995, Zal died at age 85. What was left in the Alter family trust was distributed equally between Wendy and Susan.
During the two years leading up to her ex-husband’s death, Jane had also grown both physically and mentally weaker. The more she deteriorated, the more she relied on Wendy to drive her to attorneys’ offices, the bank and medical appointments. As trustee of the Jane Alter trust, Wendy controlled Jane’s assets and paid her bills.
As her health declined, Jane grew increasingly angry toward her older daughter, insisting that Susan had stolen money from the Alter family trust. Friends described Jane, who had been so likable, as growing angry and unpleasant. She refused to listen to reason, they said. On two occasions, the independent fiduciary explained to Jane that there had been no irregularities in Susan’s management of the trust, but Jane refused to believe her. Even Jane’s grandson, Susan’s child, could not convince his grandmother that his mother was not doing anything wrong. Jane said Susan was a “bitch” who wanted to take everything from her.
Five months after Zal died, Wendy drove her mother—now blind, hard of hearing, in a wheelchair and mentally impaired by strokes—to her attorney. Signing an amendment to the Jane Alter living trust, Jane provided each grandchild $10,000 upon her death and left the rest of her estate to Wendy.
Two years later, in October 1997, Jane died. She was 86 years old. Within weeks, Wendy filed to have Jane’s will declared valid. But on Feb. 22, 2000, Susan went to the Marin County Superior Court and began a lawsuit to cancel the Jane Alter living trust and the amendment. Susan claimed that Wendy had used “undue influence” to steer their mother into approving trust documents to disinherit Susan.
To prove undue influence and win her case, Susan had to show that Wendy had more than a strong, or even a controlling, influence on Jane. She had to prove that Wendy had overpowered Jane’s mind and sabotaged her free will at the time the documents were signed.
Wendy argued that her mother, although infirm, was perfectly competent at the time she signed the documents in question. She said that the law of undue influence was on her side and that she had every right to help her elderly, frail mother in any way she needed. Wendy claimed no evidence supported that she had unfairly influenced her mother when the documents were signed. Jane’s decisions should not be overturned.
Now you decide. How would you rule?
Robin Gerber is a lawyer and the author of Barbie and Ruth: The Story of the World’s Most Famous Doll and the Woman Who Created Her.
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