Who is to Say You Can't Make a Gift? Undue Influence Over Lifetime Transfers

If a person has a Will and dies, and a beneficiary doesn't like the terms, one grounds for challenging the Will is that the testator (person making the Will) was subject to undue influence when he made it. An example would be a person with 4 children leaving 100% of his estate to one child, who the person relies on.  This doesn't mean that a person can't leave there assets to whomever they please, just that there are situations where people take advantage of a person's fragility to have assets funneled to them.

What happens when a person makes a gift during his lifetime and another party challenges that gift before the person dies?  The recently issued opinion in  Estate of Claudia L. Cohen v. Robert Cohen, Law Div. — Bergen Co. (Koblitz, P.J. Ch.) indicates that under New Jersey case law, the only people who have legal standing to bring a legal action to undue a lifetime gift are:

  • The Grantor (person who made the gift)
  • The Guardian of the Grantor, so long as the Grantor is still alive
  • The Executor of the Grantor (or Administrator of the estate if there was no Will), if the Grantor has died

So what if you have a situation where your mom is living with your sister, and she is transferring assets to your sister, and you think mom doesn't really understand what she is doing, or is scared to say 'no' to your sister?  The answer might be to seek a Guardianship over mom if she is no longer competent and the Guardian can then pursue the gifts made under undue influence.  

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