How do we have my mother's transfer of property set aside if there was deception involved?
Full Question:
Answer:
A reverse mortgage is a loan from the U.S. Government for 50% to 75% of the value of a home owned by a homeowner aged 62 and older. Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to the homeowner. The funds from a reverse mortgage are tax-free. The loan doesn't have to be repaid in the homeowner's lifetime, however, when the homeowner dies, the money received plus approximately 4% interest is repaid by their estate. The loan is repaid when the homeowner ceases to occupy the home as a principal residence, due to the homeowner (the last remaining spouse, in cases of couples) passing away, selling the home, or permanently moving out.
Parties to an agreement must have contractual capacity before the agreement (including a deed) will be binding on both parties. Contractual capacity is the ability to understand that a contract is being made and to understand its general nature. The fact that a person does not fully understand the meaning and all ramifications of a contract does not mean that the person lacks contractual capacity. If any party to a contract (or grantor in a deed) does not have contractual capacity, the contract (or deed) can be declared void by a court.
An agreement may be set aside if it was not in fact entered into voluntarily by both of the parties. If either party entered into it because of undue influence or physical or economic duress, it may be set aside.
Undue influence arises in a situation where a confidential type relationship exists and one party has such influence over the other party that the other party's free will is dominated to the benefit of the influencing party. Confidential relationships which may result in undue influence can be such things as the relationship of an elderly parent and an adult child, a physician and patient, an attorney and client, or any other relationship of trust and confidence in which one party exercises a control or influence over another. Because of the possibility that a person in such a confidential relationship may dominate the will of another and take unfair advantage, if such a confidential relationship exists, the law presumes that undue influence has occurred if the dominating party obtains any benefit from a contract made with the person alleged to be dominated. The contract is then avoidable and may be set aside unless it can be proven that no such domination took place.
Example: Smith, upon reaching the age of 75 and being in ill health, decided to move in with his oldest adult son. He lived with his oldest adult son for several years prior to his death. Upon his death, it was discovered that he deeded all of his property to his oldest son. The younger son contested the deed, stating that his older brother exercised undue influence over their father in getting him to give all of his property to the oldest son. A presumption of undue influence would arise which would have to be overcome by the oldest son. One way to overcome this would be to show that the father consulted a disinterested third party, preferably an attorney, without the older son being present, and was counseled by the third party. This is not absolute proof of the lack of undue influence, but it is a very important element.
Persuasion and argument are not in themselves undue influence. An essential element of undue influence is that the person making the contract does not exercise his free will. Unless there is a confidential relationship, such as that between a parent and child, Courts are most likely to take the attitude that the person who claims to have been dominated was merely persuaded.
