On June 21st, 2018, the Michigan Supreme Court released their decision in Estate of Mardigan, ___ Mich ___; ___ NW2d ___ (2018)(Docket No. 152655) holding that an attorney is not barred per se from receiving an inheritance from a will and trust that he prepared, but the attorney must still overcome a presumption that he exercised undue influence over the testator to .
Attorney Mark Papazian prepared a will and trust for Robert D. Mardigan that named him as personal representative, awarded him all of the personal property, created $5 million trusts for each of Papazian's two children, and left him the residue of the estate after certain gifts were made to other beneficiaries. Mardigan died of lung cancer in 2012 at age 59. Mardigan's heirs objected to the admission of the will and trust to probate and argued that they were void on their face for violating public policy. The heirs argued that Michigan Rules of Professional Conduct (regulations that govern all Michigan lawyers) states at Section 1.8(c) that "[a] lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as a parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee." Attorney Papazian argued that these rules may subject a lawyer to disciplinary action, but they do not void the documents and there is no statute or law that says otherwise.
In 2013, days before the will contest trial, the probate court judge granted the heirs' motion for summary disposition and declared the documents to be void. At the motion hearing, Papazian admitted that he drafted both documents which prompted the court to declare that the circumstances violated public policy. Papazian appealed the summary disposition motion to the Michigan Court of Appeals. In a 2-1 decision in October 2016, the Court of Appeals reversed summary disposition and found that the documents are not automatically void but Papazian should be allowed an opportunity to prove the will and trust were not the result of undue influence.
The Court of Appeals heavily relied on In re Powers Estate, 375 Mich 150; 134 NW2d 148 (1965), a Michigan Supreme Court case with similar facts. In that case, an attorney drafted a will which left the bulk of an estate to the attorney's family member. Since the attorney and client had a fiduciary relationship at the time that the will was created, there is a presumption created at law that undue influence was exerted to create the gift. "To establish undue influence it must be shown that the grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against his inclination and free will." Kar v Hogan, 399 Mich 529, 251 NW2d 77 (1976). This does not mean that there is automatic undue influence and the will should be voided, but rather the proponent of the will (the attorney) must present enough evidence to overcome the presumption. Once enough evidence is presented by the proponent to beat the presumption, then the burden of proof shifts to the contestant (the heirs) to prove by clear and convincing evidence that there was undue influence and the document should be invalidated.
The Court of Appeals reasoned that Papazian, as a fiduciary, certainly had the opportunity to influence Mardigan to leave his estate to him. However, this doesn't mean that the law ASSUMES the documents are a creature of undue influence and should be voided. Rather, it means that Papazian is PRESUMED to have committed undue influence and must be afforded the opportunity to present some evidence that this is not the case. Papazian was denied this opportunity at the probate court so the motion for summary disposition should be reversed.
The heirs appealed to the Michigan Supreme Court and implored the justices to adopt a per se rule where wills leaving gifts to the drafting attorney should be voided because of the prohibitions in the Michigan Rules of Professional Conduct. The court was equally split on the issue. Justices Markman, Zahra and Clement voted to affirm the Court of Appeals because the law was clear with In re Powers and no provision in the Estates and Protected Individuals Code provided that the will and trust should be voided under the circumstances. Justices McCormack, Viviano and Bernstein voted to reverse the Court of Appeals and adopt the proposed per se rule because it was consistent with public policy. Justice Wilder recused himself from the matter because he was already part of the Court of Appeals panel. As a result of the 3-3 tie, the Court of Appeals opinion stands. Papazian is entitled to return to the probate court to enforce the will and trust and be given the opportunity to overcome the presumption of undue influence.
The justices voting to affirm the Court of Appeals declined to adopt a per se rule because of the value they wanted to place on a testator's wishes. Any competent person is free to create a last will and testament leaving any part of their estate to any person or organization, up to and including their attorney. While the attorney may have to engage in extra work to overcome the presumption of undue influence, it nevertheless provides an opportunity to carry out the testator's final wishes. The decedent's intentions are the often-overlooked focus of probate proceedings and should prevail at the end of the day.