9.1 Confidential Relation and the Burden of Proof
In Maryland, the existence of a confidential relationship operates differently for inter vivos gifts than for testamentary gifts.
A confidential relationship is deemed to exist in certain relationships (attorney/client, trustee/beneficiary, principal/agent) but otherwise is a matter of fact to be established by the evidence:
Among the factors to be examined in determining whether this [confidential] relationship has come into being are the parent’s advanced age, his physical debility, his mental feebleness, and his dependence on his child. None of these factors is necessarily conclusive and each should be given that weight which is warranted by the circumstances then present. Masins v. Wilson, 213 Md. 259, 131 A.2d 219 (1959). Normally it is the minor child who relies heavily upon his parent for care and protection or for guidance in business affairs so that a confidential relationship exists between them with the duties running from the adult to the minor. It is only when, as a result of debility or feebleness, a parent becomes dependent on his child for aid and counsel, that a confidential relationship is re-established….
While Treffinger and Figgins dealt specifically with the existence of a confidential relationship between a parent and a child, the factors set forth in these two cases provide an instructive analytical framework in which to determine that a confidential relationship existed under the circumstances of this case “which does not involve a parent/child relationship.”
Once a confidential relationship has been determined to exist, it raises a presumption that any inter vivos gift is a product of undue influence. The burden then shifts to the recipient of the gift to rebut the presumption: “[T]he ‘heavy’ burden shifted to appellants to rebut the presumption of undue influence by establishing that ‘the transfer was the free and uninfluenced act of the grantor, upon full knowledge of the circumstances connected with it and of its contents.'”
The rule governing testamentary gifts, however, is different. The existence of the confidential relationship merely is one fact among many that may or may not raise the specter of undue influence. It does not shift the burden of proof. In Upman v. Clark, 359 Md. 32, 753 A.2d 4 (2000) the Court of Appeals determined that a revocable trust that resulted in a large gift at the death of the grantor should be treated under the testamentary rules not under the inter vivos trust rules for the purpose of applying the presumption.