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Topic: Fraudulent Conveyance

Is a Confidential or Fiduciary Relationship Automatically Found in the Context of a “Legal Relationship” or a “Family Relationship” in Tennessee?

Posted on Dec 8 2013 11:38PM by Attorney, Jason A. Lee

The Tennessee Court of Appeals decision of Tamala Teague v. Garnette Kidd, No. E2011-02363-COA-R3-CV, 2012 WL 5869637 (Tenn.Ct.App. 2012) discussed confidential relationships under Tennessee and what duties arise in such relationships.  This is important in the context of Tennessee estate law because often disputes arise about certain transactions around the time of death.  Claims of undue influence arise because of these transactions especially when one party has a power of attorney over an elderly individual. 


A confidential relationship is a relationship where confidence is placed by one in the other and the recipient of that confidence is the dominant personality, with the ability, because of that confidence, to influence and exercise dominion over the weaker or dominated party.  In general terms, it is any relationship that gives one person the ability to exercise dominion and control over another.  The burden of proof regarding a confidential relationship rests upon the party claiming the existence of such a relationship.  Confidential relationships can assume a variety of forms, and thus the courts have been hesitant to define precisely what a confidential relationship is.


Confidential relationships generally arise in two situations: (1) “legal relationships” and (2) “family and other relationships.”  In the “legal relationships” context, a confidential relationship arises when there is some legal connection between the dominant party and the weaker party, such as when a dominant party is granted a power of attorney.  Indeed, “a confidential relationship arises as a matter of law when an unrestricted power of attorney is granted to the dominant party.” Id. (emphasis added). In contrast, “[f]amily and other relationships” do not necessarily give rise to a confidential relationship per se; therefore, to establish a confidential relationship in this situation, contestants must prove the elements of “domination and control” in order to establish that the free will of the weaker party was destroyed and that the will of the dominant party was substituted. 


Teague at 8 (citations omitted). 


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TAGS: Fraudulent Conveyance, Durable Power of Attorney for Healthcare, Power of Attorney Comments [0]

Under Tennessee law can a fraudulent conveyance that is made to defeat the elective share option of the "surviving spouse" be voided?

Posted on Feb 26 2013 10:03AM by Attorney, Jason A. Lee

Under Tennessee law any conveyance by the decedent that is made in a fraudulent manner to children or any other individual in order to defeat the "surviving spouse’s distributive or elective share" is voidable at the option of the surviving spouse.  This situation can arise where an individual knows he or she is going to die soon, and therefore conveys property or other assets to another individual in order to try to remove it from the estate so it would not go to the surviving spouse.  Since the spouse has a right to certain benefits under Tennessee Law including an elective share, such a distribution that is done for a fraudulent purpose can be voided.


T.C.A. § 31-1-105 is the Tennessee statute that basically prevents an individual from successfully transferring assets prior to death in order to reduce the value of the estate that is subject to the elective share option under Tennessee law.  T.C.A. § 31-1-105 provides as follows:


Any conveyance made fraudulently to children or others, with an intent to defeat the surviving spouse of the surviving spouse's distributive or elective share, is, at the election of the surviving spouse, includable in the decedent's net estate under § 31-4-101(b), and voidable to the extent the other assets in the decedent's net estate are insufficient to fund and pay the elective share amount payable to the surviving spouse under § 31-4-101(c).


As a result, if gifts or conveyances are made to children or any other individual, those gifts or conveyances can be voided by the court if requested by the surviving spouse.  This will be done to protect the surviving spouse's entitlement to an elective share.  The elective share of a surviving spouse will be discussed in a subsequent post however, the main part of the statute, T.C.A. § 31-4-101(a) provides as follows:


(a)(1) The surviving spouse of an intestate decedent who elects against taking an intestate share, or a surviving spouse who elects against a decedent's will, has a right of election, unless limited by subsection (c), to take an elective-share amount equal to the value of the decedent's net estate as defined in subsection (b), determined by the length of time the surviving spouse and the decedent were married to each other, in accordance with the following schedule:


If the decedent and the surviving spouse were married:

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TAGS: Fraudulent Conveyance, Elective Share, Surviving Spouse Comments [0]

Jason A. Lee is a Member of Burrow Lee, PLLC. Contact Jason at 615-540-1004 or jlee@burrowlee.com for an initial consultation on wills estate planning and probate issues.

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Tennessee Wills and Estates Blog
Jason A. Lee, Member of Burrow Lee, PLLC
611 Commerce Street, Suite 2603
Nashville, TN 37203
Phone: 615-540-1004
E-mail: jlee@burrowlee.com