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Necessity of Independent Advice

If there is no relationship of trust and confidence exist between the donor and the donee, a gift should not be set aside only because of lack of proof of competent and independent advice. On the other hand, where a confidential relationship exists, the validity of a gift made is determined by analyzing whether the donor had the benefit of independent advice before making the gift.  The lack of such independent advice is a situation to be considered to determine whether the gift should be avoided because of undue influence or fraud.

Independent advice provides assurance that the aged, infirm or dependent person conferring the benefit is made aware of what s/he is doing and with his/her own free will.  A donee who occupies a confidential or fiduciary relationship to a donor and who participates in the consummation of the gift has a duty to see that the donor gets independent advice, especially where the donee is a lawyer representing the donor.[i] An independent advice given to a donor need not be contemporaneous with the gift in order to overcome the presumption of invalidity because of the confidential relationship between the donor and donee.[ii]

In some jurisdictions, where a confidential relationship exists between a donor and donee, the donee is required to prove that the donor had the benefit of the competent and independent advice of a disinterested third party in order to sustain the gift. However, the rule that independent advice must be given in connection with transactions between persons who are in a confidential relationship is not applicable where the beneficiary or donee presents substantial evidence that a gift was made in good faith and was not the result of undue influence.

[i] In re Conduct of Howard, 304 Or. 193, 743 P.2d 719 (1987).

[ii] Nicholas v. Wright, 42 Tenn. App. 241, 301 S.W.2d 540 (1956).

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