Case Commentary: Geffen v. Goodman Estate
Understanding Undue Influence
Not every gift made to a family member is the product of undue influence.
Parents help children.
Siblings support one another.
People often make generous decisions in favour of those they trust.
The difficult question is determining when influence becomes so significant that the law should intervene.
The Supreme Court of Canada's decision in Geffen v. Goodman Estate remains one of the leading authorities on this issue.
The Facts
The case involved Mrs. Goodman, who had inherited property from her mother.
Several months later, she entered into a trust agreement dealing with that property. After her death, her executor challenged the validity of the trust, alleging that Mrs. Goodman's brothers had exercised undue influence over her in creating the arrangement. Mrs. Goodman had experienced mental health challenges at various times in her life, and the case raised important questions about dependency, influence, and vulnerability.
The Alberta Court of Appeal concluded that the trust should be set aside because it applied the presumption of undue influence.
The matter was then appealed to the Supreme Court of Canada.
The Supreme Court's Decision
The Supreme Court restored the validity of the trust.
Importantly, the Court emphasized that undue influence is not presumed simply because family members are involved in a transaction or because one person has the opportunity to influence another.
Instead, the Court explained that the key question is whether the relationship was one in which the alleged influencer had the ability to dominate the will of the other person.
Even where such a relationship exists, the surrounding facts must still be examined carefully.
In Mrs. Goodman's case, the evidence demonstrated that she had obtained independent legal advice and had made her decisions after careful consideration. The trial judge found that her brothers did not exercise the type of domination or coercion necessary to establish undue influence, and the Supreme Court agreed.
What Is the Presumption of Undue Influence?
One of the most important contributions of Geffen was its explanation of the presumption of undue influence.
The Court recognized that certain relationships naturally involve trust, confidence, or dependency.
Where the evidence establishes such a relationship - and the transaction appears to call for an explanation - the law may require the person benefiting from the transaction to demonstrate that it resulted from the independent and informed decision of the person making it.
That does not mean the transaction is automatically invalid.
It simply means the Court will require additional evidence showing that the decision was truly voluntary.
Why It Matters
Geffen reminds us that influence itself is not unlawful.
Parents influence children.
Children influence parents.
Friends, spouses, and siblings influence one another throughout life.
The law intervenes only when that influence crosses the line into domination, coercion, or an abuse of a relationship of trust.
The decision also highlights the importance of independent legal advice.
When a person receives advice from their own lawyer and is able to make decisions free from outside pressure, it becomes much easier to demonstrate that their wishes were genuinely their own.
Practical Lessons
Whether preparing a Will, making significant gifts, or establishing a trust, several practical steps can reduce the risk of future disputes:
meet privately with your lawyer;
ensure instructions come directly from you;
avoid allowing beneficiaries to direct the planning process;
consider independent legal advice where significant gifts are involved; and
document the reasons for important decisions.
These safeguards help protect both the individual making the decision and the validity of the resulting estate plan.
Final Thoughts
Geffen v. Goodman Estate reminds us that the law does not prohibit influence - it protects against undue influence.
The Court seeks to balance two important principles: respecting a person's freedom to make their own decisions while protecting vulnerable individuals from coercion or manipulation.
Thoughtful estate planning, combined with independent legal advice, remains one of the best ways to ensure that your wishes are respected and to reduce the likelihood of future litigation.
If you have questions about undue influence, trusts, or estate planning in Ontario, Tonelli Estate Law would be pleased to assist - BOOK A FREE CONSULT TODAY.
This article is for general informational purposes only and does not constitute legal advice.
