Undеr Maryland common law, there are two very different burdens and standards of proof that may be applicable when a gift is challenged on the ground that the donee exercised undue influence over the donor. As we shall explain, when the challenged gift is an inter vivos one—a present gift made during the donor’s lifetime—and the person attacking the gift establishes that a confidential relationship existed between the donor and the donee, there is a presumption against the validity of the gift, and the burden shifts to the donee to establish, by clear and convincing evidence, that there was no abuse of the confidence. When the gift is testamentary, however, taking effect upon the death of the donor, the existence of a confidential relationship between the donor and donee is simply one suspicious circumstance to be considered; it does not, of itself, give rise to a presumption of invalidity, and the burden remains with the person challenging the gift to prove a substantially overbearing undue influence.
The principal issue before us now is which of those two rules applies when the gift is made through the device of a revocable trust under which the donor presently transfers legal title to property to the donee, as trustee, and provides for the testamentary disposition of that property to the donee upon the death of the donor. In the circumstances of this case, we shall hold that the rule applicable to testamentary gifts applies.
*36 BACKGROUND
Genevieve Upman, widowed since 1967, died childless on March 1, 1996, at the age of 88. Under her Last Will and Testament, dated August 28, 1995, her entire estate, after paymеnt of taxes and expenses, was left to the Genevieve Upman Trust. The trust was initially created in June, 1994, but was amended by Ms. Upman in September, 1995. Under the 1995 amendment, the net trust estate was to be distributed, in equal shares, to Ms. Upman’s nephew, Kenneth Clarke, and his wife, Patricia, “in gratitude for the care and affection extended to me in my declining years.”
After the Will was admitted to probate, several other nephews and nieces of Ms. Upman, who had been named as beneficiaries under prior Wills, filed proceedings attacking the Will and the 1995 amendment to thе trust. In the Orphans’ Court for Carroll County, they filed a caveat to the Will, contending that Ms. Upman lacked testamentary capacity when she signed the Will and that the Will was procured by the exercise of undue influence by Kenneth and Patricia Clarke. In an action filed in the Circuit Court for Carroll County, they sought to invalidate the 1995 amendment to the trust, contending that Ms. Upman was not competent when she executed that amendment and that the Clarkes, as relatives and caretakers of Ms. Upman, took advantage of a confidential relationship bеtween her and them and improperly influenced her to make the gift to them through the 1995 amendment to the trust.
The issues raised in the caveat proceeding were transmitted to the Circuit Court and consolidated with the action challenging the amendment to the trust. Because the Will and the 1995 amendment to the trust were executed within a week of each other, the parties agreed that the evidence relating to both competence and undue influence would be the same with respect to both instruments. The caveat issues were resolved by a jury, which, in special verdicts, determined that Ms. Upman did not lack testamentary capacity when she executed *37 the August, 1995 Will and that the Will was not procured by the exercise of undue influence on the part of either Kenneth or Patricia Clarke. In the second action, which was decided by the court without a jury, the Clarkes admitted that they had a confidential relationship with Ms. Upman. Relying on cases dealing with undue influence attacks on inter vivos gifts, the court concluded that, once a confidential relationship is found, the burden falls on the trusted party—in this case the Clarkes—to show that their conduct was proper. The court found, however, that the Clarkes had met that burden and that there was no undue influence.
The plaintiffs abandoned their attack on the Will but appealed the judgment entered for the Clarkes with respect to the 1995 amendment to the trust. The Court of Special Appeals affirmed that judgment, but not entirely on the basis used by the Circuit Court.
Upman v. Clarke,
Until Mаrch, 1995, Ms. Upman lived alone in her home in Ellicott City—the marital home she had shared with her husband. At some point, she began to suffer from polymyosi-tis—a chronic arthritic problem—and from and after the mid-1980’s, she began to rely on her niece, Christine Healey, one of the plaintiffs, and Kenneth Clarke for some assistance in maintaining her home, with various errands, and with paying bills and keeping her checkbook. In 1989, at Ms. Upman’s request, Ms. Healey arranged for a lawyer to prepare a Will *38 for Ms. Upman. In that Will, signed in December, 1989, Ms. Upman left her stocks and bonds to 14 neрhews and nieces, in equal shares. She directed that any real estate—her house— be sold and that 50% of the proceeds be distributed to three nieces and a nephew of her late husband, and that the rest of her estate, including the other 50% from the sale of her home, be distributed to her five brothers and sisters, Mr. Clarke, and Ms. Healey. Ms. Healey was designated as personal representative.
In 1991, the Clarkes contacted another attorney—one who had done some work for them in the past—and had another Will drawn for Ms. Upman. In this second Will, signed in April, 1991, Ms. Upman left her stocks and bonds to an expanded group of 20 nieces and nephews. A specific bequest of $1,000 to her church was added. The disposition of the real estate and the balance of the estate remained unchanged. Ms. Healey and Mr. Clarke were named as co-personal representatives.
In May, 1994, Ms. Upman signed a third Will, which made no substantial changes from the second, and, a month later, she created a revocable trust—the Genevieve Upman Trust. Ms. Upman named herself as the sole trustee and direсted that she be paid from the trust, during her lifetime and as long as she remained mentally capable of managing her own affairs, so much of the income and principal of the trust as, from time to time, she requested. Ms. Upman reserved the right to revoke or amend the trust and to appoint a successor trustee. In the event of her death or inability to manage her own affairs, she designated Ms. Healey and Mr. Clarke, jointly, as successor trustees. She directed the trustees, during any period that she was unable to manage her affairs, to distribute so much of the income and principal, for her benefit, as they believed desirable for her care and support. Ms. Upman directed that, upon her death, her estate be distributed to those persons, and in the shares, specified in her latest Will.
There is some conflict in the evidence as to what property was placed in the trust. The Declaration of Trust referred to *39 an attached Schedule A, which provided for the transfer of Ms. Upman’s Ellicott City home and the furniture “and other personal property” in it. There is no reference either in that Schedule or in any later document to any transfer of Ms. Upman’s bank accounts, stocks, or other cash or securities. It appears, however, that stocks, bonds, and bank accounts were, indeed, transferred to the trust. The Information Report and accompanying Inventory filed with the Register of Wills after Ms. Upman’s death showed that approximately $213,000 in assets had been transferred to the trust in June, 1994, including $12,000 in U.S. Savings Bonds, $17,500 in stock, over $46,000 in bank accounts, Ms. Upman’s Ellicott City property valued at $135,000, and $2,300 in other tangible personal property. Counsel for рlaintiffs informed the court that about 95% of Ms. Upman’s property was in the trust and that only $8,000 to $9,000 passed through the probate estate. The transfer of those assets is also consistent with the direction that she receive, on request, income and principal from the trust estate during her lifetime; indeed, the failure to place those liquid, income-producing assets in the trust at that time would be in consistent with that provision.
In March, 1995, Ms. Upman suffered a fall in her home. It is not clear what prompted the fall. There was a suggestion in the hospital records that she may have had a seizure; Ms. Clаrke postulated that she may have become disoriented from taking too much of a sedative that had recently been prescribed for her. She was found by Ms. Healey on the floor in a confused state and was taken to the hospital, where she remained for eight days. This episode created a crisis for Ms. Upman. In addition to her chronic arthritis, she was diagnosed with a collection of other maladies, including vasculitis, osteoporosis, an inflamed ulcer on an ankle, and progressive dementia. She was reported as weak and confused. The hospital discharge summary stated that she “now needs close observation.”
It was clear that Ms. Upman could not return to her home, to live alone. Several options were considered by the family. *40 Ms. Healey thought that, given the extensive care she would need, Ms. Upman should be placed in a nursing home or similar kind of facility, a prospect that Ms. Upman adamantly opposed. Ultimately, the Clarkes agreed to have her live with them, and they prepared a separate room for her in their home. Ms. Upman remained in the Clarkes’ home for about 11 months, until she died. Ms. Clarke assisted her in most of her daily activities—dressing, eating, bathing, even going to the bathroom. The Clarkes assumed control of her checkbook and paid her bills.
In August, 1995, Ms. Clarke asked the lawyer who had prepared the second and third Wills and the revocable trust to prepare a new Will and an amendment to the trust. The attorney prepared the documents and sent them to Ms. Up-man, along with a letter stating that, if she wished, the attorney would come to the home to answer any questions she might have. Ms. Upman did not respond, othеr than to send the attorney a check for his services along with a “thank you” note. On August 28, 1995, Ms. Upman signed the Will in the presence of two neighbors of the Clarkes. Her signature to the trust amendment required notarization, so on September 3, 1995, Ms. Clarke took her to the local bánk where, before a notary, she signed the amendment.
As noted, the new Will and the trust amendment made a substantial change in Ms. Upman’s estate plan. The Will directs the payment of debts, taxes, funeral, last illness, and administration expenses and leaves the entire balance of the estatе to the Genevieve Upman Trust. The new provision added to the trust directs the payment of any debts, taxes, and administration expenses not paid by the probate estate and provides that all remaining property in the trust be distributed to the Clarkes. Ms. Upman’s siblings and other nieces and nephews were dropped as beneficiaries.
DISCUSSION
In the Circuit Court, the plaintiffs challenged the two 1995 instruments on competence as well as undue influence *41 grounds, and much of the evidence concerned Ms. Upman’s mental capacity. That evidence was in some conflict. The plaintiffs did not contest Ms. Upman’s competence or testamentary capacity with respect to any of the instruments signed prior to 1995. It was their position that she deteriorated significantly after signing the 1994 instruments and that she remained in a confused and helpless state, entirely dependent on the Clarkes. They stressed her age, her frail physical condition, the fact that her physician believed, in March, 1995, that she suffered from progressive dementia, and incidents in which she seemed confused as to dates, was forgetful, or аppeared to suffer from some delusions.
Testimony presented by the lawyer who prepared the 1991, 1994, and 1995 instruments, by the witnesses to the 1995 Will, and by the notary who attested her signature to the 1995 amendment to the trust, on the other hand, was to the effect that Ms. Upman was alert, knew what she was doing, and appeared to be acting voluntarily. There was abundant evidence from them, from the Clarkes, from an outreach person from the church who visited Ms. Upman from time to time, and from others sufficient to show that Ms. Upman (1) changed her mind about leaving her estate to between 14 and 20 people, with whom she had only infrequent contact, (2) was content living with the Clarkes, and (3) was deeply grateful to them for taking care of her and avoiding her placement in a nursing home.
As we indicated at the commencement of this Opinion, two different rules have developed under Maryland law with respect to challenges based on undue influence. The first question in need of resolution, whether the gift under attack is an
inter vivos
or a testamentary one, is whether a confidential relationship existed between donor and donee. We have spoken often about confidential relationships, but we have rarely attempted to define the concept. In
Green v. Michael,
In some relationships, such as attorney-client or trustee-beneficiary, a confidential relationship is, indeed, presumed as a matter of law. Otherwise, and particularly in family relationships, such as parent-child and husband-wife, the existence of a confidential relationship is an issue of fact and is not presumed as a matter of law.
See Sanders v. Sanders,
In the case of an
inter vivos
gift, the existence of a confidential relationship shifts the burden to the donee to show the fairness and reasonableness of the transaction. As we held in
Sanders, supra,
“In other words, once the relationship is proved, the plaintiff is relieved from the necessity of proving ‘the actual exercise of overweening influence, misrepresentation, importunity, or fraud,’ and the defendant has the burden of showing that a fair and reasonable use has been made of the confidence, ‘that the transfer of the property was the delib *43 erate and voluntary act of the grantor and that the transaction was fair, proper and reasonable under the circumstances.’ ”
(citations omitted).
We have described the donee’s burden as a “heavy” one,
Sanders, supra,
The rule governing attacks on Wills is very different. In
Koppal v. Soules,
“undue influence which will avoid a will must be unlawful on account of the manner and motivе of its exertion, and must be exerted to such a degree as to amount to force or coercion, so that free agency of the testator is destroyed. The proof must be satisfactory that the will was obtained by this coercion ... or by importunities which could not be resisted, so that the motive for the execution was tantamount to force or fear. Mere suspicion that a will has been procured by undue influence, or that a person had the ‘power unduly to overbear the will of the testator’ is not enough. It must appear that the power was actually exercised, and that its exercise produced the will.”
(citations omitted).
See also Knowles v. Binford,
*44
There is a rational basis for the two different rules. Persons ordinarily desire to retain possession and use of their property while they are alive. If someone who stands in a fiduciary or confidential relationship with another exerts
any
influence on that person to obtain an
inter vivos
transfer of the person’s property, for less than full value, that influence is regarded, at least presumptively, as undue and requires an explanation. The exertion of influence for personal gain is, itself, a breach of thе trust implicit in the confidential relationship, especially when it causes the person reposing trust to be deprived of his or her property. Thus, in
Vocci v. Ambrosetti,
A testamentary gift is different. Obviously, persons can no longer enjoy property after their death; they suffer no loss from a testamentary gift. Testamentary gifts are thus more natural and expected, and the persons most likely to receive them are those who often
do
stand in a fiduciary or confidential relationship with the donor—parents, children, spouses, siblings, close friends, trusted employees. In
Shearer v. Healy,
“there is an obvious difference between a gift whereby the donor strips himself of the enjoyment of his property while living and a gift by will, which takes effect only from the death of the testator. In cases of gifts by will the fact that a party is largеly benefited by a will prepared by himself is nothing more than a suspicious circumstance of more or less weight according to the facts of the case.”
*45 The instrument before us has features of both an inter vivos gift and a testamentary one. To the extent that Ms. Upman transferred legal title to her property to the Clarkes and authorized them, as trustees, to deal with that property, there was an inter vivos transfer'—an immediate parting of legal title. Although it appears that the property was placed in the trust in 1994, it was the 1995 amendment that made the Clarkes the trustees and thus it was that amendment that effeсted a transfer of legal title to the property from Ms. Upman, as trustee, to the Clarkes, as trustees. On the other hand, the actual gift to the Clarkes was predominantly testamentary, for two reasons. First, because Ms. Upman reserved the right to revoke the trust, she retained the power, with the stroke of a pen, to undo the transfer and recover full legal title to the property, at any time and for any reason. Second, although the Clarkes were entitled to exercise trust powers over the property, they had no right to beneficial еnjoyment of it until Ms. Upman’s death. They were limited, in their immediate control over the property, to their authority as trustees.
We dealt with this issue, albeit without much discussion, in
Knowles v. Binford, supra,
The attack involved only the revocable trust. There was no Will at issue. Nonetheless, we obviously regarded the trust as testamentary in nature. In determining whether the amendment was invalid because of undue influence, we not only applied the substantive standard applicable to caveats to Wills—those set forth in
Stockslager v. Hartle, supra,
The approach taken in
Knowles
is consistent with that used in other States. In
Mercado v. Trujillo,
In
Ullman v. Garcia,
In
Haynes v. First Nat’l State Bk.,
The plaintiffs cite a number of cases in which we treated gifts of interests in bank accounts as subject to the standards
*48
applicable to
inter vivos
gifts, notwithstanding that some of thоse accounts were in trust form, as indicative of a view that a gift in trust is nonetheless an
inter vivos
gift.
See, e.g., Owings v. Owings,
The trust here, even with the 1995 amendment, is clearly more akin to a testamentary instrument than to an inter vivos gift, and, for that reason, the Court of Special Appeals was correct in allocating the burden of proving undue influence to the plaintiffs. We need not decide here whether, had the Clarkes actually disposed of the assets of the trust or exercised substantial control over them to the detriment of Ms. Upman, the result would be different. Whether an instrument of this kind is to be regarded as testamentary or inter vivos may depend on how it is, in fact, implemented.
*49 We agree as well with the intermediаte appellate court’s conclusion that the Circuit Court’s incorrect allocation of the burden of proof to the Clarkes does not require any remediation. There can be no doubt that, having found sufficient evidence to rebut the presumption it created of undue influence, it would necessarily have found insufficient evidence to show undue influence had it applied the appropriate burden and standard of proof. That evidence was more than adequate to show no abuse of the confidential relationship.
JUDGMENT OF COURT OF SPECIAL APPEALS AFFIRMED, WITH COSTS.