Florida Probate & Trust Litigation Blog

Florida Probate & Trust Litigation Blog

By Juan C. Antúnez of Stokes McMillan Antúnez P.A.

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California court invalidates power of appointment; disinherited heir gets 1/3 of $55M trust

Posted in Will and Trust Contests, Will Construction Litigation

House

“In determining whether a power [of appointment] is exclusionary or nonexclusionary, the power is exclusionary unless the terms of the power expressly provide that an appointment must benefit each permissible appointee or one or more designated permissible appointees.” Restatement (Third) of Property (Wills & Don. Trans.) § 17.5 (2011).

Sefton v. Sefton, — Cal.Rptr.3d —-, 2015 WL 1870302 (Cal.App. 4 Dist. April 24, 2015)

Assume you have a case involving a $55 million trust created under “Grandfather’s” Will, that provides for a life-time trust for his son (“Father”), containing the following testamentary power of appointment (“POA”):

[T]hree quarters (3/4) [of the Trust estate] shall be distributed to [Father’s] then living issue as [Father] shall by his Last Will and Testament appoint, and in default of appointment, to his then living issue on the principle of representation.

In his Will, Father exercised this POA in a way that disinherited or “excluded” one of his three children. Is that legal? The answer to that question depends in large part on whether the POA is deemed to be exclusionary or nonexclusionary. If it’s exclusionary, Father was authorized to disinherit (i.e., “exclude”) his child, if it’s nonexeclusionary, he wasn’t. The POA’s ambiguous on this point because it doesn’t explicitly say one way or the other. So what’s the default presumption?  Under English common law, POAs were deemed to be nonexeclusionary unless expressly stated otherwise, which means every member of the class covered by the POA was presumed to be entitled to a “substantial” and not “illusory” share of the trust. (This presumption’s been abolished by statute in England).

As noted by the only Florida appellate court to address this issue directly, the old English rule was “unworkable” in practice “because it put the burden on the donee of the power to try to figure out how little could be directed to a nonfavored member of the class. If a court later determined that amount to be illusory, the entire power of appointment would fail.” Ferrell-French v. Ferrell, 691 So.2d 500, 501 (Fla. 4th DCA 1997). Not surprisingly, the Ferrell court adopted the opposite presumption: “We hold that a power of appointment is [exclusionary], unless the donor expressly manifests a contrary intent.” Id. at 502. By the way, this presumption was reflected (if not explicitly stated) in Cody v. Cody, a case I wrote about here. Florida’s approach also reflects the modern trend, as confirmed in the Restatement of Property:

A power of appointment whose permissible appointees are defined and limited is either exclusionary or nonexclusionary. An exclusionary power is one in which the donor has authorized the donee to appoint to any one or more of the permissible appointees, to the exclusion of the others. A nonexclusionary power is one in which the donor has specified that the donee cannot make an appointment that excludes any permissible appointee or one or more designated permissible appointees from a share of the appointive property. In determining whether a power is exclusionary or nonexclusionary, the power is exclusionary unless the terms of the power expressly provide that an appointment must benefit each permissible appointee or one or more designated permissible appointees.

Restatement (Third) of Property (Wills & Don. Trans.) § 17.5 (2011).

California Case Study: 

Grandfather’s trust was created under a Will he executed in 1955, which apparently remained unchanged through the date of his death in 1966. At that time California’s courts still followed the old English rule, which deemed POAs to be nonexclusionary unless the donor explicitly expressed a contrary intent. In 1970, California reversed this presumption by statute. Father died in 2006. Disinherited son filed suit in 2010, challenging his Father’s exercise of the POA excluding him from the trust. The case dragged on for four years. For disinherited son (and his lawyers), it must have been a gut-wrenching roller coaster ride of a case: disinherited son lost not once, but twice at the trial court level. In both instances he kept his case alive only after winning long-shot appeals, ultimately resulting in his share of the $55 million trust going from 0% to 1/3. (The California appellate court ruled that Father’s exercise of the POA was invalid under the pre-1970 controlling law, which meant the POA failed, which meant disinherited son was entitled to a 1/3 intestate share of the trust).

Is litigation financing the wave of the future for estate litigants?

Estate litigation is a highly-specialized, labor intensive endeavor. Which means it’s expensive, and there aren’t a lot of lawyers who do this kind of work full time. Result: heirs with decent prospects of inheriting significant sums often have to abandon legitimate claims simply because they can’t afford to prosecute them. Sometimes this problem is solved by the attorney taking the case on a contingency-fee basis. But that’s a risky proposition, which again means legitimate claims that should prevail on the merits are often abandoned for economic reasons. That didn’t happen in this case. Why? Because the claimant found a third-party lender willing to finance the cost of his legal representation.

Litigation financing has been around for a long time (especially overseas), but remains somewhat controversial in the U.S. If done right, these deals are both legal (as explained by the 4th DCA in Kraft v. Mason, 668 So.2d 679 (4th DCA 1996)) and ethical (as explained by the Florida Bar in Ethics Opinion 00-3, and the ABA in this white paper). Estate litigants facing off against well-funded opponents are especially vulnerable to financial pressure to abandon legitimate claims. For the right kind of case, litigation financing can level the playing field.

I predict we’ll see more of these deals as the industry matures and gains wider acceptance among lawyers and their clients. The law firm on the winning side of the California case was Van Dyke & Associates, and the lender was Law Finance Group (LFG). Here’s an excerpt from LFG’s press release on the case:

“From the outset, we understood the significant uphill battle we were facing. With the trial court having granted our wealthy opponent’s demurrer without leave to amend, our disinherited client’s case was entirely in the hands of the court of appeal. As a case of first impression, the outcome was anything but certain. LFG stepped in to assist us when we needed them most. Together, we debated the merits and analyzed the probability of success. After two separate appeals, we finally emerged with a total victory for our client. Many others believed in the case, but few had the wisdom to invest in it.  Only one had the resources to fund it to the finish line. Thanks again LFG.” – Richard S. Van Dyke, Esq., Managing Partner, Van Dyke & Associates, LLP

The Sefton II opinion can be reviewed at: http://www.courts.ca.gov/opinions/documents/D065898.PDF

For more information regarding Law Finance Group’s trust and estate litigation finance practice, please contact:  Wendy A. Walker at (212) 446-6767 or  wwalker@lawfinance.com.

Stay tuned for more!

2013-14 Probate Court Filing Statistics

Posted in Musings on the Practice of Law

In Miami-Dade – on average – each judge took on 3,069 NEW cases in FY 2013-14, in Broward the figure was even higher at 3,899/judge, with Palm Beach scoring the lowest at 1,950/judge.

If you make your living in and around our probate courts you’ll find the FY 2013-14 Probate Court Statistical Reference Guide interesting reading. The chart below provides the “cases filed” data for three of our largest circuits/counties: Miami-Dade (11th Cir), Broward (17th Cir), and Palm Beach (15th Cir). For prior years, see here (2012-13), here (2011-12).

But numbers alone don’t tell the whole story. To understand the breadth of issues a typical probate judge contends with in an average year at the end of this post I’ve provided a glossary with the official definition given for each of the categories listed in my chart. (For a “battlefield” perspective on how varied a typical probate judge’s docket can be you’ll want to read Probate judges handle so much more, by Georgia probate judge William J. Self). Finally, as a rough measure of the crushing case load your average big-city probate judge is saddled with in Florida, I took the total filing figures and divided them by the number of probate judges serving in each of those counties.

So what’s it all mean?

In Miami-Dade – on average – each probate judge took on 3,069 NEW cases in FY 2013-14, in Broward the figure was even higher at 3,899/judge, with Palm Beach scoring the lowest at 1,950/judge. Keep in mind these figures don’t take into account each judge’s EXISTING case load or other administrative duties. These stat’s may be appropriate for uncontested proceedings, which represent the vast majority of the matters handled by a typical probate judge, but when it comes to that small % of estates that are litigated, these same case-load numbers (confirmed by personal experience) make two points glaringly clear to me:

[1]  We aren’t doing our jobs as planners if we don’t anticipate — and plan accordingly for — the structural limitations inherent to an overworked and underfunded state court system. As I’ve previously written here, one important aspect of that kind of planning should be “privatizing” the dispute resolution process to the maximum extent possible by including mandatory arbitration clauses in all our wills and trusts. Arbitration may not be perfect, but at least you get some say in who’s going to decide your case and what his or her minimum qualifications need to be. And in the arbitration process (which is privately funded) you also have a fighting chance of getting your arbitrator to actually read your briefs and invest the time and mental focus needed to thoughtfully evaluate the complex tax, state law and family dynamics underlying these cases (a luxury that’s all but impossible in a state court system that forces our judges to juggle thousands of cases at a time with little or no support).

[2]  We aren’t doing our jobs as litigators if we don’t anticipate — and plan accordingly for — the “cold judge” factor I wrote about here; which needs to be weighed heavily every time you ask a court system designed to handle un-contested proceedings on a mass-production basis to adjudicate a complex trial or basically rule on any technically demanding issue or pre-trial motion of any significance that can’t be disposed of in the few minutes allotted to the average probate matter.

FY 2013-14 Probate Court Filing Statistics

Type of Case Miami-Dade (11th Cir) Broward (17th Cir) Palm Beach (15th Cir)
Probate 4,039  4,177  4,686
Baker Act  5,135  5,515  1,439
Substance Abuse 1,058  1,010  665
Other Social Cases 1,062  464  255
Guardianship 932  450  515
Trust 48  80  242
Total 12,274  11,696  7,802
# Judges 4 3 4
Total/Judge 3,069  3,899  1,950

Glossary: 

Probate: All matters relating to the validity of wills and their execution; distribution, management, sale, transfer and accounting of estate property; and ancillary administration pursuant to chapters 731, 732, 733, 734, and 735, Florida Statutes.

Guardianship (Adult or Minor): All matters relating to determination of status; contracts and conveyances of incompetents; maintenance custody of wards and their property interests; control and restoration of rights; appointment and removal of guardians pursuant to chapter 744, Florida Statues; appointment of guardian advocates for individuals with developmental disabilities pursuant to section 393.12, Florida Statutes; and actions to remove the disabilities of non-age minors pursuant to sections 743.08 and 743.09, Florida Statutes.

Trusts: All matters relating to the right of property, real or personal, held by one party for the benefit of another pursuant to chapter 736, Florida Statutes.

Florida Mental Health Act or Baker Act: All matters relating to the care and treatment of individuals with mental, emotional, and behavioral disorders pursuant to sections 394.463 and 394.467, Florida Statutes.

Substance Abuse Act: All matters related to the involuntary assessment/treatment of substance abuse pursuant to sections 397.6811 and 397.693, Florida Statutes.

Other Social Cases: All other matters involving involuntary commitment not included under the Baker and Substance Abuse Act categories. The following types of cases would be included, but not limited to:

  • Tuberculosis control cases pursuant to sections 392.55, 392.56, and 392.57, Florida Statutes;
  • Developmental disability cases under section 393.11, Florida Statutes;
  • Review of surrogate or proxy’s health care decisions pursuant to section 765.105, Florida Statutes, and rule 5.900, Florida Probate Rules;
  • Incapacity determination cases pursuant to sections 744.3201, 744.3215, and 744.331, Florida Statutes;
  • Adult Protective Services Act cases pursuant to section 415.104, Florida Statutes.

June 10, 2015: Come learn about STEP Miami’s new specialized forum for international trusts and estates litigators

Posted in Trust and Estates Litigation In the News

STEP-SIGI’m one of the volunteers working on bringing this exciting new opportunity to Miami. If you are at all interested in this topic, I encourage you to attend this free organizational meeting by clicking the “register now” button below.

REGISTER NOW!

STEP Miami, in conjunction with the STEP Contentious Trusts & Estates Special Interest Group, is hosting an organizational meeting on Wednesday June 10, 2015 from 6:00 PM to 8:00 PM at the Miami office of Kobre & Kim LLP located in Downtown Miami at:

2 South Biscayne Boulevard
35th Floor
Miami, FL 33131

Click here for all the details.

Discussions will be led by current STEP Miami members followed by drinks and networking. All practitioners in this field, be they a STEP Member or not, are welcome to attend.

About the STEP Contentious Trusts and Estates Special Interest Group

This specialist group serves practitioners who are working with, or have an interest in, trusts and estate practice from a contentious angle. It provides a forum for sharing international trust and estate jurisprudence and marshaling expertise and best practice in dealing with trust and estate disputes on an international level.

About STEP Miami

Founded in 2000, the STEP Miami Branch is one of the largest and most active in the Americas. Consistent with the objectives of STEP, the Miami branch provides practitioners with access to high level trusts and estates resources for all its members. The branch is run by a committee of 12 directors  and comprises an expanding membership of nearly 200 professionals from across Miami’s accountancy, legal, banking and fiduciary sectors.

THANK YOU TO OUR SPONSOR!

Kobre

 

Family “culture” eats estate-planning “structure” for breakfast — “and then spits out the bones”

Posted in Musings on the Practice of Law

peter_drucker

No matter how perfect your estate planning structure might be, family culture all too often eats all this great planning for breakfast – “and then spits out the bones.” I love that last line, which comes from a fascinating blog post by Matthew Wesley entitled Culture Does Indeed Eat Structure for Breakfast. Here’s an excerpt:

Trusts fail and litigation ensues. Family behavior undoes financial plans. Tax strategies sit on the shelf because of lack of political will. Family feuds destroy otherwise healthy businesses. And the structural work of family governance specialists is a hollow shell that does not begin to address the family dynamics that, as it were, stand back, smirk, and then eviscerate all of this good work. . . . Why? Because culture eats structure for breakfast.

So what’s the fix?

Wesley’s solution is to work on improving family culture (which he describes as closed or “tribal” in nature), rather than focusing exclusively on beautifully designed planning structures that often get ignored when inheritance feuds break out.

So if this is true – if culture does eat structure for breakfast – then what is the answer? How does one change culture in wealthy families? To find the answer it is useful to look at the nature of family cultures.

Families are often “closed” systems. Families, in this sense, are “tribal”. Being tribal, families often operate in rote ways. They repeat mythic stories, each tribe member has defined roles, and the tribe operates out of these roles often in well-worn, almost scripted ways. Families enact and then reenact their comedies and dramas as they move forward – often with each comedy or drama having a similar feel to those that came before much like formulaic TV writing where every episode follows the same templated arc of development. These tribal systems are inevitably disrupted by key “kinship” events: marriages, divorces, births, deaths, sickness, youth, maturation, old age. In resilient tribal cultures, these events are culturally assimilated and in brittle cultures these events can fracture the unity of the tribe. In either case, the tribe adapts or simply falls apart.

A “structuralist” response to tribal warfare: mandatory arbitration clauses:

So what can estate planners (the ultimate structuralists!) do to help family tribes “adapt” rather than “simply fall apart” when tested by disputed inter-generational wealth transfers?

Step one: accept reality. A certain percentage of estates will be disputed (maybe 70%), no matter how perfect your estate-planning advice might be or how many family counseling sessions may have taken place while the senior generation was alive.

Court battles turn small smoldering disputes into life-altering conflagrations. So step two needs to be: pre-emptively “opt out” of an overworked and underfunded public court system that asks our state court judges to juggle thousands of cases at a time. (In Miami-Dade – on average – each of our probate judges took on 2,848 new cases in FY 2012-13, and in Broward the figure was even higher at 3,105/judge). And how do we keep family disputes out of court? Think arbitration. As I’ve previously written, mandatory arbitration clauses should be incorporated into all wills and trusts — especially in Florida, which was the first state in the nation to specifically authorize them by statute (see here).

If Wesley’s right about family culture overwhelming even the best laid plans (and I believe he is), planning structures need to have flexibility built into them to allow for changing family dynamics over time. Which means planning for a better dispute resolution process is essential. And mandatory arbitration clauses are the single best tool we have to make that kind of pre-emptive planning actually mean something in the heat of post-death “tribal” warfare. In the absence of this kind of process planning, all it takes is one side to believe he or she will gain some kind of advantage by keeping the case in court. If that happens, no matter how sensible mediation or any other form of alternative dispute resolution might be for all concerned, the family’s going to get sucked into court. And when that happens — all bets are off.

2d DCA: Is Florida’s trust-reformation statute limited to only fixing “simple scrivener’s errors”?

Posted in Practice & Procedure, Will and Trust Contests, Will Construction Litigation

Megiel-Rollo v. Megiel, — So.3d —-, 2015 WL 1740365 (Fla. 2d DCA April 17, 2015)

bartleby-image

“I would prefer not to.” Bartleby, the Scrivener

When it comes to wills and trusts, drafting mistakes come in all shapes and sizes. If the document’s written in a sloppy way that’s open to more than one reasonable interpretation, it’s “ambiguous” and there’s a two-step process for litigating that kind of mistake (see here). Sometimes the mistake goes beyond sloppiness to actually omitting important text. For that kind of mistake we need to “reform” the document to insert the missing text, an equitable remedy that’s been around for a long time in Florida. In 2007 this rule was codified (and expanded upon) for trust agreements in F.S. 736.0415, which provides as follows:

Upon application of a settlor or any interested person, the court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intent if it is proved by clear and convincing evidence that both the accomplishment of the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement. In determining the settlor’s original intent, the court may consider evidence relevant to the settlor’s intent even though the evidence contradicts an apparent plain meaning of the trust instrument.

Our statue’s based on section 415 of the Uniform Trust Code, which includes the following commentary:

Reformation is different from resolving an ambiguity. Resolving an ambiguity involves the interpretation of language already in the instrument. Reformation, on the other hand, may involve the addition of language not originally in the instrument, or the deletion of language originally included by mistake, if necessary to conform the instrument to the settlor’s intent. Because reformation may involve the addition of language to the instrument, or the deletion of language that may appear clear on its face, reliance on extrinsic evidence is essential. To guard against the possibility of unreliable or contrived evidence in such circumstance, the higher standard of clear and convincing proof is required. See Restatement (Third) of Property: Donative Transfers § 12.1 cmt. e (Tentative Draft No. 1, approved 1995). . . . See also John H. Langbein & Lawrence W. Waggoner, Reformation of Wills on the Ground of Mistake: Change of Direction in American Law?, 130 U. Pa. L. Rev. 521 (1982).

[Reformation] applies whether the mistake is one of expression or one of inducement. A mistake of expression occurs when the terms of the trust misstate the settlor’s intention, fail to include a term that was intended to be included, or include a term that was not intended to be excluded [sic included]. A mistake in the inducement occurs when the terms of the trust accurately reflect what the settlor intended to be included or excluded but this intention was based on a mistake of fact or law. . . . Mistakes of expression are frequently caused by scriveners’ errors while mistakes of inducement often trace to errors of the settlor.

But what if the drafting mistake is huge, like omitting the list of trust beneficiaries who are supposed to inherit it all when the settlor dies. Does F.S. 736.0415 still apply, or is it limited to only fixing minor typo’s or “scrivener’s errors”? That’s the question at the heart of this case.

Case Study:

In the linked-to case above the attorney drafting the trust agreement never got around to preparing a list of trust beneficiaries that was supposed to be attached to the trust agreement. In other words, as drafted, the trust agreement was a blank slate as far as testamentary beneficiaries were concerned. Without testamentary beneficiaries, the trust’s only beneficiary would have been the settlor, who was also the trust’s only trustee. The “merger doctrine” terminates a trust if the legal and equitable interests in the same trust are held by the same person as both sole trustee and sole beneficiary (as discussed by the 2d DCA in this 2009 case). If the trust failed, its assets would be distributed according to the settlor’s earlier-dated will that split everything equally among her three children. According to the trust’s drafting attorney, the settlor intended to include only two of her three children as trust beneficiaries. So that’s the conflict driving this case: if the trust is effective, one child is cut out, if it fails, all three share equally.

Is Florida’s trust-reformation statute limited to only fixing “simple scrivener’s errors”? NO:

The child that was allegedly cut out of the trust argued F.S. 736.0415 couldn’t be used to reform her mother’s trust because the rule’s supposed to only apply to minor drafting errors (i.e., simple scrivener’s errors), not something as fundamental as who the trust’s beneficiaries are supposed to be.

Sharon argues that “the concept of a ‘mistake’ which would warrant reformation [of a trust] is intended to address simple scrivener’s errors that are contrary to the intent of the [settlor].” In other words, some errors in trusts are subject to correction by reformation, but others are not. According to Sharon, reformation is not available under section 736.0415 where, as in this case, the mistake amounts to a complete failure to designate any remainder beneficiaries that would result in a merger.

The trial court basically agreed with Sharon, denying the reformation claim pretrial by summary judgment. Not so fast, says the 2d DCA. First, limiting F.S. 736.0415 to “simple scrivener’s errors” is tantamount to re-writing the statute. Why? Because this limitation is nowhere to be found within the statute’s broadly-worded provisions. If you want to re-write a statue that’s a job for our legislature, not our courts. Strike one:

The broad scope of the language used in the statute is inconsistent with the notion that reformation is available to correct some mistakes in a trust, i.e., “simple scrivener’s error,” but not others. . . . For this court to read such a limitation into the statute would amount to judicial legislation of the sort in which we will not indulge.

Second, according to the 2d DCA F.S. 736.0415 is a “remedial statute,” which means it “should be liberally construed in favor of granting access to the remedy provided by the Legislature.” This is an important point: when in doubt, your judge should always opt in favor of giving you a chance to apply the statute. Strike two:

Our conclusion finds additional support in the status of section 736.0415 as a remedial statute. “A remedial statute is one which confers a remedy, and a remedy is the means employed in enforcing a right or in redressing an injury.” Grammer v. Roman, 174 So.2d 443, 446 (Fla. 2d DCA 1965). As a remedial statute, section 736.0415 “should be liberally construed in favor of granting access to the remedy provided by the Legislature.” The Golf Channel, Inc. v. Jenkins, 752 So.2d 561, 565–66 (Fla.2000). “Courts should not interpret remedial statutes strictly or narrowly to thwart the intent of the Legislature.” E.A.R. v. State, 4 So.3d 614, 629 (Fla.2009). The limiting construction that Sharon urges us to place on section 736.0415 is inconsistent with our duty to give this remedial statute a liberal rather than a narrow construction.

Finally, limiting the statute’s application to “simple scrivener’s errors” is impractical. There’s no way to articulate that rule in a way that would give anyone (least of all our judges) any objective guidance as to how they’re supposed to “enforce such a vague and amorphous standard in a fair and consistent manner.” One person’s “simple and routine matter” is another’s “complex and unusual” life-altering event. Strike three:

Finally, we note that the construction that Sharon urges us to place on section 736.0415 is impractical and would prove to be incapable of judicial enforcement. Sharon does not explain how the courts might distinguish “simple scrivener’s errors” that are subject to correction by reformation from the more complex and substantive errors that are not. Under such a rule, when litigation arises, simplicity would inevitably be in the eye of the beholder. The courts would be unable to enforce such a vague and amorphous standard in a fair and consistent manner. Moreover, seemingly routine matters regarding a trust’s administration may have a substantial impact on the interests of the beneficiaries and other interested parties. See, e.g., Morey v. Everbank, 93 So.3d 482, 484–89 (Fla. 1st DCA 2012) (addressing the issue of whether the provisions of a trust were such as to waive the exemption from creditors’ claims of two life insurance policies in the amount of $250,000 each). There is just no way to distinguish the simple and routine matter from the complex and unusual.

It ain’t over ’til it’s over:

Bottom line, the party seeking reformation in this case is entitled to her day in court — but it won’t be easy. The case is getting remanded back to the same trial-court judge that’s already ruled against reformation once. And when the petitioner gets back to that same judge, she’ll have to prove her case on the merits by clear and convincing evidence.

On remand, Denise must have an opportunity to prove her claim for reformation of the Trust. In accordance with section 736.0415, the standard of proof that she will be required to meet to establish her claim is clear and convincing evidence. See Reid v. Estate of Sonder, 63 So. 3d 7, 10 (Fla. 3d DCA 2011).

In other words, this case is far from over. In the Reid case cited above, the 3d DCA reversed a trial-court judge’s ruling against a trust reformation on technical legal grounds — just like this case (see here); but when the case got back to the same trial-court judge on remand, he simply ruled against reformation again, but this time on the merits, finding that the clear-and-convincing evidence standard hadn’t been met (see here). That’s what happens in bench trials: the same person is both lawgiver and fact finder.

Lesson learned?

If you or your attorney make a mistake, and there’s “clear and convincing evidence” that the mistake is contrary to your testamentary intent, there’s a remedy for that problem, and it’s found in F.S. 736.0415. And according to the 2d DCA, because the statute’s “remedial” in nature, courts should err on the side of granting access to it whenever possible — no matter how big the drafting error might be. But don’t think F.S. 736.0415 is a cure all. If a drafting attorney messes up, that mistake isn’t going to go away unless the rule’s extremely tough “clear and convincing evidence” standard is met, which can be daunting — as the drafting attorney in the Reid case learned (see here). And don’t expect F.S. 736.0415 to give your client’s heirs an after-the-fact “do over” just because events don’t pan out as expected when the settlor signed his trust years earlier (see here).

Florida Family Trust Companies: Tax and Nontax Considerations

Posted in Probate & Guardianship Statutes
trusts-offshore

WSJ: “This isn’t a game for the average trust-fund baby. Families typically should have at least $100 million to set one up, and most that do have at least $250 million.”

As reported here by the WSJ, the über wealthy are increasingly setting up their own privately-held family trust companies or “FTCs” to administer their trusts. Here’s an excerpt:

It isn’t enough to have a trust fund any more. The next step is to have your own trust company.

A small but increasing number of the super rich are setting up their own trust companies — boutique trust firms owned or controlled by wealthy families themselves. Some want more say over how their trust assets are handled; others want to consolidate a bunch of family trusts under one umbrella.

This isn’t a game for the average trust-fund baby. Families typically should have at least $100 million to set one up, and most that do have at least $250 million. Experts estimate there are only a couple hundred private trust companies in the U.S.

Still, their numbers have increased in the past decade as trust lawyers begin to tout their benefits. John P.C. Duncan, a Chicago lawyer who specializes in private trust companies, is setting up 16 this year, compared with only five four years ago. The South Dakota Trust Co., Sioux Falls, which provides back-office and other services for private trust companies, is helping to administer 12 private trust companies this year, up from five last year.

The WSJ piece was published in 2007. To maintain its edge in the hyper competitive trust-fund business, Florida needed to react to this new trend, and it finally has. With the passage of CS/SB 1238, effective October 1, 2015, we now have the “Florida Family Trust Company Act,” found in F.S. Chapter 662. The dollars at stake in this kind of planning are going to be significant, so if you’re thinking about setting one of these up you’ll want to get the lay of the land. First, read the legislative Staff Analysis summarizing the new act. Second, read Florida Family Trust Companies: Tax and Nontax Considerations, an excellent article in this month’s Florida Bar Journal explaining the nuts and bolts of the new act. Here’s an excerpt:

On June 13, 2014, Governor Scott signed the Florida Family Trust Company Act, creating F.S. Ch. 662. The act, which becomes effective October 1, 2015, governs the formation and operation of family trust companies (FTC) in Florida. At least 14 other states currently have legislation authorizing FTCs (private trust companies). The act, together with favorable trust law and the absence of a state income tax, should allow Florida financial, banking, accounting, and legal service providers to gain a share of the growing FTC business. However, unresolved federal income and transfer tax issues continue to loom over the use of FTCs, whether in Florida or elsewhere. This article provides an overview of the act and discusses key tax and nontax considerations related to FTCs.

Florida Legislature (3)

Lobbyists work in the rotunda between the house and senate chambers during session, Tuesday, April 28, 2015, at the Capitol in Tallahassee, Fla. The Florida House adjourns its annual session three days early because of budget impasse with the Senate over Medicaid expansion. Steve Cannon – AP

FTC Statute in Limbo?

Proving once again that when it comes to politics nothing’s ever certain, Michael Dribin, who chairs the Florida Bar’s RPPTL Section, contacted me after this blog post was first published to let me know that due to the legislative shenanigans ongoing in Tallahassee (see here), our brand new FTC statute is now in limbo. Here’s Mike’s explanatory email. If anyone wants more details, you should contact Mike directly.

Juan, I am not adept in logging in to blogs, so I am sending you this email, as to the Family Trust Company issue—this is as recent as yesterday (4.28).

The legislation which is on the books now was passed by the Legislature in the 2014 session.  This was the result of a 4-5 year effort on the part of the RPPTL Section and others.  A major aspect of the proposal included regulatory oversight by the Office of Financial Regulation (OFR).  At some point just before this was filed in 2014, there was a problem with the details with OFR.  As a consequence, the bill passed in 2014 without those essential regulatory provisions.  The effective date was postponed until October 1, 2015, in anticipation of the problem with OFR being remedied in time for the 2015 Legislature to pass the necessary language and amend the already existing law.

That was exactly what was happening until yesterday afternoon when the House adjourned three days early.  The proposal was expected to pass both the House and Senate this week.  However, with the House adjourning yesterday, the Senate withdrew it from consideration.

If you and I had communicated on this as recently as yesterday morning, I would have told you it looked like this would pass and have amended the existing statute without a problem.  As it stands now, there is no way to create a Family Trust Company in Florida, in spite of the statute you referred to.

If you wish to include my comments in your blog, please feel free to do so.  You may indicate that I am chair of the RPPTL Section.

Best regards,

Michael A. Dribin

Fellow, American College of Trust and Estate Counsel, Board Certified, Wills, Trusts and Estates Law

Direct telephone: 305.577.5415

Email: mdribin@harpermeyer.com

Telefax: 305.577.9921

Will a faith-based arbitration clause disqualify your trust for tax purposes?

Posted in Practice & Procedure, Tax Cases

Mikel v. Comm’r, T.C. Memo. 2015-64, 2015 WL 1518063 (U.S.Tax Ct. April 6, 2015)

london-beth-din

The Jewish faith-based arbitration system is perhaps the most well organized, with branches of standing battei din all over the country. Beth Din of America is the most prominent. Photograph: The London Beth-Din in session (circa 1937) (source: Flickr)

We aren’t doing our jobs as estate planners if we don’t anticipate — and plan accordingly for — the structural limitations inherent to an overworked and underfunded state court system that asks our judges to juggle thousands of cases at a time. (In Miami-Dade – on average – each of our probate judges took on 2,848 new cases in FY 2012-13, and in Broward the figure was even higher at 3,105/judge). As I’ve previously written here, one important aspect of that kind of planning should be “privatizing” inheritance disputes to the maximum extent possible by including mandatory arbitration clauses in all our wills and trusts. But can this kind of planning back fire from a tax-planning perspective? That question was front and center in a recently published Tax Court memorandum opinion.

Case Study:

In 2007 a husband and wife created an irrevocable “Crummey” trust to which they jointly gifted $3,262,000. They each filed separate gift tax returns, in which each claimed a gift-tax annual exclusion under IRC 2503(b) of $720,000 on the grounds that their gift included a $12,000 gift from each of them of a “present interest” to each of the trust’s 60 beneficiaries. In order for a donor to qualify for this exclusion, the donee must receive a “present interest in property,” that is, an unrestricted right to the immediate use, possession, or enjoyment of property. This kind of gift is accomplished in the trust context by granting each trust beneficiary a legally-enforceable withdrawal right. The IRS denied the exclusions assessing over $600,000 in back taxes and penalties against the couple. According to the IRS, the trust’s faith-based arbitration clause known as a “beth din” in Hebrew coupled with its no-contest or in terrorem” clause worked together in “practical terms” in a way that guaranteed the trust’s beneficiaries would never enforce their withdrawal rights, which meant they didn’t really have a legally enforceable “present interest” in the gifts they received.

The IRS lost this argument big time. If you’re a Florida estate planner what’s interesting about this case isn’t the outcome, it’s how the Tax Court arrived at its final ruling. You can’t use a no-contest clause in a Florida will or trust (they’re not enforceable by statute: F.S. 732.517736.1108) but we can use arbitration clauses (they are enforceable by statute: F.S. 731.401). So it’s the court’s discussion of this clause I found most interesting. Here’s how the trust’s arbitration clause was summarized:

If any dispute arises concerning the proper interpretation of the declaration, article XXVI provides that the dispute “shall be submitted to arbitration before a panel consisting of three persons of the Orthodox Jewish faith.” Such a panel in Hebrew is called a beth din. This panel is directed, in the event of any dispute, to “enforce the provisions of this Declaration * * * and give any party the rights he is entitled to under New York law.” Article XXVI states that the declaration as a whole shall be construed “to effectuate the intent of the parties * * * that they have performed all the necessary requirements for this Declaration to be valid under Jewish law.”

Will a faith-based arbitration clause disqualify your trust for tax purposes? NO!

According to the IRS, a trust beneficiary’s withdrawal right is “legally enforceable” only if the beneficiary can “go before a state court to enforce that right.” Not so, says the Tax Court:

[I]f we adopt [the IRS’s] premise that a withdrawal right must not only be “legally irresistible” under the trust instrument, but also be “legally enforceable” in an extrinsic sense, it is not obvious why the beneficiary must be able to “go before a state court to enforce that right.” Here, if the trustees were to breach their fiduciary duties by refusing a timely withdrawal demand, the beneficiary could seek justice from a beth din, which is directed to “enforce the provisions of this Declaration * * * and give any party the rights he is entitled to under New York law.” A beneficiary would suffer no adverse consequences from submitting his claim to a beth din, and respondent has not explained why this is not enforcement enough.

But even assuming the IRS’s formulation of the Crummey-trust rule is correct, says the Tax Court, an arbitration clause won’t disqualify your trust’s gift-tax exclusion because an arbitration award can always be challenged in court. That’s the law in New York (where this trust was created), and it’s the law in Florida — no matter what your arbitration clause might say (see F.S. 682.13). The IRS argued this right was illusory in this case because of the no-contest clause:

[The IRS] starts by hypothesizing that the trustees might refuse, without legal basis, to honor a timely withdrawal demand. In that event, article XXVI of the declaration would require the beneficiary to submit the dispute to a beth din. If the beth din, again without legal basis, sustained the trustees’ refusal to honor the demand, respondent agrees that the beneficiary could seek redress in a New York court despite the State’s general reluctance to disturb arbitral decisions. But a beneficiary would be extremely reluctant to go to court, respondent insists, because he would thereupon forfeit all his rights under the trust by virtue of article XXVI’s in terrorem clause. Practically speaking, therefore, respondent contends that the beneficiaries’ withdrawal rights are “illusory” and do not constitute a “present interest in property.”

For reasons not all that interesting to us here in Florida, the Tax Court also rejected the IRS’s reading of the no-contest clause. Bottom line, this was a taxpayer victory all around.

Are faith-based arbitration clauses valid? YES!

Faith-based arbitration clauses are especially well suited to inheritance disputes. And not only are they legally enforceable, they’re growing in popularity. Hundreds of Christian denominations and organizations offer this kind of dispute resolution service. Peacemaker Ministries, founded in 1982, is reportedly the largest. The Jewish arbitration system is perhaps the most well organized, with branches of standing battei din all over the country. Headquartered in New York and founded in 1960, the Beth Din of America is the most prominent. Although less organized and widespread than Jewish and Christian dispute resolution services, Islamic organizations also offer mediation and arbitration services (see Islamic Tribunal benefits: People get access to religion, US laws not violated). For those of you looking for a general introduction to this kind of arbitration a good starting point is a Fordham Law Review article entitled Faith-Based Arbitration: Friend or Foe? Here’s an excerpt:

In addition to the reasons disputing parties would turn to arbitration in general, there are many benefits specific to faith-based arbitration and other forms of dispute resolution. First, members of a religious community may feel obligated to turn to religious arbitration out of religious conviction. Followers of Judaism believe, for instance, that, according to halakhah, Jews are not allowed to bring their cases to secular courts. Other faiths are simply wary of litigating cases in a court environment. The Qur’an, for instance, urges mediation or arbitration rather than litigation. The Christian faith, too, discourages the use of secular courts, urging instead the private resolution of conflicts. A related, although very different, motivator may be social pressure. For example, in the Jewish faith, if a party tries to gain relief in a secular court, a beth din may issue a seruv, a document noting that a party has chosen to pursue his or her case in a secular court. The seruv can result in the party’s community socially ostracizing him or her. Additionally, sometimes those of a minority religious faith mistrust secular courts, fearing discrimination, and prefer to have their disputes settled internally. Another reason parties may choose religious arbitration is that it is generally more conciliatory in nature than ordinary arbitration. Similarly, many people feel that a faith-based arbitrator will judge the case more on equity and morals than following a precise legal issue.

A significant motivation for many people to turn to faith-based arbitration is that they feel more comfortable presenting their arguments before arbitrators who share their value system. Similarly, just as people prefer bringing commercial disputes to arbitration because the arbitrator will have specific knowledge of the area, parties utilize religious arbitration because the arbitrator is better equipped to deal with religious issues. Furthermore, for nonreligious disputes, because the forum is religious, less attention may be paid to the parties’ religion.

Finally, an important reason for turning to religious arbitration is that an internal system of governance helps preserve minority cultures and community values. Regarding family law issues, for instance, the intertwining of religious belief, legal principles, and family relations that is common among religions leads to a protectiveness regarding the religion’s laws and culture. Furthermore, those practicing a religious faith see the “importance of maintaining a sense of community [and] of viewing each other as an extended family.” Relying on an internal arbitration system can provide a “sense of togetherness and unity in the community.” Finally, utilizing such a system and applying religious principles in practice will clarify the religion’s values.

4th DCA: Is a spousal undue influence claim viable under Florida law?

Posted in Will and Trust Contests

Blinn v. Carlman, — So.3d —-, 2015 WL 1223665 (Fla. 4th DCA March 18, 2015) (trial-court order)

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4th DCA: “When a will is challenged on the grounds of undue influence, the influence must amount to over persuasion, duress, force, coercion, or artful or fraudulent contrivances to such an extent that there is a destruction of free agency and willpower of the testator. The doctrine of undue influence is based on the theory that the testator is induced by various means, to execute an instrument which, although his, in outward form, is in reality not his will, but the will of another person which is substituted for that of testator.”

Who bears the burden of proof is often a decisive factor in will contests. Why? Because your single most important witness — the testator — is dead (think: “worst evidence rule”), which means we have to litigate these cases based solely on circumstantial evidence. This problem is especially acute in undue influence cases, which is why F.S. 733.107(2) permanently shifts the burden of proof in these cases once the “presumption” of undue influence is triggered (see here). In 1971 the Florida Supreme Court told us in In re: Estate of Carpenter,253 So.2d 697 (Fla.1971), that a presumption of undue influence gets triggered if the contestant proves: (1) the existence of a confidential relationship between the testator and the will’s proponent; and (2) active procurement of the contested will by the will’s proponent.

What about spousal undue influence cases?

But what if you’re barred as a matter of law from ever triggering the presumption of undue influence in your case? For example, under Florida law a wife’s confidential relationship with her husband can’t be used against her to prove undue influence, which means you’re never going to trigger the presumption in one of these cases. There’s a common sense reason for this rule: in its absence every will benefiting a spouse could potentially be challenged on undue influence grounds. Here’s how the 3d DCA explained this rule in Tarsagian v. Watt, 402 So.2d 471 (Fla. 3d DCA 1981):

The holding of Goertner v. Gardiner, 125 Fla. 477, 170 So. 112, reh. den., 126 Fla. 412, 170 So. 844 (1936), that the confidential relationship which exists between a husband and wife is not one which may be considered in the law governing will contests, accord, In re Estate of Knight, 108 So.2d 629 (Fla. 1st DCA 1959), is, in our view, still extant. Since a confidential relationship is one necessary requirement which must be met before a presumption of undue influence arises, under Goertner the presumption cannot arise in the case of a husband and wife. Were the confidential relationship between spouses not exempted from that presumption of undue influence rule, the presumption would arise in nearly every case in which the spouse is a substantial beneficiary, since the required active procurement would almost always be present. One would naturally expect to find a spouse to be present at the execution of the will, present when the testator expresses a desire to make a will, knowledgeable about the contents of the will prior to its execution, involved in its safekeeping, and perhaps even involved in the recommendation of an attorney-preparer and consultation with an attorney-preparer. These, of course, are among the criteria for determining if one is engaged in active procurement.

So are spousal undue influence claims impossible under Florida law? No, you just can’t rely on F.S. 733.107(2) to win your case by shifting the burden of proof.

Case Study:

In this case a will favoring a man’s surviving spouse was challenged on undue influence grounds by his daughter from a prior marriage. In August 2007 Richard Blinn married his fourth wife shortly before turning 82. In 2008 Mr. Blinn signed a new will disinheriting his daughter and leaving everything to his new wife. He died in 2012.

The decedent suffered from “numerous and serious” physical infirmities that continued until his death, as well as suffering from “progressive dementia,” which worsened over time. This kind of evidence is important not because it proves lack of capacity, but because it’s powerful circumstantial evidence of the testator’s heightened vulnerability to being unduly influenced. Here’s how the 4th DCA made this point:

As the trial court found, the decedent was “susceptible to undue influence due to his declining physical state, anxiety disorders, depression, and progressive dementia.” See Hack v. Estate of Helling, 811 So.2d 822, 826 (Fla. 5th DCA 2002) (stating that a testator’s “failed mental capacity … is a factor which should be considered, as supporting the undue influence claim.”); In re Perez’ Estate, 206 So.2d 58, 59 (Fla. 3d DCA 1968) (“It is true … that the amount of undue influence need not be great where a testator is weak and his intellect clouded.”).

This kind of evidence is necessary, but not sufficient to take one of these cases on. You also need to see evidence of an abrupt — and unexplained — change in the testator’s estate plan, which is exactly what happened here:

The 2008 will completely transformed Richard’s prior estate plan. In a 2006 will executed eight months after he met appellant, Richard devised the entire estate outright to his daughter, Patty, with his granddaughter as the alternate beneficiary. This will was consistent with an earlier will which provided for Richard’s family. Prior to meeting appellant, Richard financially assisted his children. However, the 2008 will devised the entire estate to appellant, with an existing charity created by Richard as the alternate beneficiary. Four months after the execution of the 2008 will, the charity was dissolved and all of its assets were distributed to a New Hampshire beneficiary.

OK, so far the facts look bad for fourth wife, but not fatal. In my opinion what ultimately tipped the scales against new wife’s 2008 will is the kind of “smoking gun” you should always look for before taking one of these cases on. As stated by the court, new wife gave us all a “rare” glimpse “into an abusive marital relationship” when she inadvertently left a long, self-damning voice recording of herself falsely accusing the decedent’s daughter of “stealing” from him and telling him his daughter was no “GD” good. Here’s how the 4th DCA described this evidence:

A significant insight into the dynamics of the marital relationship occurred when appellant inadvertently left a message on a cell phone of a former employee of Sovereign Yachts. She had dialed the number and forgot to hang up before she started in on Richard. On the voicemail, appellant was screaming at Richard that,

Patty was still running the company, that she was—and that she was still running the company, she’s lying to him, “She’s no GD good, I told you so, I told you she’s no GD good, she’s just taking your money doing stuff behind your back, she’s not telling you about this.”

At the beginning of the message appellant said, “[s]ee, Richard, I told you the number is still working. I told you she is stealing from you. She’s running the company and not telling you about it.” Although appellant claimed that it was Richard’s belief that Patty was stealing from him, it is clear that it was appellant who aggressively pushed this idea, without any evidence of Patty’s wrongdoing. It is rare in a case like this to have such a glimpse into an abusive marital relationship.

And if that wasn’t bad enough, in 2011, while the decedent was hospitalized and diagnosed with “severe dementia”:

[A]ppellant contacted the drafting lawyer’s law firm to send her estate planning documents for Richard and a durable power of attorney in favor of appellant; she said she would have the documents signed, witnessed, and notarized. The law firm complied with appellant’s request. The trial judge found that if appellant were “so bold as to openly display such influence over [the decedent],” then the court could “reasonably infer that similar or greater influence was occurring in the dark during their marriage.”

Lesson learned?

The general rule is that courts will bend over backwards to enforce wills, no matter how suspicious the circumstances might be or how “unfair” the outcome might seem — especially in cases involving wills favoring a spouse. This case is the exception. And it’s an example of how bad the facts have to be to win a spousal undue influence case. You don’t see this kind of self-incriminating evidence very often. But when you do, your client does have a viable cause of action.

Interview with a Probate Lawyer: Richard L. Pearse, Jr.

Posted in Interview with a Probate Lawyer
pearse

Richard L. Pearse, Jr. of Pearse & Stinson, P.A. in Clearwater, Florida, was on the winning side of Kemp & Associates, Inc. v. Chisholm, a case involving a failed attempt to invalidate a Texas adoption in order to win a Florida estate case.

Richard L. Pearse, Jr. of Pearse & Stinson, P.A. in Clearwater, Florida, was on the winning side of Kemp & Associates, Inc. v. Chisholm, an interesting 5th DCA opinion I wrote about here involving a woman’s failed attempt to invalidate her own Texas adoption in order to win a Florida estate case.

I invited Richard to share some of the insights he drew from this case with the rest of us and he graciously accepted.

1.  What strategic decisions did you make in this case that were particularly outcome determinative at the trial-court level? On appeal?

The appellee in this case argued that she was the decedent’s sole heir because she was his biological daughter.  She sought to avoid the effect of her 1961 Texas adoption on the basis that the decedent had no notice of the adoption proceedings, successfully arguing to the trial court that the resulting adoption decree was not issued pursuant to due process and thus not entitled to recognition in the Florida probate administration.  Initially, we argued that the appellee had no standing to raise these issues because the right to assert the due process violations belonged to the decedent and could only have been asserted by him.  We also argued that she had presented no objective proof, such as DNA, that the decedent was her biological father and that, under Texas law, notice to the decedent was not required.  These arguments did not persuade the trial court, who ruled that the appellee had sufficient standing, had been acknowledged by the decedent as his daughter, and was therefore entitled to inherit the decedent’s estate.

On appeal, I decided to take a fresh look at the myriad of legal issues presented in this case.  In light of the trial court’s judgment, I came to the conclusion that our standing arguments were weak, and that we had to focus squarely on the due process arguments which persuaded the trial court to refuse recognition of the 1961 Texas adoption decree.  I also wanted to address the important policy issues concerning the finality of adoption judgments.  In presenting the appeal, I placed much more emphasis on the constitutional distinctions between legal fathers and unwed biological fathers.  I argued that the decedent had no right to notice based on biological status alone.  I pointed out that, under the particular circumstances of this case, the decedent was not entitled to notice either in 1961 or currently.  In response, the appellee argued that those U.S. Supreme Court cases beginning with Stanley v. Illinois which establish the right of unwed fathers to notice should be retroactively applied to her closed adoption case.  The Fifth District rejected the retroactivity argument and reversed, holding that the trial court should have given full faith and credit to the 1961 Texas adoption decree based on constitutional doctrine and sound public policy.

2. If you had to do it all over again, would you have done anything different in terms of framing the issues for your trial-court judge? On appeal?

At the trial court level, I would have placed a much heavier emphasis on the due process and public policy issues which ultimately prevailed on appeal.

Briefing the appeal was a very interesting process.  Because the appeal was from a summary judgment, I knew our arguments would be reviewed de novo.  In my initial brief, I felt I had to deal with every significant issue, which did not lend itself to the kind of focus and precision I would normally try to accomplish.  When, in her answer brief, the appellee argued that current due process principles should be retroactively applied to her closed adoption, the case distilled down to the essential issue:  may a Florida judge refuse to recognize a fifty year old Texas adoption decree by applying due process principles which were not in existence until more than a decade after the Texas adoption proceeding was closed?  The Fifth District answered the question:  no.

3.  There was an all-or-nothing quality to this case. The biological daughter won at the trial court level, entitling her to 100% of the estate and 0% for the decedent’s cousins. On appeal, the decedent’s cousins won, entitling them to 100% of the estate and 0% for the biological daughter. Did this fact inform how you managed the case in terms of the litigation or settlement negotiations? Is so, how?

Probate litigation often involves all or nothing outcomes.  Intestate succession is not determined by merit but by status.  The existence of an heir of closer relationship may exclude all potential heirs of more remote relationship.  A judge simply has no power to equitably divide an estate.  In some cases, an intestate decedent’s estate may wind up in the hands of distant cousins with whom the decedent had no particular relationship.  In this case, the cousins whose interests I represented were referred to by my opponents, pejoratively, as “laughing heirs.”

This is a case that might (and probably should) have settled at the trial court level.  It was mediated, unsuccessfully, as part of the appeal.  Unfortunately, by the time we got to mediation there was already a judgment in place.  I believe that the judgment gave the appellee a sense of invulnerability which resulted in inflexibility and, ultimately, an impasse.

4.  The 5th DCA quotes the following lines from a dissenting opinion authored by Justice Stevens: “The adoption decrees that have been entered without the consent of the natural father must number in the millions. An untold number of family and financial decisions have been made in reliance on the validity of those decrees…. [T]hose reliance interests unquestionably foreclose retroactive application of this ruling.” Did this practical implication of retroactivity play a significant role in your case at the trial-court level? On appeal?

I was particularly happy to have found that Justice Stevens’ opinion because it describes exactly the mischief which would be created by the retroactive application of later-developed due process principles to reopen closed adoption cases.  This argument was made to the trial court, although probably not with the emphasis it should have been.  On appeal, the practical implication of retroactivity was the essential issue.  Both sides agreed that Texas law in 1961 did not require notice of adoption proceedings to putative fathers.  To win, the appellee had to establish that later-developed constitutional principles could be applied retroactively to collaterally attack her 1961 Texas adoption judgment.  But, as the Fifth District explained, the implication of that would be to significantly damage or destroy the finality and permanence of adoptions, an intolerable outcome.

5.  Any final words of wisdom for estate planners and probate lawyers of the world based on what you learned in this case?

I never met the decedent in this case.  The evidence suggests that once the appellee found the decedent, he acknowledged her as his biological daughter.  They apparently had a cordial relationship while he was alive.  Whether the decedent intended his daughter to receive his estate cannot now be known because he died without a valid will.  So the first lesson from this case is: make a will.

Once in litigation, this case presented many layers of issues.  In that situation, focus is essential although it can sometimes be difficult.  In this case, we gained focus at each stage of the litigation and finally arrived at the essential issues during the appeal.  The earlier you can determine the essential issues in your case, the more likely you are ultimately to prevail.

From the Humor File

Posted in Musings on the Practice of Law

There’s nothing like a good cartoon to add some much-needed levity to our professional lives. I recently posted here some of the cartoons I’ve collected over the years. Lansing R. Palmer of Akerman LLP in West Palm Beach was kind enough to share his own collection of funny cartoons, which I’m posting below with his blessing. If anyone else has their own collection of practice-related cartoons and your willing to share, please pass them along.