Florida Probate & Trust Litigation Blog : Florida Probate Litigation, Will Contest Lawyer & Attorney : Juan C. Antúnez : Serving Miami, Jacksonville, Tampa Saint Petersburg, Orlando, Fort Lauderdale

The Trust Law Committee met last week.  I apologize for not posting this sooner, but a very hectic trial schedule kept me away from the blog last week. Regardless, my principal reason for posting the committee meeting Agenda and Minutes is to disseminate the following reports/White Papers:

• Holding of legal title of entirities property in trust
• Republication of invalid trust by amendment
• Proposed Trust Code amendment: Directed Trusts
• Proposed Trust Code amendment: Statute of Limitations on Claims Against Trustees

Questions/comments regarding the meeting should be directed to the committee chair: Barry F. Spivey.

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Below is a copy of the email announcing the last Probate and Trust Litigation Committee meeting.  I apologize for not posting this sooner, but a very hectic trial schedule kept me away from the blog last week.  Regardless, my principal reason for posting these announcements is to disseminate the attached reports/White Papers.

The committee meeting Agenda and Minutes contain the following reports/White Papers:

• Fiduciary Lawyer-Client Privilege: Approved by EC [ITEM 3]
• Arbitration clause in a will or trust is enforceable. Passed in Legislature 2007-HB 311 [ITEM 3]
• Exculpatory clause in a will: Passed in Legislature 2007 –HB 311[ITEM 3]
• Payment of trustee’s fees from trust assets: Pending approval of EC [ITEM 4]
• Crafting an appellate rule on which Orders are Appealable in a Probate Proceeding? Sean Kelley, Tom Karr, Peter Sachs [ITEM 5] (Appellate Rule Project - White Paper.pdf)
• Collateral Attack on the Validity of A Marriage after Death Based Upon Undue Influence Bill Hennessey, Laura Sundberg, Russ Snyder [ITEM 6]
• Revisions to Rule 1.525 concerning 30 day time limit for filing a motion for attorneys’ fees [ITEM 7] Angela Adams, Eric Virgil, Laura Sundberg (R. 1.525 - Taxation of fees.pdf, Family Law 12.525.pdf)
• ACTEC Model Arbitration Legislation. [ITEM 8] Bob Goldman

Questions/comments regarding the meeting should be directed to the committee chair: Jack A. Falk

---

From: Falk, Jack A. [mailto:jfalk@dwl-law.com]
Sent: Monday, May 21, 2007 7:10 PM
To: Falk, Jack A.
Subject: Probate and Trust Litigation Committee meeting on Thursday, May 24, 2007 at 4:00 p.m. in Hollywood, Florida


Dear Committee Members,

The Probate and Trust Litigation Committee will be meeting from 4:00 to 6:00 p.m. on Thursday, May 24, 2007 at the Westin/Diplomat in Hollywood, Florida, in conjunction with the Real Property, Probate and Trust Law Section's Executive Council meeting. Attached please find the Agenda and Minutes with pdf attachments that are part of the Agenda materials for the meeting.

I look forward to seeing you at the meeting! Jack

<<Appellate Rule Project - White Paper.pdf>> <<R. 1.525 - Taxation of fees.pdf>> <<Family Law 12.525.pdf>> <<Agenda and minutes May 2007.pdf>>

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Diaz v. Ashworth, --- So.2d ----, 2007 WL 1484550 (Fla. 3d DCA May 23, 2007)

A prospective client comes to see you about challenging a will on undue influence and/or lack of testamentary capacity grounds.  The client wants to know "how much will it cost, how long will it take, what are my chances of winning?"  You ask yourself what may be the most important question of all "should I take this case?" 

Unless you understand the evidentiary issues you'll need to address in connection with each claim, you can't possibly expect to answer any of the questions posed above with any degree of certainty.  And misjudging those questions usually equals an unhappy client who doesn't want to pay his lawyer (yikes!)

Which is why the linked-to opinion is so important.  In this case the highly regarded Miami-Dade senior trial judge, Herbert Stettin, did such a good job of laying out the evidentiary issues underlying a will contest based upon undue influence and lack of testamentary capacity grounds, that the 3d DCA simply copied his order and adopted its reasoning as their own.

Evidence and Undue Influence Claims:

I found the discussion addressing evidentiary issues arising in an undue influence case especially helpful.  When reading the excerpt provided below, keep in mind the following three points.

• Key statute: §733.107(2)
• Burden of proof: preponderance of the evidence
• Building your case: note the importance given to medical testimony

For further background, an excellent starting place is Florida's New Statutory Presumption of Undue Influence, 77 Fla. B.J. 20, 21 (2003).

Judge Stettin:

Petitioner's second claim is that Mr. and Mrs. Ashworth unduly influenced Mr. Mesa to make the July 10, 2003 will. Father Diaz argues that the evidence shows the Ashworths never had a prior close relationship with Mr. Mesa, that their deep involvement in the making of the will, together with their attempts to insulate Mr. Mesa from contact with others after the will was made, all done at a time when Mr. Mesa was in the final stages of the AIDS illness, prove that the Ashworths obtained the will in question by unduly influencing Mr. Mesa's decision.

[Carpenter analysis]

The starting point to determine whether a will has been procured by the exercise of undue influence is the analysis required by In re: Estate of Carpenter, 253 So.2d 697 (Fla.1971). Under Carpenter, once it is established by the proponent that the will was properly executed, the contestant then must show, prima facie, the existence of a confidential relationship between the testator and the active procurement of the will by the proponent. Carpenter discusses those factual circumstances which may give rise to such a determination which, once made, results in a presumption that the will is the product of undue influence. Using the Carpenter test, I find that a presumption of undue influence was established by the evidence. Mr. Ashworth is the sole beneficiary under the July 10, 2003 will; he was present at its execution; Mrs. Ashworth was present on July 9, 2003, when Mrs. Mesa stated that he wished to make a will; Mr. Ashworth recommended that his attorney, Mr. Pilafian, draw the will; while disputed as to whether he learned of it on July 9 or July 10, 2003, Mr. Ashworth was aware of the contents of the will before it was signed; and Mrs. Ashworth was one of the subscribing witnesses. Add to this fact that Mr. Ashworth brought Mr. Mesa to Mr. Pilafian's office to sign the will and that he and his wife were active in caring for him after the will was signed, and it is clear the Ashworths occupied a confidential relationship with Mr. Mesa.

[Shifting burden of proof under Carpenter]

Carpenter provides that once evidence of such a presumption of undue influence has been made, it does not shift the burden of proof to the proponent of the will to prove the will was not the product of undue influence. Rather, it merely shifts to the proponent “the burden of coming forward with a reasonable explanation for [the beneficiary's] active role in the decedent's affairs, and specifically, in the preparation of the will ...”. 253 So.2d at 704. Carpenter holds that it then becomes the responsibility of the trial court to determine whether the proponent has, prima facie, satisfied this burden of reasonable explanation. Finally, once all these presumptions and burdens are met, the decision rests on the traditional evidentiary test of who has proven their case by a preponderance of the evidence.

[Impact of F.S. 733.107(2) on Carpenter analysis]

Subsequent to Carpenter, however, the legislature enacted an amendment to § 733.107, Fla. Stat ., to prohibit the shifting of the burden of proof in presumption of undue influences cases. See, e.g., Hack v. Janes, 878 So.2d 440, 443 (Fla. 5th DCA 2004). As it now stands, in those cases where the proponent of a will satisfies, prima facie, a presumption of undue influence in the making of the will, the proponent of the will has the burden of proving the will was not the product of undue influence. That burden must be met by a preponderance of the evidence as determined by the trier of fact.

[Application of law to facts]

Using these standards, I find that the Petitioner has proven by a preponderance of the evidence that the will was not the product of undue influence by Mr. and Mrs. Ashworth. Mr. Mesa was capable of making his own decision about who would receive his property when he signed the Ashworth will. The will he signed on July 10, 2003, and the two previous wills he made in the two years prior to 2003, each named non-relatives as beneficiaries. Each will was very basic. On July 10, 2003, Mr. Mesa knew what a will was and he was clear about his wishes as to who should inherit his property. On the same day as the Ashworth will, Mr. Mesa also made another significant decision to reject further medical treatment and to enter hospice care at his home rather than spend his last days in an institution. Dr. Steinhart's records and testimony are clear that Mr. Mesa was competent to make these decisions. I find the preponderance of the evidence in this case is that Mr. Mesa was competent and not unduly influenced in making the will dated July 10, 2003.

Evidence and Lack of Testamentary Capacity Claims:

I wrote about the last 3d DCA testamentary capacity case here.  Without mentioning that opinion (perhaps purposely?), Judge Stettin also did a great job of summarizing the state of the law in Florida with respect to what it takes to successfully prosecute a will challenge based on lack of testamentary capacity (again notice the importance given to medical testimony).  Here again the 3d DCA simply adopted his reasoning as its own.

Judge Stettin:

[Applicable legal standard]

In Raimi v. Furlong, 702 So.2d 1273, 1286 (Fla. 3d DCA 1998), our Third District concisely set out the applicable standards for a determination of testamentary incompetence, stating:

It has long been emphasized that the right to dispose of one's property by will is highly valuable and it is the policy of the law to hold a last will and testament good wherever possible. See In re Weihe's Estate, 268 So.2d 446, 451 (Fla. 4th DCA 1972), quashed on existing facts, 275 So.2d 244 (Fla.1973); In re Dunson's Estate, 141 So.2d at 604. To execute a valid will, the testator need only have testamentary capacity (i.e. be of “sound mind”) which has been described as having the ability to mentally understand in a general way (1) the nature and extent of the property to be disposed of, (2) the testator's relation to those who would naturally claim a substantial benefit from his will, and (3) a general understanding of the practical effect of the will as executed. See In re Wilmott's Estate, 66 So.2d 465, 467 (Fla.1953); In re Weihe's Estate, 268 So.2d at 448; In re Dunson's Estate, 141 So.2d at 604. A testator may still have testamentary capacity to execute a valid will even though he may frequently be intoxicated, use narcotics, have an enfeebled mind, failing memory, [or] vacillating judgment.” In re Weihe's Estate, 268 So.2d at 448. Moreover, an insane individual or one who exhibits “queer conduct” may execute a valid will as long as it is done during a lucid interval. See Id.; see also Coppock v. Carlson, 547 So.2d 946, 947 (Fla. 3d DCA 1989) (whether testator had the required testamentary capacity is determined solely by his mental state at the time he executed the instrument), rev. denied, 558 So.2d 17 (Fla.1990).

[Application of law to facts]

Applying these standards, I find that Mr. Mesa was competent to make the July 10, 2003, Ashworth will. He understood the nature and extent of his property, he knew those who would naturally claim a substantial benefit from his will, and it is clear that he was aware of the practical effect of the will he signed. He knew that he was going to die. He made an informed decision to accept hospice care instead of further treatment just prior to making the Ashworth will. Dr. Steinhart believed Mr. Mesa was competent to make such an obviously important decision.

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Bryan v. Dethlefs, --- So.2d ----, 2007 WL 1425499 (Fla. 3d DCA May 16, 2007)

In this case the beneficiary of his predeceased grandfather's trust died before the trust assets were fully distributed to him.  The subsequent litigation revolved around this question: in order to vest under the trust, does the following trust clause require the beneficiary to be living at the time of the settlor's death, or upon full distribution of his inheritance under the trust?

Distribution to Grandson: Upon my death, the then balance of principal and accumulated income remaining in the trust fund shall be distributed to my Grandson, ROBERT R. BIZZELL, if he is living at the time of distribution. (emphasis added).

Miami-Dade County Probate Judge Arthur L. Rothenberg ruled the vesting event was the settlor's date of death, and the 3d DCA affirmed.

Lesson learned: when in doubt, it's vested - NOT contingent

Rules of construction can be useful tools because they tip the scales in favor of a certain interpretation when the subject text is less than crystal clear.  That's what happened in this case.  The following excerpt from the linked-to opinion provides useful guidance with respect to the rules of construction applicable if there is any doubt that an inheritance vests immediately or is contingent upon some future event:

[T]he law favors the early vesting of estates. Lumbert v. Estate of Carter, 867 So.2d 1175, 1179 (Fla. 5th DCA 2004)(citing Sorrels v. McNally, 89 Fla. 457, 105 So. 106 (1925)). As this Court stated in Estate of Rice v. Greenberg, 406 So.2d 469 (Fla. 3d DCA 1981), any doubt as to whether an interest is vested or contingent should be resolved in favor of vesting:


This Court is committed to the doctrine that remainders vest on the death of the testator or at the earliest date possible unless there is a clear intent expressed to postpone the time of vesting. It is also settled that in case of doubt as to whether a remainder is vested or contingent, the doubt should be resolved in favor of its vesting if possible, but these general rules all give way to the cardinal one that a will must be construed so as to give effect to the intent of the testator.

406 So.2d at 473 (quoting Krissoff v. First Nat. Bank of Tampa, 32 So.2d 315 (Fla.1947)). Accordingly, no estate should be held to be contingent “unless very decided terms are used” and “unless there is a clear intent to postpone the vesting.” Sorrels, 89 Fla. at 467, 105 So. at 110. Indeed, “[t]he presumption that a legacy was intended to be vested applies with far greater force, where a testator is making provision for a child or grandchild, than where the gift is to a stranger or to a collateral relative.” Sorrels, 89 Fla. at 467, 105 So. at 110.

Finally, if a trust vests at the settlor's death, then “the death of the beneficiary before it becomes payable does not cause the legacy or devise to lapse.” Sorrels, 89 Fla. at 465, 105 So. at 110. Similarly, where a settlor intends a trust to vest upon the testator's death, benefits accrue to the beneficiaries from the time of the death, not the subsequent time that the trust was funded. In re Bowen's Will, 240 So.2d 318, 320 (Fla. 3d DCA 1970).

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As reported here by the New York Probate Litigation Blog, a New York jury found last month, in a mixed verdict, that Jonathan Blattmachr, one of the country’s leading trusts and estates lawyers, breached his fiduciary duty to a client in connection with a planning strategy called a “split-dollar insurance arrangement,” involving the purchase of life insurance to avoid estate taxes.

The following is an excerpt from Jury: Milbank’s Blattmachr Breached His Fiduciary Duty, as reported in the WSJ Law Blog:

Among the T&E bar, wrote New York Times tax reporter David Cay Johnston in his book “Perfectly Legal,” Blattmachr “enjoys the status of some Hollywood stars — his first name alone prompts recognition.” (We know Blattmachr’s a big macher, but can the name “Jonathan” alone really prompt recognition?)


But one of Blattmachr’s wealthy clients, Marvin Schein, was none too happy with Blattmachr’s services. Schein, whose father founded medical-supplies company Henry Schein Inc., sued Blattmachr and Milbank in 2003. Click here for the amended complaint, in which Schein alleged, among other things, that Blattmachr persuaded Schein to pursue a tax-avoidance strategy even though Blattmachr sensed IRS hostility toward it.

The strategy, called a “split-dollar insurance arrangement,” involved the purchase of life insurance to avoid estate taxes. In December 2000, Schein paid roughly $12 million in premiums for about $340 million in life-insurance policies. The IRS effectively halted the strategy in August 2002, a move Schein said rendered his policies useless.

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The Wills, Trusts & Estates Prof Blog reported here on an interesting West Virginia case revolving around whether a mentally ill man who killed his mother and plead not guilty by reason of insanity is excluded from her estate under Virginia's slayer statute.

The case is discussed in detail in Estate Claims "Insane" Killer Can't be Victim's Heir:

The estate of a woman who was killed by her mentally ill son may create new law in West Virginia by seeking to bar him from inheriting any of her assets even though he was not technically convicted of a crime.

Richard O'Neal pleaded not guilty by reason of insanity to the murder of his mother, whom he suffocated to death in her Charleston home in March 2005. A judge accepted the plea and ordered him committed to a state mental health facility for up to 40 years or until a further order of the court.

Under West Virginia's “slayer's statute,” “No person who has been convicted of feloniously killing another ... shall take or acquire any money or property, real or personal, or interest therein, from the one killed.”

As one of Bonnie O'Neal's three sons, Richard is entitled to a one-third share of her estate. But in a declaratory relief claim, her executor says that given his responsibility for her death, it would be "inequitable” and a violation of the “slayer's statute” for him to receive that share.

“While the slayer's statute applies ostensibly when there is an actual felony conviction in connection with the wrongful act, the public policy of West Virginia prohibits Richard G. O'Neal from profiting from his wrongful act,” the complaint, filed in Kanawha County Circuit Court, states.

Florida's Slayer Statute:

Florida’s slayer statutes are found at F.S. § 732.802 (probate estates) and F.S. § 737.625 (trust estates).  Unlike the West Virginia statute, the Florida statute is drafted broadly enough to give the trial judge the discretion necessary to disinherit a killer even if he or she isn't actually convicted of murder.  Here is the key language from F.S. § 732.802:

(1) A surviving person who unlawfully and intentionally kills or participates in procuring the death of the decedent is not entitled to any benefits under the will or under the Florida Probate Code, and the estate of the decedent passes as if the killer had predeceased the decedent.

.  .  .  .  .

(5) A final judgment of conviction of murder in any degree is conclusive for purposes of this section. In the absence of a conviction of murder in any degree, the court may determine by the greater weight of the evidence whether the killing was unlawful and intentional for purposes of this section.

 

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The following is from the Wills, Trusts & Estates Prof Blog:

By Texas Senior U.S. District Judge Jerry Buchmeyer, et cetera, 70 Tex. B.J. 193 (2007):

    D. Clinton Brasher of Beaumont, Texas, received these marvelous admissions “from defense counsel regarding an employee of theirs (up until the time of his death)” who was listed as a fact witness:

1. Admit that ______ is dead.

RESPONSE: Admit insofar as this question is regarding information regarding the death of ______’s body, as his spirit surely lives on.

2. Admit that ___________ will be unavailable to testify at trial.

RESPONSE: Admit subject to ___’s coming back to life and subsequently testifying in this matter, or, for that matter, testifying through a duly appointed oracle. … Inasmuch as this request for admission is meant to cover such things other than whether or not ____ will be available to testify live at trial, no pun intended, Plaintiff objects to the request as vague.

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Picking the right person to serve as personal representative or trustee can make all the difference in the world.  The wrong person can convert what should be an uncontested estate into a quagmire of never-ending litigation (see here).  The right person (or entity) can take a difficult situation and smoothly work through the issues with minimum fuss and expense to the benefit of all concerned.

Forbes on-line recently published Choose The Right Executor, which does a solid job of underscoring the importance of picking the right personal representative ("executor" if you live in the North East). Here's an excerpt from the linked to piece:

Most people tend to choose a family member or a close friend to act as an executor and to administrate their wills upon their death. But because of the intricacies that go with the job, people must realize that the most competent person (not the closest in relation) should be chosen. As mentioned before, this does not mean that the chosen individual must do everything themselves. Executors are allowed to hire others to help with various aspects of the process (such as an accountant to help with the taxation portion).

With that in mind, if you don't have a friend or a relative who you think can complete these duties in a satisfactory manner, don't worry--attorneys, accountants and other professionals can act as an executor for a fee, usually derived from the deceased person's estate. And while that fee may be in the hundreds or even thousands of dollars (depending on the size of the estate and difficulties involved) it may be worthwhile, especially if it means that your family will receive their inheritance intact and on a timely basis.

The bottom line is that most people assume that being an executor is an easy task that can accomplished by anyone, but because the probate process is so involved and may entail interaction with tax and legal professionals, only an intelligent, dependable person should be named as executor.

Source: Death & Taxes Blog

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Phillips v. Hirshon, --- So.2d ----, 2007 WL 1263475 (Fla. 3d DCA May 02, 2007)

Article X, section 4(c) of the Florida Constitution, which declares that “homestead shall not be subject to devise if the owner is survived by a spouse or minor child,” is one of the few "forced heirship" rules applicable under Florida law (the only other example of significance would be Florida's spousal elective share rules).  These rules provide an opportunity to challenge a will that is exponentially easier than traditional grounds for challenging a will in Florida (see here).

Children challenge dad's devise to girlfriend on homestead-law grounds

In this case dad devised a life estate in his Key Biscayne penthouse to his girlfriend.  One of his two surviving sons was a minor, so they challenged this devise by arguing that the property was homestead property.  Here's how the 3d DCA summarized their argument:

After their father's death, Joseph and David filed separate petitions to determine homestead. The thrust of their argument to the trial court was that the co-op was homestead property in the hands of their father at the time of his death and therefore not subject to devise by him under Article X, section 4(c) of the Florida Constitution, which declares that “homestead shall not be subject to devise if the owner is survived by a spouse or minor child.” The brothers contend that because David was a minor, the bequest under the will fails and the property passes outside of the estate, and therefore, the brothers now share the father's interest in the co-op on an equal basis as a matter of law.

Court says NO to homestead status for co-op

The trial court didn't buy this argument, and neither did the 3d DCA based on a conflicting Florida Supreme Court opinion.  However, the 3d DCA made clear that it felt the sons should have prevailed, and took the extra step of certifiying the issue to the Florida Supreme Court for reconsideration.  Here's ow the 3d DCA summarized its holding:

The Levine brothers urge that because their father occupied the co-operative apartment under a long-term proprietary lease received in conjunction with his purchase of his interest in the co-op, the property is protected homestead property under Florida law. Applying the principle of stare decisis, we affirm the decision of the trial court on authority of In re Estate of Wartels v. Wartels, 357 So.2d 708 (Fla.1978), which expressly holds “that a cooperative apartment may not be considered homestead property for the purpose of subjecting it to Florida Statutes regulating the descent of homestead property.” Id. at 711 (construing Article X, section 4(a)(1), Fla. Const.). At the same time, we certify to the Florida Supreme Court as a question of great public importance under Article V, section 3(b)(4) of the Florida Constitution, whether its decision in Wartels has continuing vitality in light of subsequent legislative action. We also find certifiable, direct conflict between our decision today and the decision of the Fourth District Court of Appeal in S. Walls, Inc. v. Stilwell Corp., 810 So.2d 566 (Fla. 5th DCA 2002), which construed the same section of Article X, section 4 of the Florida Constitution upon which the Wartels court relied to deny the benefit of homestead to an heir in the devise and descent context of Article X, section 4(c) to nevertheless afford the benefit of homestead protection from a forced sale under Article X, sections 4(a) and 4(b) of the same constitutional provision.

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Intellectual property rights may be the single most valuable asset owned by a decedent's estate, and in the case of celebrities, the dollar amounts can easily be in the millions (see here).  This recent news item is but the latest example of pseudo probate litigation addressing the issue (see here for others).  The following is an excerpt from Lensman's Estate Wins Battle Over Images of Marilyn Monroe:

A federal judge in Manhattan has sided with the family of late photographer Sam Shaw in a dispute over the rights to images of Marilyn Monroe.

Southern District of New York Judge Colleen McMahon rejected a claim that the estate of Shaw had violated Monroe's right of publicity by selling photos without the consent of Marilyn Monroe LLC, a company founded by the Hollywood icon's heirs.

The judge, writing in Shaw Family Archives Ltd. v. CMG Worldwide, Inc., 05-CV-3939, said the laws of New York, California and Indiana, which were at the heart of the dispute, did not grant a retroactive right of publicity to Monroe after her death.

"Ms. Monroe could not devise by will a property right she did not own at the time of her death in 1962," the judge wrote.

The ruling is the first of its kind involving the image of the legendary sex symbol. The attorneys who represent the Shaw estate, David M. Marcus and Christopher Serbagi, said "tens of millions" of dollars are at stake because of the ruling. They will pursue counterclaims against Monroe's heirs for interfering with licensing relationships.

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