Pasquale v. Loving, — So.3d —- 2012 WL 933030 (Fla. 4th DCA March 21, 2012)

The popularity of revocable trusts and pour-over wills as "package deals" creates interesting strategic choices when challenging their validity; all of which revolve around legitimately exploiting the procedural and substantive differences between probate actions (think will contest) and tort actions (think trust contest). As I recently wrote here, although the public policy merits of this kind of forum shopping potential remain very much in dispute among academics, it’s a fact of life working probate litigators can’t ignore. This case is another example of that dynamic.

Case Study:

In this case the defendants tried to turn the probate vs. tort action forum-shopping tactic on its head with the following elegant argument:

  1. If the decedent executed a pour-over will and revocable trust (she did), and 
  2. if the decedent’s trust was incorporated by reference into her will if needed to give it effect (it was), and
  3. if the plaintiffs filed suit challenging only her trust, but not her will (the appeal turned on this question), and
  4. if the plaintiffs are now time barred by the probate rules from challenging the will (they are),
  5. then even if the plaintiffs challenging the revocable trust win their case, the now bullet proof pour-over-will will in all events "save" the trust and give it effect.
  6. Ergo: the trust contest should be dismissed.

The trial court judge accepted this argument and dismissed the trust contest with prejudice.

What’s most interesting about this case is that the 4th DCA does not reject the underlying logic of the argument resulting in dismissal. Instead, the 4th DCA read the operative complaint in the most expansive terms possible, allowing them to "see" a will contest hidden within its four corners, thus saving the plaintiffs from dismissal of their case on pleading grounds alone (something courts try to avoid whenever possible).

We note, first, that the Pasquales could not challenge the validity of the trust without also contesting the will. The trust was incorporated by reference into the 2005 will. See Lewis v. SunTrust Bank, Miami, N.A., 698 So.2d 1276, 1277 (Fla. 3d DCA 1997) (“A writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit identification.”) (quoting section 732.512(1), Florida Statutes (1995)). . . . 

. . .

While the complaint at issue is not a model of clarity, we find that it adequately constituted a will contest. “A petition for revocation of probate shall state the interest of the petitioner in the estate and the facts constituting the grounds on which revocation is demanded.” Fla. Prob. R. 5.270(a). “All technical forms of pleadings are abolished” and “[n]o defect of forms impairs substantial rights.” Fla. Prob. R. 5.020(a). Though the complaint does not specifically identify the 2005 will, count I challenges the validity of all testamentary documents executed after 2000[, thus by implication challenging the 2005 will] . . . Additionally, the complaint was filed in response to the notice of administration of the 2005 will, wherein the decedent completely revoked the Pasquales’ interest in the trust. Compare Feather v. Sanko’s Estate, 390 So.2d 746, 747 (Fla. 5th DCA 1980) (interpreting older version of probate code, finding that pleading filed by decedent’s disinherited child, entitled “Notice of Appearance,” was sufficient to contest will where pleading stated that she had interest in estate, and the will at issue disinherited her, making it clear that she opposed it). . . .

. . . In reversing and remanding this cause for further proceedings, we, of course, express no opinion as to the merits of appellants’ petition for revocation of probate.

 Lesson learned?

If you’re playing offense and your client hires you to challenging a revocable trust, always check the residuary clause of the underlying pour-over will as well. It will almost certainly contain a sentence incorporating the trust into the will if needed to give it effect. I don’t think I’ve ever read a Florida pour-over will that didn’t contain this boilerplate savings language in its residuary clause. Here’s the residuary clause from the pour-over-will at issue in this case, which contains the typical savings language.

I give all the residue of my estate, including my homestead, to the Trustee then serving under my revocable Trust Agreement dated October 26, 1999, as amended or hereafter amended (the “Existing Trust”), as Trustee without bond . . . The residue shall be added to and become a part of the Existing Trust, and shall be held under the provisions of said Agreement in effect at my death, or if this is not permitted by applicable law or the Existing Trust is not then in existence, under the provisions of said Agreement as existing today. If necessary to give effect to this gift, but not otherwise, said Agreement as existing today is incorporated herein by reference

As noted by the 4th DCA, these clauses are statutorily sanctioned by F.S. 732.512(1). Lesson learned? When in doubt, always challenge both the pour-over will and revocable trust.

If you’re playing defense and only the trust is challenged, you may want to take another shot at the argument employed by the defendants in this case. Although the argument eventually failed on appeal, it worked at the trial court level and its underlying logic seemed to be accepted on appeal by the 4th DCA. Food for thought.