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

Burgess v. Prince, --- So.3d ----, 2010 WL 199422 (Fla. 2d DCA Jan. 22, 2010)

Access to trust funds is usually a zero-sum game: If I pay trust funds to one party, there's less money for everyone else. We usually think of this problem in terms of conflicting claims between trust beneficiaries: if I pay $$ to beneficiary "A," there's less $$ for beneficiary "B."

So is there a way to boost payments to beneficiary A without diminishing beneficiary B's share of the trust? Yes!

One option is to "grow the pie," so there's more to go around for everyone [click here]. Another option is to pay beneficiary A to do some of the trust-administration work being done by third parties. As long as beneficiary A can do the job, this transaction is an economic wash as far as beneficiary B is concerned. So why not "keep the money in the family" by paying a trust beneficiary - rather than an unrelated third party - to do the work? Professionals who take the time to understand this opportunity can become heroes to their trust-beneficiary clients. The linked-to opinion is an example of this second option in action.

Trust beneficiary as Business Manager:

In the linked-to opinion the trust owned Salt Creek Art Works, a large art studio and gallery. One of the trust's beneficiaries was serving as trustee of the trust and business manager for Salt Creek Art Works. The trust agreement provided that a beneficiary may not receive compensation for serving as trustee, but there was nothing stopping her from getting paid for the work she did as business manager. In fact, the trust agreement specifically authorized a trustee/beneficiary to hire herself to do any work the trust required.

When the trustee/beneficiary was removed as trustee she was also stripped of her business-manager fees. On appeal the 2d DCA reversed this ruling by simply applying the clear text of the trust agreement.

Section 6.2 of the Trust provides that a beneficiary may not receive compensation for serving as Trustee:

Any Trustee, whether an individual or corporate trustee, who may serve under the Trust shall be entitled to receive compensation for its services as Trustee in accordance with its schedule of rates in effect at the time the services are rendered, including minimum fees and additional compensation for special investment and interests in a closely-held business. Any Trustee who is also a beneficiary under the Trust shall serve without compensation.

(Emphasis added.) Our record demonstrates, however, that Ms. Burgess did not receive compensation for her service as Trustee. Rather, she received a modest monthly payment from the Trust for operating the ongoing business of Salt Creek Art Works. The payments she received were not contrary to the terms of the Trust. Indeed, the Trust allows compensation to a Trustee serving in other capacities. Section 6.4 empowers the Trustee:

[T]o employ accountants, actuaries, appraisers, attorneys, brokers, building contractors, custodians, investment managers, realtors, and other agents including any Trustee, if such employment be deemed necessary or desirable and to pay reasonable compensation for their services without diminution of any fiduciary's commissions....

(Emphasis added.)

Finally, section 6.5 allows the Trustee to compensate a beneficiary for business management duties:

To determine in his or her discretion the manner and extent of his or her active participation in the business, and to delegate all or any part of his or her power to supervise and operate to such person or persons as he or she may select, including any associate, partner, officer or employee of the business.

To hire and discharge officers and employees, fix their compensation and define their duties; and to employ, compensate and discharge agents, attorneys, consultants, accountants and such other representatives as the Trustee may deem appropriate; including the right to employ any beneficiary or individual fiduciary in any capacity.

(Emphasis added.)

Relying on the plain language of the Trust document, we must conclude that the trial court erred in ruling that Ms. Burgess could not be compensated for managing Salt Creek Art Works.

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Chin v. Estate of Chin, --- So.3d ----, 2009 WL 2382326 (Fla. 3d DCA Aug 05, 2009)

Will construction litigation is supposed to be all about figuring out what the dry words on a piece of paper called a "will" are supposed to mean. We can't ask the testator what the words mean, he's dead. So "we" (i.e., lawyers sitting as judges or representing clients) do what we've been trained to do: we rely on a body of law that sets up a series of analytical tools and evidentiary presumptions aimed at hopefully delivering the most just result possible for all concerned. Florida's rich body of law governing all aspects of how testamentary documents are supposed to be construed is a frequent topic of discussion on this blog [click here, here, here, here, here].

But by focusing too much on the "law" can we end up missing the forest for the trees?

Will Construction Litigation as Morality Play:

The lesson to draw from the linked-to case is that we shouldn't lose sight of the fact that no matter what the law may say, at the end of the day we're all human, which means we're all swayed by an inherent sense of justice and fair play. The result that seems most "just" and "fair" always has a better chance of persuading the one-person jury that decides every Florida probate case: your probate judge; this is true no matter what the law may say is the correct doctrinal result. Here's how this point was made in an ABA Journal piece entitled When the Judge Is the Jury:

"The first lawyer to make the facts come alive in a bench trial has a tremendous advantage. .  .  . 

“You are talking directly to a fellow human being about the ‘gut stuff’ of life. What’s right and what’s wrong. Fair and unfair. Just and unjust. This is all about the power of a story to grab the heart of a fellow human—not something that is going to be measured for its adequacy by a professor who is checking to see if you found all the possible legal theories in the case. You already did that weeks ago with your pleadings.

“Remember, the power of persuasion lies in creating a sense of injustice. Judges—like juries—want to right wrongs. If you represent the plaintiff, show—don’t tell—your jury how the defendant hurt the plaintiff. And if you represent the defendant, your point is, it’s wrong for him to pay for what he didn’t do.

“Facts—not arguments, legal conclusions or academic pedantry—are what have the power to persuade."

With this (long!) introduction in mind, read how the 3d DCA summarized the key facts of the linked-to case and the rationale underlying its ruling.

On April 12, 1989, Adolph Chin drafted a Will in Jamaica. When he died in 1997, he co-owned property in Miami-Dade County as tenants in common with his sister, Mary Chin. Adolph and Mary both lived on this property. David Chin, Adolph's son, was named personal representative of Adolph's estate. . . .

Paragraph seven of the Will states:

I direct that property held by me in co-ownership with my brother the said Earl Anthony Chin and with my sister, Mary Victoria Chin, shall not be sold as long as my said brother or sister desires to occupy same.

David Chin argues that paragraph seven only applies to property which was co-owned by Adolph, Earl, and Mary concurrently. Mary argues that Adolph devised a life estate to each sibling with whom he co-owned property. If a court finds the language of a will ambiguous, “[t]he Testator's intent is the guiding and dominating factor in the construction of a Will.” See In re Roger's Estate, 180 So.2d 167, 170 (1965). When interpreting ambiguous provisions of a will, courts may look upon the situation of the parties, such as ties and affection between the testator and his or her legatees. Id.

On de novo review, we agree with the trial court's finding that paragraph seven grants a life estate to Mary Chin. Adolph shared a separate residence with each sibling. The trial court found this to be strong evidence that he did not have the intent to dispossess his siblings of their homes after his death. Additionally, to construe paragraph seven to apply only if there were co-ownership of property by all three individuals asks the Court to adopt the notion that Adolph Chin inserted a restriction into his Will with full knowledge that it had no meaning. This Court simply cannot adopt this explanation.

Thus, we agree with the lower court that Mary Chin has a life estate in the property and we affirm the lower court's Amended Order of Summary Administration.

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Littell v. Law Firm Of Trinkle, Moody, Swanson, Byrd and Colton, 2009 WL 2749666 (11th Cir.(Fla.) Sep 01, 2009)

The linked-to opinion is the culmination of litigation involving a "Joint Trust" created by a husband and wife in 1992 that has played itself out in two different courts for over 8 years.

Stage One: Probate Court Trust-Construction Action: Littell Loses

Stage one of the litigation was a trust-construction action before a probate judge in which the court ruled that the Joint Trust was NOT "amendable" after the first spouse died. This issue isn't as simple as it sounds, as demonstrated in another joint-trust revocation case I wrote about earlier this year [click here].

In the trust-construction action the drafting estate planning attorney (Byrd) testified that he had been instructed to draft the Joint Trust in a way that would allow it to be amended after the first spouse's death. In other words, based on the probate court's ruling, he apparently admitted to a drafting mistake. The second estate planning attorney involved in the matter (Stuart) testified that she thought the Joint Trust was amendable, and advised her client accordingly. In other words, again based on the probate court's ruling, she apparently admitted to having mistakenly interpreted the trust agreement. Both admissions are significant in light of the results of the second action.

Stage Two: Malpractice Action v. Estate Planning Attorneys: Littell Loses Again:

The linked-to opinion involves this second stage of the litigation. In this action Plaintiff Littell argued that if the Joint Trust agreement was NOT amendable, then he should be able to sue the estate planning attorneys for malpractice. The trial court judge ruled against him, dismissing his claims against both of the estate planning attorneys.

[1] Lack of Standing = No Claim v. Byrd:

The ruling that will probably be of most interest to Florida estate planners is this one. Here the court ruled that an heir that is NOT mentioned in the operative will or trust agreement (a "disinherited" heir), does NOT have standing as a third-party beneficiary to sue the estate planning attorney for malpractice.

Whether any heir ever has standing as a third-party beneficiary to sue an estate planning attorney for malpractice was unclear under Florida law, until the 4th DCA's 2007 ruling in the Gunster case [click here]. But what if the heir is NOT a named beneficiary of the operative will or trust agreement, does he still have standing to sue? Earlier this year I wrote about a California appellate opinion that ruled there was NO standing in those cases [click here]. The 11th Circuit ruled the same way in this case, concluding that under Florida law a plaintiff that is NOT a named beneficiary of the operative will or trust agreement, does NOT have standing as a third-party beneficiary to sue the estate planning attorney for malpractice.

Applying [Florida] law to the case at hand, we conclude that Littell does not have third-party beneficiary standing to bring a malpractice action against Byrd and Trinkle Moody. Florida's narrowly defined exception to the privity requirement limits an attorney's professional liability to foreseeable plaintiffs, namely, to clients and to those persons that the client apparently intended to be third party beneficiaries of the attorney's services. See Rosenstone, 560 So.2d at 1230 (limiting privity exception to “one who [the attorney] knows is the intended beneficiary of his services”) (emphasis added); Angel, Cohen & Rogovin, 512 So.2d at 193 (noting that attorney's professional liability is limited to clients and to those who can demonstrate that the apparent intent of the client in engaging the services of the lawyer was to benefit that third-party); see also Machata v. Seidman & Seidman, 644 So.2d 114 (Fla.Dist.Ct.App.1994), rev. denied, 654 So.2d 919 (Fla .1995) (liability of an accountant for negligence is expanded beyond persons in privity to include those persons the accountant knows intend to rely on the accountant's opinion for a specific purpose).  .  .  .  In this case, Littell points to no evidence indicating that he was an apparent intended beneficiary of the services Byrd provided to the Hermans or that the Hermans engaged Byrd intending to benefit Littell. At best, Littell was only an incidental third-party beneficiary of Byrd's services and the “Florida courts have refused to expand [the privity] exception to include incidental third-party beneficiaries.” Angel, Cohen & Rogovin, 512 So.2d at 194. [Because Littell was not named in the documents drafted by Byrd], Littell was not an apparent third-party beneficiary of Byrd's services. For this reason, the district court properly found that Littell has no standing to bring a malpractice action against Byrd and Trinkle Moody.

[2] Do Over Ruling = No Claim v. Stuart: "Heads I win, tails you lose"

This is the leg of the case that must have driven the plaintiff (and his attorney) crazy. With respect to the malpractice claim against the second estate planning attorney (Stuart), the court ruled there was no claim because this court interpreted the Joint Trust exactly opposite to the way the same instrument had been interpreted by the probate court. In the probate court the plaintiff had lost because the judge concluded the Joint Trust was NOT amendable after the first spouse's death. This time around the plaintiff lost - AGAIN - because the court concluded the Joint Trust WAS amendable after the first spouse's death, so the estate planning attorney (Stuart) did nothing wrong; ergo: malpractice action dismissed.

Littell also asserts that the district court erred in finding that the Trust was amendable by the sole surviving settlor and that therefore Stuart and Gray Robinson were not negligent in executing amendments to the Trust.FN2

FN2. Although the probate court reached the opposite conclusion, the district court properly found that because Stuart and Gray Robinson were not parties in the probate case, the probate court's decision has no preclusive effect in this case. See Albrecht v. State, 444 So.2d 8 (Fla.1984) (noting that issue preclusion applies only when the identical parties wish to relitigate issues that were actually litigated as necessary and material issues in a prior action).

Lesson learned? THINK "JOINDER OF PARTIES"

It's unfair to second guess anyone after 8 years of litigation. Viewed in retrospect, no one is perfect; and perfection isn't the standard we're supposed to be judged by. However, looking forward, what lessons can trusts and estates litigators draw from this case? I was especially struck by the "heads I lose, tails you win" nature of this case. It's OK for a judge to rule against you; smart, reasonable minds can disagree on how to interpret a trust agreement. It happens every day. But it's not OK if two different judges rule in exactly opposite ways on the same trust agreement: and you lose no matter what.

One way to avoid the risk of inconsistent results among different judges adjudicating the same trust agreement is to make sure all related claims are tried in one lawsuit before the same judge. That way, no matter how the judge rules, everyone has to live with that ruling for all purposes. How do you do that? Florida's joinder-of-parties rule. Under Fl. Civ. Pro. Rule 1.210(a), any person can be made a defendant who has or claims an interest adverse to the plaintiff and any person can, at any time, be made a party if that person's presence is necessary or proper to a complete determination of the cause. If the same judge had adjudicated both the trust-construction action and the malpractice action, each side would have won one and lost one, but no one would have been stuck with the "heads I lose, tails you win" outcome the plaintiff walked away with in this case.

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Doe v. Doe, --- So.3d ----, 2009 WL 2841190 (Fla. 2d DCA Sep 04, 2009)

As DNA testing becomes evermore widespread, Florida probate judges and practitioners alike can expect they'll have to grapple with its implications with greater frequency. For example, does DNA testing trump a prior paternity adjudication for purposes of intestate succession? In a 2007 opinion (Glover v. Miller) the 4th DCA said "NO" [click here]. (For an excellent discussion of DNA testing within the context of divorce proceedings see The Presumptions of Privette: Have They Perished with the Coming of Daniel and Disestablishment of Paternity.)

This time around - in a case of first impression - the question was whether DNA testing trumps traditional trust construction doctrine as applied to the phrase "descendants by blood". In the linked-to opinion the 2d DCA said "NO".

Believe it or not, for trust construction purposes someone can be your "blood relative," even if DNA testing proves conclusively that you're not biologically related to that person. Does this make sense? Yes, if your primary goal is to figure out the settlor's testamentary intent at the time he signed his trust agreement. When construing a trust agreement it's what was going on in the settlor's head at the time he signed the document that matters most, not the empirically-verifiable facts in existence years later at the time the trust is being administered.

Two points addressed in the linked-to opinion warrant special attention.

1.  Do you think we can get a court order compelling a DNA test?

If you're a probate lawyer and you haven't had someone ask you this question yet, just wait, sooner or later someone will. And when they do, consider the strong hint given by the 2d DCA on how it would have ruled if someone had given it a chance to block the DNA test compelled in this case:

FN3. Catherine did not seek review by certiorari of the circuit court order directing her to submit to further DNA testing [under Florida Rule of Civil Procedure 1.360(a)]. Moreover, Catherine has not challenged the propriety of that order on this appeal. In any event, the testing order is moot. The testing has already occurred, and the results have been disclosed to the parties and to the court. For these reasons, we express no opinion on the propriety of the circuit court's order for compulsory DNA testing. Cf. Contino v. Estate of Contino, 714 So.2d 1210, 1214 (Fla. 3d DCA 1998) (holding that the personal representative of an intestate estate was not entitled to an order for the DNA testing of a child born into wedlock to establish whether the decedent was the child's biological father).

2.  The "lessons of legal history" vs. DNA testing: Who wins?

In the linked-to opinion the trustees argued that if DNA testing proves that a person isn't biologically related to the settlor, then she's automatically disqualified from being considered one of the settlor's "descendants by blood." The 2d DCA does a great job of deconstructing that argument and coming to its apparently counter-intuitive conclusion in a way that should make sense to most trusts and estates lawyers.

The Trustees' argument overlooks the meaning of the term “descendants by blood” and similar expressions as they have been used historically in wills and trusts in connection with the limitation of class gifts to persons related to the testator, the settlor, or some other designated person. Before the advent of modern genetic testing in the last twenty to thirty years, a challenge such as the one the Trustees have brought against Catherine-challenging the paternity of a child born in wedlock-would have been all but unthinkable. The legitimacy of a child born in wedlock is one of the strongest rebuttable presumptions known to the law. See Eldridge v. Eldridge, 16 So.2d 163, 163-64 (Fla.1944). In addition to facing a very high level of proof, the challenger would have found it difficult-if not impossible-to assemble the evidence necessary to prove such a claim. See Chris W. Altenbernd, Quasi-Marital Children: The Common Law's Failure in Privette and Daniel Calls for Statutory Reform, 26 Fla. St. U.L.Rev. 219, 236 (1999). Only with the relatively recent development of genetic testing has the proof necessary to overcome the presumption of legitimacy become generally available. Id. at 237; Mary R. Anderlik, Disestablishment Suits: What Hath Science Wrought?, 4 J. Center for Fams., Child. & Cts. 3, 3-4 (2003).

Of course, the use of terms such as “descendants by blood” and similar expressions to limit class gifts began long before genetic testing became available. Such expressions are terms of art that have been traditionally used-sometimes successfully and sometimes unsuccessfully-to limit class gifts to persons related to the testator, settlor, or other designated person by a blood relationship and thus to exclude adopted persons. See, e.g., Papin v. Papin, 445 S.W.2d 350, 352-53 (Mo.1969) (holding that a class gift in a trust to “heirs at law by blood related to the grantor” excluded adopted persons); Fifth Third Bank v. Crosley, 669 N.E.2d 904, 909 (Ohio Ct.Com.Pl.1996) (holding that a trust provision limiting a class gift to the “lawful issue of the blood of the Trustor” excluded adoptees); Trust Agreement of Cyrus D. Jones Dated June 24, 1926, 607 A.2d 265, 270 (Pa.Super.Ct.1992) (holding that a trust agreement limiting a class gift to the “lawful issue of the blood” did not exclude adopted descendants). In the modern era, the trend has been away from a focus on blood relationships and toward treating the adoptee as a full member of his or her adoptive family. See Jan Ellen Rein, Relatives by Blood, Adoption, and Association: Who Should Get What and Why, 37 Vand. L.Rev. 711, 713-17 (1984). However, modern legal forms continue to recognize the traditional use of the “blood” restriction by defining “descendants” to include persons whose relationship to the designated ancestor is by blood or by adoption. See, e.g., 20A Am.Jur. Legal Forms 2d § 266:53, p. 370 (2009) (“Whenever used in this Will, the word “descendants” or the word “issue” shall mean legitimate descendants of whatever degree, including descendants both by blood and by adoption.”). Thus, by expanding the definition of “descendants” to include adoptees, adopted persons may be included within the terms of class gifts to descendants.

The Trustees' expansive reading of Article XVIII's restriction of the trusts' class gifts to “descendants by blood” as requiring genetic testing to determine membership in the class ignores the lessons of legal history. Because the blood restriction came to be used in wills and trusts to exclude adoptees from class gifts long before genetic testing became available, the meaning of these old expressions cannot reasonably be extended beyond the exclusion of adopted persons to disqualify descendants such as Catherine who were not adopted and who would otherwise qualify as a beneficiary of the class gifts but who happen to lack the requisite genetic profile from the settlors.FN5 Thus a proper interpretation of the limitation of the trusts' class gifts to “only children and descendants by blood” does not support the Trustees' argument.FN6

To put it in a nutshell, the trusts' Article XVIII appears in legal instruments, not in a technical paper on genetics. The phrase “descendants by blood” is a legal term of art, not a scientific one. As a legitimate child of one of the settlors' sons, Catherine qualifies as one of the settlors' “descendants by blood.”

*     *     *     *     *

Because Catherine is the legitimate child of her legal father, Chester III, she is, by operation of law, the “blood issue” of Chester III. It follows that she is a “descendant by blood” of the settlors and is within the class of persons entitled to take under the trusts. To paraphrase what another court said in a case involving similar facts, Catherine cannot be Chester III's daughter for only some purposes. See In re Trust Created by Agreement Dated Dec. 20, 1961, 765 A.2d 746, 759 (N.J.2001). Thus the circuit court erred as a matter of law in determining that Catherine was not a “descendant by blood” of Chester Jr. and Eleanor.

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Garcia v. Celestron, --- So.2d ----, 2009 WL 249211 (Fla. 3d DCA Feb 04, 2009)

In the linked-to opinion the 3d DCA provides a solid summary of the procedural steps and law governing adjudications of ambiguous wills in Florida. This is a bread-and-butter issue for most probate litigators, so it’s helpful to have an appellate opinion you can whip out for your judge or opposing counsel if anyone needs a quick refresher course on how these cases should be handled.

Step One: The court needs to rule on whether the disputed provisions of the will are ambiguous:

We affirm the trial court's ruling that the disputed provisions of the will are ambiguous . . . The will left the decedent's house to his widow, and should she predecease him, the property was to be divided among six named family beneficiaries. The will then provides as follows:

I further leave a life estate in said property to my daughter, Mercy Maqueira [Mercy Garcia], so that she may live in and enjoy this property.... Upon her death, the property shall be sold and the proceeds divided equally among those living at the time of my death so named herein.... If Mercy so desires, she may sell this property at anytime and divide the proceeds as above stated.

Step Two: If the will’s ambiguous, you’re entitled to present parole evidence at trial to determine it’s meaning:

The question presented to the trial court was whether the language “so that she may live in and enjoy this property” made the life estate determinable, requiring Mercy to either live in the property or sell it, or whether the term is one of clarification, allowing her to choose whether to live in it or not. The trial court concluded that these terms taken together are ambiguous and took evidence to determine the testator's intent. Based upon the evidence, the trial court concluded that the decedent intended that Mercy be provided with a place for her and her children to live, and that if Mercy did not live in the property, it should be sold and the proceeds equally distributed among the six listed beneficiaries. Evidence adduced at trial revealed that Mercy did not live in the house, but rented it out, and that she had no intent to live there. The trial court ordered the property to be sold because Mercy did not live in it and evidenced no intention to live in it in the future. Mercy Garcia appealed.

We agree with the trial court that the provisions of the will are ambiguous. As such, the trial court correctly received parol evidence in order to resolve the apparently contradictory provisions. See Perkins v. O'Donald, 82 So. 401 (Fla.1919) (holding that parol evidence may be received if the will is in some way ambiguous, in order to ascertain the testator's intent); Harbie v. Falk, 907 So.2d 566 (Fla. 3d DCA 2005); Campbell v. Campbell, 489 So.2d 774, 776-777 (Fla. 3d DCA 1986); Hulsh v. Hulsh, 431 So.2d 658 (Fla. 3d DCA 1983); In re Estate of Rice, 406 So.2d 469 (Fla. 3d DCA 1981). The trial court based its findings on competent, substantial evidence, and we thus affirm the final judgment.

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Babcock v. Estate of Babcock, --- So.2d ----, 2008 WL 4863088 (Fla. 4th DCA Nov 12, 2008)

Any probate lawyer worth his or her salt will tell you that reading a person's will is often just the tip of the iceberg. You don't really know how to administer an estate unless you take the decedent's will and run it through Florida's probate code to see what comes out the other end. The results can be surprising.

The linked-to opinion is a good example of how radically altered a will's legal effect can be once it's administered under our probate code. All of the following probate-code rules played a part in this case:

• If you get divorced and forget to revise your will, don't worry, your ex is automatically cut out of your will under F.S.732.507(2).
• If you get married and forget to revise your will to provide for your new spouse, don't worry, he or she is automatically written into your will as a "pretermitted spouse" under F.S. 732.301.
• If you die and leave your spouse nothing but your household effects and a bunch of bills, don't worry, he or she gets to keep this stuff as "exempt property" under F.S. 732.402. However, if you specifically bequest all of this stuff to someone else, then your surviving spouse is out of luck.

Here's an excerpt from the linked-to opinion that manages to weave all of these concepts into three short paragraphs:

Bradford Babcock died leaving a will which provided in Article IV the following bequest:

I devise to my wife, TARA L. BABCOCK, all of my clothing, jewelry, household goods, personal effects, automobiles and all other tangible personal property not otherwise specifically devised herein or pursuant to the written statement or list described in Article Third of this my Last Will and Testament. If my said wife shall not survive me, I devise all of the aforesaid property to my son, BRAXTON D. BABCOCK, if he shall be living at the time of my death.

At the time of his death, he was divorced from Tara and married to Tawn Babcock, from whom he was separated. Because of the divorce, those provisions affecting Tara became void. § 732.507(2), Fla. Stat. Thus, the will would be construed as a bequest to Braxton of the property contained in Article IV. Tawn was not mentioned in the will and constituted a pretermitted spouse. § 732.301, Fla. Stat.

Tawn filed a motion to determine exempt property pursuant to section 732.402(6), Florida Statutes, which provides that the surviving spouse has the right to a share of the “exempt property,” of the estate, which includes certain “[h]ousehold furniture,” “furnishings,” “appliances,” and “automobiles.” § 732.402(1), (2), Fla. Stat. However, “[p]roperty specifically or demonstratively devised by the decedent's will to any devisee shall not be included in exempt property.” § 732.402(5), Fla. Stat.

So what's a specific bequest?

As a first step all anyone had to do in this case was read the probate code, but once they ran up against the specific-bequest exception to the exempt-property statute, they got sucked into Florida's common law. Here's how the 4th DCA summarized the law on this point and how it should be applied to the specific facts of this case.

“A specific legacy is a gift by will of property which is particularly designated and which is to be satisfied only by the receipt of the particular property described.” In re Estate of Udell, 482 So.2d 458, 460 (Fla. 4th DCA 1986). See also Park Lake Presbyterian Church v. Henry's Estate, 106 So.2d 215, 217 (Fla. 2d DCA 1958) (“[A] specific legacy is a gift of a particular thing or of a specified part of the testator's estate so described as to be capable of distinguishment from all others of the same kind.”). On the other hand, “[a] general legacy or devise is one which does not direct the delivery of any particular property; is not limited to any particular asset; and may be satisfied out of the general assets belonging to the estate of testator and not otherwise disposed of in the will.” In re Estate of Udell, 482 So.2d at 460. See also Park Lake, 106 So.2d at 217.

Applying the above definitions to this case, the clothing, jewelry, and automobiles mentioned in the will are clearly specific bequests because they are particularly designated and can be satisfied only by receipt of the particular property. Stated differently, they are specific things or a specific part of the testator's estate. They are not general bequests because they cannot be satisfied out of the general assets of the testator's estate. The bequest in the instant case is similar to that in In re Estate of Gilbert, 585 So.2d 970, 972 (Fla. 2d DCA 1991), where the Second District found that a bequest of “all of her jewelry, clothing, and feminine personalty ... was a specific bequest of identifiable property.”

 

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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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Morgan v. Cornell, --- So.2d ----, 2006 WL 2987107, 31 Fla. L. Weekly D2632 (Fla. 2d DCA Oct 20, 2006)

Estate planning and probate litigation are two sides of the same coin.  The planner needs to understand the underlying substantive property rights being conveyed and how to draft documents that accurately describe what those property rights are and to whom they are being conveyed.  In the event of a dispute, the litigator needs to understand the same: what are the underlying substantive property rights being disputed and does the operative document effectuate a legally enforceable conveyance.

That's why this case is equally instructive to the planner and the litigator.  The litigation revolved around whether the decedent had validly devised a life estate in two properties he owned as tenants-in-common with his girlfriend.  The properties at issue were a home in Naples, Florida and a second home in New Hampshire (i.e., the amount in controversy likely exceeded seven figures).  The decedent's children argued -- and won at the probate-court level - that the devise was invalid and thus girlfriend got nothing.  Girlfriend argued the opposite . . .  and won where it really counted, before the 2d DCA, which reversed the probate court's order.

Here's how the 2d DCA articulated the issue on appeal:

The specific devises at issue state:

If I own the home [in New Hampshire/Florida] at my death, I leave said home and real estate together with the contents therein to Julia H. Morgan for the term of her life, subject to the obligation to pay all real estate taxes, upkeep, insurance and ordinary costs of ownership, with a remainder interest in fee simple as Tenants in Common to her children ···, per stirpes.

**********

The personal representative of Mr. Cornell's estate, his daughter Elizabeth L. Cornell, filed a petition seeking construction of these conditional devises, alleging that the condition-“If I own the home”-is unclear in extent, nature, and meaning. On one hand, the word “own” could be read to mean “to the extent I own the home,” so that the specific devises would be effective for whatever interest the testator possessed at his death. On the other hand, the word “own” could be interpreted more strictly, so that the condition would be fulfilled only if the testator were the sole owner of each home at the time of his death. If the second interpretation were operative, the condition would fail and the testator's interest in the homes would become part of the residuary estate and pass to his three children.

The 2d DCA rejected the children's interpretation -- and the probate court's order -- by holding that the word "ownership" was a broad enough term to encompass a tenants-in-common interest.  This is the part of the 2d DCA's opinion that is most instructive to future planners/drafters and litigators because it articulates in clear, unambiguous language what a "tenants-in-common" interest is and how it can be devised:

The parties in this case agree that Mr. Cornell and Ms. Morgan owned the real properties as tenants in common. When two persons own property as tenants in common,

A and B each owns in his own name, and of his own right, one-half of Blackacre···· It means that each owns separately one-half of the total ownership···· Each is entitled to share with the other the possession of the whole parcel of land. Each may transfer his undivided one-half interest as he wishes so long as the transfer does not impair the possessory rights of the other tenant in common. Each may transfer his undivided one-half interest by will···· The central characteristic of a tenancy in common is simply that each tenant is deemed to own by himself, with most of the attributes of independent ownership, a physically undivided part of the entire parcel.

Thomas F. Bergin & Paul G. Haskell, Preface to Estates in Land & Future Interests 58-59 (1966). The estate of a tenant in common is both inheritable and devisable. Tyler v. Johnson, 61 Fla. 730, 55 So. 870 (1911).

As a tenant in common, Mr. Cornell owned a physically undivided part of each entire parcel in New Hampshire and in Naples. Without question, Mr. Cornell did “own” the property at the time of his death; the ownership condition was fulfilled; and each devise validly passed a life estate in his undivided half interest to Ms. Morgan-just as he intended.

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Karasek v. William J. Lamping Trust, 2005 WL 2086183 (Fla. 4th DCA August 31, 2005) (Trial Court Reversed)

Precise drafting is the single most effective barrier against costly probate litigation. What makes estate planning documents especially challenging for attorneys is that the careful drafter needs to consider the very real possibility that the Will or Trust he or she drafts today could become a disputed matter decades in the future (or even hundreds of years in the future under Florida's new rule against perpetuities statute, see F.S. § 689.225). That's what happened in this case. A Will that was executed in 1967 became the subject of litigation in 2003 . . . 36 years after the date it was signed!

The 1967 Will contained a "default" clause common to any well drafted Will. Essentially, the document directed that in the event the testator's children predeceased his surviving spouse, upon the death of his surviving spouse the trust corpus was to be distributed to the "heirs" of his deceased children. What was unclear was whether the 1967 definition of heirs was applicable or the 2003 definition of heirs was applicable. The Fourth District Court of Appeals ruled that under Florida law the presumption is that the testator intended the term "heirs at law" to be construed under the statutes in existence at the time the Will was executed, i.e., 1967.

The entire dispute could have been avoided if the default clause had stated what law was applicable, as the following example does:

If any property is subject to this article under another provision of this Trust Agreement, the Trustee shall distribute that property to my heirs at law determined under Florida law then in effect as if I had died intestate and unmarried on that date as a resident of Florida.

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Rosoff v. Harding, 2005 WL 1163101 (Fla. 4th DCA May 18, 2005) (Trial Court Affirmed)

Sometimes a belts-and-suspenders approach to estate planning is not just overkill, it actually ends up doing more harm than good. In this case "Brother" wanted to look out for his sister. So far, so good. So Bother's Will creates a testamentary trust for Sister's life-time benefit and gives her a testamentary power of appointment over the trust corpus. Again, so far so good. But just in case Sister might be victimized, Brother's Will required that any exercise of Sister's power of appointment within 18 months of her death had to be witnessed by a corporate officer of his Corporate Trustee. In theory, this last clause probably sounded like a good idea. In practice, this belts-and-suspenders approach resulted in unintended consequences that the Fourth DCA characterized as "extremely unfortunate" and "unintentional," but beyond the "court's power to correct."

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Cohen v. Guardianship of Cohen, 30 Fla. L. Weekly D664 (Fla. 4 DCA March 9, 2005) (TRIAL COURT AFFIRMED)

Commenting that this case presented an issue of "first impression in Florida," the Fourth DCA affirmed a trial court's refusal to enforce burial instructions in the decedent's Will based on clear and convincing evidence presented by his wife of forty years and others that he had changed his mind since executing his Will. The Fourth DCA held that a testator's body is not considered "property." As such, the general rule of construction found in Probate Code Section 732.6005(2) requiring Wills in Florida to be deemed to pass all property that the testator owns at death does not apply to bodily dispositions. Instead, the 4th DCA formulated the following rule regarding the disposition of a Florida testator's body:

[A] testamentary disposition is not conclusive of the decedent's intent if it can be shown by clear and convincing evidence that he intended another disposition of his body.

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Lumbert v. Estate of Carter, 867 So.2d 1175 (Fla. 5th DCA Feb. 27, 2004) (TRIAL COURT REVERSED)

Molly Joy Carter ("Mom") executed a will on February 23, 1994 that left all of her $1.5 million estate in trust for her only child, Lisa Lumbert ("Daughter"), until Daughter reached certain ages, at which time the trust assets were to be distributed to her outright and free of trust.

Mom died and her will was admitted to probate on August 30, 2000. Fourteen months later Daughter died on October 15, 2001 at age 41. At the time of Daughter's death, most of Mom's $1.5 million estate was still being administered, so only about $100,000 had been transferred to Mom's testamentary trust for Daughter. Mom's brothers and sister argued that Article IV E. of Mom's trust for Daughter should control what happens with the rest of Mom's estate, which would result in most of Mom's estate going to them. Daughter's surviving husband argued that Articles IV D. of Mom's trust should control, which would, not surprisingly, result in most (i.e., two-thirds) of Mom's estate going to him.

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