Our probate code uses the “interested person” concept to ensure that anyone who has a stake in a particular decision made during the course of an estate’s administration receives notice and an opportunity to be heard before a probate judge rules. F.S. 731.201(23) defines an “interested person” in generic terms as follows:
[A]ny person who may reasonably be expected to be affected by the outcome of the particular proceeding involved. … The meaning, as it relates to particular persons, may vary from time to time and must be determined according to the particular purpose of, and matter involved in, any proceedings.
Interested Persons in Probate Proceedings
You basically can’t administer an estate if you’re not constantly thinking about who the “interested persons” are. For example, a person’s status as an interested person determines whether she or he has standing to commence a probate proceeding by filing a petition for administration (F.S. 733.202), or contest a will that someone else is trying to probate (F.S. 733.109(1)), or contest a personal representative’s fees (F.S. 733.617(7)), or contest a personal representative’s attorney’s fees (F.S. 733.6171(5)). A person’s status as an interested person also determines whether she or he is entitled to receive interim probate accountings (Fla. Prob. R. 5.345) and a personal representative’s petition for discharge and final probate accounting (Fla. Prob. R. 5.400).
Trusts in Probate Proceedings
One of the basic building blocks of modern estate planning is the use of testamentary trusts and revocable trusts. Which means it’s extremely common to find yourself administering a probate estate in which your primary — if not only beneficiary — is the decedent’s trust. Against this backdrop, as probate practitioners we’re often called upon to determine if the trustees or beneficiaries of a decedent’s trust are “interested persons” of the probate estate. Appellate decisions involving this question are rare. We now have two new appellate court rulings providing guidance on this common scenario, both of which are must reads for probate practitioners.
Case Study #1: Are beneficiaries of a decedent’s testamentary trust “interested persons” of his probate estate? YES
Carmel v. Fleischer, — So.3d —-, 2024 WL 3057578 (Fla. 4th DCA June 20, 2024)
In this case a beneficiary of the decedent’s testamentary trust contested the personal representative’s petition for discharge. According to the 4th DCA, the objecting trust beneficiary “seeks to prevent the testamentary trust for his benefit from being dissipated.” Nonetheless, the probate judge ruled he wasn’t an interested person, and dismissed his claims for lack of standing. Wrong answer says the 4th DCA. Here’s why:
In Richardson v. Richardson, 524 So.2d 1126 (Fla. 5th DCA 1988), the court applied section 731.201(23) to determine that a contingent beneficiary of a testamentary trust is an interested person under the probate code. Id. at 1127. The Fifth District reversed an order granting the personal representative’s motion to strike a beneficiary’s objection to the final accounting and petition for discharge, stating:
Appellant is a contingent beneficiary under the two testamentary trusts. Although his interest may never “vest in possession or enjoyment,” it is already “vested in interest” and in legal contemplation. Such legal interest may reasonably be expected to be affected if the personal representative has not properly administered the decendents’ estate and does not deliver to the testamentary trusts all of the assets to which the trusts are entitled under the will. Therefore appellant is “an interested person” within the meaning of those words as defined in section 731.201(21), Florida Statutes, and Fla. R. P. &G.P. 5.190(21) and is entitled to object to the personal representative’s final accounting and discharge.
Id. (footnote omitted) (emphasis added).
We agreed with Richardson in In re Estate of Watkins, 572 So.2d 1014, 1015 (Fla. 4th DCA 1991). There, a son who was a contingent beneficiary of a trust under the will, petitioned for revocation of probate, contending that his mother-who was a beneficiary of a testamentary trust as well as personal representative of the estate-had committed fraud in the procurement of the will. Id. We held that the son, as a contingent beneficiary, was an interested person who had standing to seek revocation of probate. Id.
Case Study #2: Are trustees of a decedent’s revocable trust “interested persons” of his probate estate? YES
Wilson v. In re: Estate of Loftin, — So.3d —-, 2024 WL 4219383 (Fla. 3d DCA September 18, 2024)
F.S. 731.201(23) defines an “interested person” in generic terms as “any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved.” But there are some scenarios that are so common the statute goes on to tell us these parties are always interested persons. One such scenario involves trustees of revocable trusts where the issue is some expense that could deplete the assets of the trust. Here’s how that particular scenario is addressed in F.S. 731.201(23) as part of the statutory definition of “interested person”:
In any proceeding affecting the expenses of the administration and obligations of a decedent’s estate, or any claims described in s. 733.702(1), the trustee of a trust described in s. 733.707(3) is an interested person in the administration of the grantor’s estate.
You’d think that with this kind of clear statutory text you’d never have to waste time and money appealing the exact same fact scenario covered by the statute … and you’d be wrong. A probate judge ruled the trustee in this very scenario wasn’t an interested person. Wrong answer says the 3d DCA. Here’s why:
Thomas Wilson appeals two orders granting Jorian Loftin’s (“Jorian”) counsel’s petition for payment of Class 1 Administrative Expenses, which found Wilson lacked standing to object to the petition. We reverse, finding Wilson had standing to object to the petition as co-trustee of a revocable trust that is the residuary beneficiary of the estate. “Section 733.6171(5) of the Probate Code, which governs the compensation of attorneys for the personal representative, confers standing to object to a fee request upon an ‘interested person’ ….” Duff-Esformes v. Mukamal, 332 So. 3d 17, 19 (Fla. 3d DCA 2021) (citing § 733.6171(5), Fla. Stat. (2021)). An “interested person” is defined as “any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved” and as the trustee of a trust in any proceeding affecting the expenses of the administration of a decedent’s estate. § 731.201(23), Fla. Stat. (2022). We conclude, based on the plain language of statutes, that Wilson had standing as co-trustee to object to the petition for attorney’s fees and costs filed by Jorian’s counsel.