The consequences of un-clear drafting or ill-considered provisions included in testamentary documents can be years of litigation. The cost of avoiding this type of litigation is always pennies on the dollar: an extra hour working on the document or the cost of an “extra set of eyes” is usually less than a rounding error when compared to the cost of litigation. The following cases are examples of this type of cost. Note that these cases all generated appellate opinions. In other words, not only were they litigated at the trial court level, but they generated appellate court proceedings as well. The number of un-appealed litigation arising out of sloppy drafting is in all likelihood several orders of magnitude higher.
The case involved the reformation of the Virginia F. Davis 1986 Irrevocable Trust (the “1986 trust”), which provided that when Mrs. Davis died it would be divided in half with one share for each of her two sons and each son’s share would be distributed in three installments-one immediately, one five years later, and the last one five years after that. Mrs. Davis died on November 2, 2000, predeceased by her husband (i.e., about 14 years after the 1986 trust was signed). The litigation in question arose in the context of probate-administration proceedings involving one of Mrs. Davis’ children, Scott F. Davis, who died without issue on November 19, 2002 (i.e., about 16 years after the 1986 trust was signed) – having received only one of the three installment payments he was originally entitled to under the 1986 trust. Under Scott Davis’ will, the residuary beneficiaries of his estate were the Pittsburgh State University Foundation, Inc. and the WPBT Communications Foundation, Inc. According to the Fourth DCA, the 1986 trust contained the following drafting error:
The 1986 trust, as a result of a drafting error, omitted instructions as to what would happen if one of the sons died without children before he had received his installment payments. The trust provisions expressly covered what would happen if a son died with children (providing that the unpaid installments would go to those children) but stopped without going to the next step, directing where the unpaid installments should go if a son had no issue.
In this case the Second DCA was asked to rule on an internal inconsistency within a trust agreement. The problematic language revolved around whether a surviving widow had the authority to revise a trust agreement after her husband had passed away. Surviving widow signed a trust amendment disinheriting one set of her grandchildren. Grandchildren understandably didn’t think this was a good idea, and the case ended up in court. Here’s the “problematic” language, as described by the Second DCA:
Article XV of the Trust provides, “AMENDMENT AND REVOCATION: This Trust is subject to revocation, change or amendment, in writing, by the Grantors from time to time.” Article XII contains rules of construction for the Trust instrument, including the following provision that is pertinent to this appeal: “Unless the context required [sic] otherwise, masculine personal pronouns include the feminine, and the singular and plural may be construed interchangeably.”
At the trial court level the judge ruled that surviving widow lacked the authority to amend the trust agreement. The trial court agreed with the disinherited-grandchildren when they argued that use of the plural form “Grantors” in the trust-amendment section meant widow lacked authority to unilaterally amend the document. The Second DCA reversed, based on the following line of reasoning:
[I]n considering the trust instrument as a whole, it is clear that if the singular/plural clause were not applied, it would produce absurd results. Every reference in Article I is to the plural form “Grantors.” Article I deals with the disposition of principal and income of the Trust to the Grantors during their lifetime. If the references to the “Grantors” were construed to mean only the plural form, then after the death of the first Grantor the surviving Grantor could no longer receive income from the Trust. Such a result is contrary to the stated purpose of the Trust, which is to provide for the McNeills “for so long as they may live.” Article I also provides that “the Trustees shall make payments from the principal of the Trust Fund to or for the benefit of the Grantors in such sums and at such times as the Grantors may request from time to time.” Again, if construed to mean only the plural “Grantors,” then the surviving Grantor would have no access to the principal of the Trust even though the trust was established to provide proper care for the McNeills and to allow them to maintain “a style of living to which they have been accustomed.”
Like Article I, Article XV must be construed in accordance with the singular/plural clause. This is consistent, as in Article I, with the overall plan that the Grantors retain control over their assets as long as either of them lived. Nothing in the context of Article XV requires that “Grantors” be construed to mean only the plural form. When construed to include the singular “Grantor,” Louise M. McNeill, as the surviving Grantor, could amend the Trust pursuant to the power to revoke or amend contained in Article XV. Thus, we reverse the trial court’s order granting summary judgment as to count I and determining that the Amendment by Louise M. McNeill was invalid and remand for further proceedings on the Appellees’ complaint.
Suppose a client with 9! children asks you what’s the best way to provide for the orderly disposition of his 34-acre farm. He wants to ensure that the farm either stays in the family intact, or is sold as a single property, not piecemeal. A simple way to effectuate this type of plan is to put the property in a trust, partnership or LLC and include purchase-and-sale provisions that achieve the desired outcome. The wrong answer is to say: “heck, that’s simple, just say in your will that all of the kids have to agree to a sale.” That’s what the Vinson clan learned in this case. The portion of Vinson Sr.’s will at issue in the case was described as follows by the First DCA:
Hardy Vinson, Sr., executed a will leaving his 34-acre farm and home in Alachua County to his nine living children as tenants in common. The will provided in pertinent part:
The “Vinson Estate” shall not be subject to partition or forced sale by any heir, but shall only be sold upon agreement of all heirs. Taxes and ownership expenses shall be shared equally among the children. Any heir that pays more than his or her share shall be entitled to contribution from the nonpaying heirs upon sale of the property.
When 5 of Vinson Sr.’s 9 children sued for partition of the farm (surprise!?), the trial court ruled in their favor. On appeal the First DCA held that the clause in the will prohibiting partition or sale was an “unlawful restraint on alienation of real property” and upheld the trial court’s ruling. The First DCA explained its rationale as follows:
When real property is conveyed in fee simple, the grantee or devisee acquires a right to sell or dispose of the property as an incident to the right of ownership. The right of alienation is said to be an inherent and inseparable quality of the estate. See 61 Am.Jur.2d Perpetuities, Etc. § 102 (2002); 3 Thompson Real Property § 29.03(b), at 707 (2001). An absolute restraint on alienation is inconsistent with the right of ownership and is therefore invalid. See generally Iglehart v. Phillips, 383 So.2d 610 (Fla.1980) (surveying the case law pertaining to restraints on alienation).
The rule against restraints on alienation applies to restrictions on partition of real property, as well as restrictions on sale. The right to seek partition of property owned jointly in a tenancy in common is an incident to the right of individual ownership. See Richard R. Powell, The Law of Real Property, § 77 846 (1991). While there appears to be no precedent in Florida for the precise issue presented in this case, other states have held that prohibitions against partition or forced sale of property devised in a will are unlawful restraints on alienation.