Aldrich v. Basile, — So.3d —-, 2014 WL 1240073 (Fla. March 27, 2014)

If you make your living drafting wills or enforcing them in court, here’s what this case should NOT be about for you: inflicting post-mortem punishment on a woman for engaging in DIY estate planning (which was the slant reflected in this short ABA piece reporting on the case).

Instead, what this case is really about is how strict compliance with Florida’s execution formalities for wills and codicils, which are meant to be intent-serving devices, ironically produced intent-defeating results.

Part 1: Ms. Aldrich’s 2004 will:

This story has two acts, only one of which was addressed in the 1st DCA’s underlying decision (which I wrote about here). Part 1 involves an “E-Z Legal Form” the testatrix, Ms. Aldrich, wrote her will on in April 2004. Under that will Ms. Aldrich listed all of the assets she owned at the time and stated she wanted those assets to go to her sister Mary Jane Eaton, if she survived here, otherwise to her brother James Michael Aldrich. Ms. Aldrich’s will didn’t contain a residuary clause, nor did she otherwise provide for who should receive any after-acquired assets. If nothing had changed in the five years between 2004 (the year Ms. Aldrich signed her will) and 2009 (the year she died) all would have been well. But the facts did change. Her sister predeceased her, leaving new assets (cash and land) to Ms. Aldrich.

Ms. Eaton did die before Ann, becoming her benefactor instead of her beneficiary. Ms. Eaton left cash and land in Putnam County to Ms. Aldrich, who deposited the cash she inherited from Ms. Eaton in an account she opened for the purpose with Fidelity Investments.

Since Ms. Aldrich’s 2004 will didn’t address who was to receive this after-acquired property and her form will didn’t contain a residuary clause, she was deemed to have died partially intestate by the 1st DCA (see here), a conclusion upheld by the Fla. S.Ct. in this opinion for very practical reasons: if your will doesn’t tell us what to do with all of your stuff when you die, we don’t ask our probate judges to fill this gap on a case-by-case basis, instead we apply the one-size-fits-all distribution scheme found in our intestacy statutes:

There must be a clause in a will that alludes to the after-acquired property in order to avoid distribution of that property through the intestacy statute. Although Mr. Aldrich was the sole devisee under the will, without a residuary clause or general devises, only the property specifically referenced passes to him under the will. Further, if a testator does not allude to after-acquired property in any way, a court would have difficulty deciding how to divide the after-acquired property between multiple beneficiaries. In that instance, the court would be required to equitably distribute the testator’s property. This is a task that has been reserved for the Legislature and has been accomplished through the intestacy statute. See §§ 732.102, 732.103, Fla. Stat.

Also, according to the Fla. S.Ct., if we limit ourselves only to the four corners of Ms. Aldrich’s 2004 will, one could reasonably conclude her intent was to NOT pass her after-acquired property to her brother.

Further, section 732.6005(2) states that “[t]he rules of construction expressed in this part shall apply unless a contrary intention is indicated by the will.” § 732.6005(2), Fla. Stat. (emphasis added). The will in the instant case does in fact indicate a contrary intention to that proposed by Mr. Aldrich. The testator’s will specifically devised all possessions “listed,” to Mr. Aldrich. Therefore, it is clear that the testator did not intend for any property not listed to be distributed by the will.

Bottom line: if we limit ourselves to the four corners of Ms. Aldrich’s 2004 will, the outcome of this case is perhaps unfortunate, and great advertising for why DIY estate planning can be a problem, but not particularly troubling. Here’s and excerpt from Justice Pariente’s concurring opinion on the dangers of using store-bought form wills:

While I appreciate that there are many individuals in this state who might have difficulty affording a lawyer, this case does remind me of the old adage “penny-wise and pound-foolish.” Obviously, the cost of drafting a will through the use of a pre-printed form is likely substantially lower than the cost of hiring a knowledgeable lawyer. However, as illustrated by this case, the ultimate cost of utilizing such a form to draft one’s will has the potential to far surpass the cost of hiring a lawyer at the outset. In a case such as this, which involved a substantial sum of money, the time, effort, and expense of extensive litigation undertaken in order to prove a testator’s true intent after the testator’s death can necessitate the expenditure of much more substantial amounts in attorney’s fees than was avoided during the testator’s life by the use of a pre-printed form.

Part 2: Ms. Aldrich’s 2008 codicil:

But there’s more to this story than Ms. Aldrich’s 2004 will. After her sister died in 2007 Ms. Aldrich hand wrote a note (which was in effect a codicil to her will) making clear her “true” intent was to leave all of her estate, including the after-acquired assets she inherited from her sister, to her one surviving brother, James Aldrich. This is part 2 of the story, and for me it changes everything. Here are the key facts as stated by the court:

Ms. Aldrich’s sister, Ms. Eaton, died on November 10, 2007. Administration of Ms. Eaton’s estate was concluded and an Order of Discharge was entered on July 23, 2008, leaving Ann Aldrich personal and real property. Two days later, Ann Aldrich opened an investment account to deposit the inherited money. Evidence in the record suggests that, later that year, Ms. Aldrich attempted to draft a codicil to her original will. Along with the original will was a piece of paper bearing the printed title “Just a Note” and dated November 18, 2008, below Ms. Aldrich’s handwriting and signature. The handwritten note read as follows:

This is an addendum to my will dated April 5, 2004. Since my sister Mary jean Eaton has passed away, I reiterate that all my worldly possessions pass to my brother James Michael Aldrich, 2250 S. Palmetto, S. Daytona FL 32119.

With her agreement I name Sheila Aldrich Schuh, my niece, as my personal representative, and have assigned certain bank accounts to her to be transferred on my death for her use as she seems [sic] fit.

The note/codicil was signed by Ms. Aldrich and one witness, her niece. So what’s the problem? The note fell short of the two-witness requirement needed for a validly executed codicil, which means it’s legally unenforceable.

Although Ms. Aldrich signed the “addendum,” the signature of Sheila Schuh, Mr. Aldrich’s daughter, was the only other signature that appeared on the face of the document; therefore, the document was not an enforceable testamentary instrument under the Florida Probate Code. See §§ 732.502(1)(b) Fla. Stat. (2004) (requiring signature of the testator along with two attesting witnesses); 732.502(5), Fla. Stat. (2004) (codicil must be executed with the same formalities as a will).

Clearly, Ms. Aldrich’s true intent, as reflected in her 2008 codicil, was to pass all of her “worldly possessions” to her brother, James Aldrich. As observed by Justice Pariente in her concurring opinion:

Unfortunately, I surmise that, although this is the correct result under Florida’s probate law, this result does not effectuate Ms. Aldrich’s true intent. While we are unable to legally consider Ms. Aldrich’s unenforceable handwritten note that was found attached to her previously drafted will, this note clearly demonstrates that Ms. Aldrich’s true intent was to pass all of her “worldly possessions” to her brother, James Michael Aldrich.

If Florida’s strict-compliance approach to will/codicil execution formalities is blocking our courts from effectuating what appears to be Ms. Aldrich’s “true” intent, then maybe her DIY estate planning isn’t the problem here, maybe it’s Florida law that needs fixing.

Could Florida’s new will-reformation statute save the day? NO

In recent years there’s been a movement in many American states away from the all-or-nothing formalism that produces the kind of intent-defeating results we see in the Aldrich case. This movement’s been crystallized in two Uniform Probate Code provisions, the first, UPC § 2-805, loosens the rules for when drafting errors in wills can be corrected (or “reformed”), and the second, UPC § 2-503, codifies the “harmless error” rule for technical execution defects. As I reported here, in 2011 Florida adopted its version of UPC  § 2-805 (F.S. 732.615). This is a good first step, but it’s not a cure all, and it’s probably not the right tool for the Aldrich estate.

As noted in the Florida Bar’s amicus brief, our new will-reformation statute’s meant to correct drafting mistakes that occur at the time the will is signed, not rewrite wills that no longer reflect a person’s testamentary intent based on after-the-fact changed circumstances, which is what happened in the Aldrich case (i.e., her will was fine in 2004, it stopped being fine after-the-fact when sister died in 2007). According to the amicus brief:

In 2011, the legislature created section 732.615, Florida Statutes, which allows a court to reform mistakes made by a testator in his or her will even if the mistake does not appear on the face of the will. . . . [However,] this law does not permit the speculative inclusion of words and intent. See Morey v. Everbank, 2012 WL 3000608, 7 (Fla. 1st DCA July 24, 2012) (interpreting equivalent reformation statute for trusts and holding reformation cannot be used to adjust to changed circumstances or after-thoughts of a settlor).

In the Morey case, which I wrote about here, the 1st DCA expanded on this point as follows:

Reformation is not available to modify the terms of a trust to effectuate what the settlor would have done differently had the settlor foreseen a change of circumstances that occurred after the instruments were executed. See, e.g., Restatement (Third) of Prop.: Wills & Other Donative Transfers. at cmt. h (2003) (Reformation is not “available to modify a document in order to give effect to the donor’s post-execution change of mind … or to compensate for other changes in circumstances.”).

So if F.S. 732.615 isn’t the answer, what is? Think: “harmless error” rule.

Harmless error rule:

Florida’s already taken the first important step away from intent-defeating, all-or-nothing formalism by adopting its version of UPC  § 2-805 (F.S. 732.615). Maybe it’s time we took the next logical step and adopted UPC  § 2-503, the UPC’s harmless error rule as well. Under the harmless error rule a noncomplying will is treated as if it had been executed in compliance with the statutory formalities, if the proponent establishes by clear and convincing evidence that the decedent intended the document as his or her will. If this rule were in place today, Ms. Aldrich’s “true” intent, as reflected in her 2008 codicil, would have likely prevailed. UPC  § 2-503 provides as follows:

Although a document or writing added upon a document was not executed in compliance with Section 2-502, the document or writing is treated as if it had been executed in compliance with that section if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute:

(1) the decedent’s will,

(2) a partial or complete revocation of the will,

(3) an addition to or an alteration of the will, or

(4) a partial or complete revival of his [or her] formerly revoked will or of a formerly revoked portion of the will.

Professors John H. Langbein (Yale) and Lawrence W. Waggoner (Michigan) report in Curing Execution Errors and Mistaken Terms In Wills that the UPC’s harmless error rule for technical execution defects has already been adopted in 8 states (Colorado, Hawaii, Michigan, Montana, New Jersey, South Dakota, Utah, and Virginia).

Harmless error rule = less litigation:

But wouldn’t this kind of rule open the door to more estate litigation? According to Langbien and Waggoner, evidence from jurisdictions that have adopted the rule indicates otherwise, it actually leads to less litigation, not more.

[T]he harmless-error rule actually prevents a great deal of unnecessary litigation, because it eliminates disputes about technical lapses and limits the zone of dispute to the functional question of whether the instrument correctly expresses the testator’s intent. Persons who under the strict-compliance rule would have benefitted from proving an intent-defeating technical defect now lose the incentive to do so under the new rule, because under the harmless-error standard the court will validate the will anyhow.

Below is the abstract for Curing Execution Errors and Mistaken Terms In Wills, in which Langbien and Waggoner sum up the current state of affairs on this front and encourage working probate attorneys to run with these ideas, even in jurisdictions — like Florida — that have yet to legislatively adopt both legs of the UPC’s reform agenda (i.e., in the absence of UPC-type legislation, look to authority/ideas contained in the new Restatement of Property).

Recent years have seen a remarkable change emerge in the way American courts treat cases involving errors in the execution or the content of wills. The courts have traditionally applied a rule of strict compliance and held the will invalid when some innocuous blunder occurred in complying with the Wills Act formalities, such as when one attesting witness went to the washroom before the other had finished signing. Likewise, the courts have traditionally applied a no-reformation rule in cases of mistaken terms, for example, when the typist dropped a paragraph from the will or the drafter misrendered names or other attributes of a devise; the court would not correct the will no matter how conclusively the mistake was shown.

Leading modern authority in a number of American states has now reversed the strict compliance and no-reformation rules. Both by judicial decision and by legislation, the courts have been empowered to excuse harmless execution errors and to reform mistaken terms. Section 2-503 of the Uniform Probate Code treats a noncomplying will as if it had been executed in compliance with the statutory formalities, if the proponent establishes by clear and convincing evidence that the decedent intended the document as his or her will. The new Restatement of Property endorses the harmless-error rule.

The new Restatement authorizes courts to reform mistaken terms in a will. The new Restatement’s reformation provision, which has now been codified in § 2-805 of the Uniform Probate Code and § 415 of the Uniform Trust Code, provides that a court may reform any donative document, including a will, “to conform the text to the donor’s intention if it is established by clear and convincing evidence (1) that a mistake of fact or law, whether in expression or inducement, affected specific terms of the document; and (2) what the donor’s intention was.”

The provisions of the new Restatement and the Uniform Probate Code endorsing the harmless-error and reformation rules for American law bring new opportunities and responsibilities for probate lawyers. The older conventions of the strict-compliance rule and the no-reformation rule are now open to challenge everywhere. Lawyers processing probate matters need to be alert to the opportunity they now have to raise issues that used to be foreclosed. Sad cases of defeated intent that used to be beyond hope may now be remediable. Innocuous formal defects can be excused, and mistaken terms can be reformed, but only if counsel sees the issue and brings it forward and, in jurisdictions that have not codified the new rules, if the court is hospitable to them.

Lesson learned?

Florida’s always been at the forefront when it comes to inheritance law, and that includes the trend away from intent-defeating formalism. Step one was the 2011 passage of F.S. 732.615, Florida’s new will-reformation statute. Sad cases of defeated intent caused by obvious drafting errors that used to be beyond hope may now be remedied. That was a good beginning, but it’s not a cure all. Whether a person’s testamentary intent is carried out shouldn’t turn on innocuous execution defects and the type of “gotcha” litigation it spawns. We’ve gone half way, now we need to take the next logical step and adopt the UPC’s harmless error rule.