As lawyers, one of our jobs is to anticipate the “worst case scenario” and counsel our clients appropriately. For trusts and estates lawyers the worst that can happen usually involves a client losing a sizable inheritance, paying unnecessary taxes, getting surcharged for doing something wrong as a fiduciary, or otherwise suffering some other form of economic setback. We’re not thinking jail time. Well, maybe it’s time we did.
Under F.S. 825.103 just about any kind of dispute your average trusts and estates lawyer encounters in an average year can get your client arrested and sent to prison for a very long time. And there’s a state agency dedicated to prosecuting these cases; it’s called Adult Protective Services and their motto is: “report elder abuse — it’s a crime.”
Criminalizing what most of us would consider to be civil disputes is a growing problem (see here), and the trusts and estates world is no exception (as demonstrated by the Astor case). Which means in the future we may need to consider teaming up with criminal defense attorneys much more frequently than we have in the past, start advising our clients to “plead the 5th” at the first sign of trouble (see here), and take steps to make sure we don’t get prosecuted ourselves (see here).
The 4th DCA’s opinion in this case involves a scary example of what can go terribly wrong when F.S. 825.103 — a broadly-worded statute meant to protect the elderly from financial exploitation — gets used to prosecute what should be a garden variety civil dispute involving a contested inheritance.
A case study in “overcriminalization”
This case involves an elderly widow named Mary Teris who had a “mother/daughter-type relationship” with a woman named Cynthia Franke, her stockbroker and friend of over thirty years. In 1996 Ms. Teris created a special needs trust for her two disabled adult sons and a separate revocable trust apparently naming family members as the residuary beneficiary of her $10 million estate. At issue in this case are changes Ms. Teris made to her existing estate plan in 2009, which the 4th DCA described as follows:
Teris met with [estate planning attorney] Mr. Friedman and made multiple changes to the trust. At issue are changes made on June 22, 2009, when Teris changed the trustee of the trust from her sister to Franke and made Franke a residuary beneficiary of the trust. According to Mr. Friedman, Teris made the changes because her sisters were close to her age and would be unable to manage her property if something happened to her. She wanted someone she could trust to manage her assets and take care of her sons, so she chose Franke. Teris named Franke as residuary beneficiary because her sons were already taken care of with the special needs trust, her sisters did not need her money, and Franke had always been there for her.
Now assume Ms. Franke walks through your door, tells you she needs to update her estate plan to account for the sizable inheritance she’s expecting, and also tells you about troubling rumors she’s heard regarding accusations of undue influence by irate family members. “What’s the worst that can happen?” she asks. If you’re an estate planner, I’m guessing you might respond by discussing the evils of the estate tax and a possible challenge to the trust after the settlor passes away. Here’s what you probably wouldn’t say, “you could be criminally prosecuted and face up to 30 years in prison.” Well, that’s exactly what happened.
Does a future expectancy in a will or trust fall under F.S. 825.103’s purview?
Ms. Franke was arrested in 2010, criminally prosecuted, and ultimately convicted by a jury under F.S. 825.103 for exploitation of an elderly person (see here). After the charges were filed, Ms. Franke lost her job and was stripped of her license as a broker. Adding to the nightmare, she was eventually sentenced to seven years in prison, and spent close to two years behind bars before the 4th DCA reversed her conviction (see here).
When the case finally got to the 4th DCA Ms. Franke’s conviction was reversed for technical reasons best understood by criminal defense attorneys. But the 4th DCA also made a point of commenting on whether this kind of case should have ever been prosecuted to begin with, focusing on fundamental property-law principals familiar to most practicing trusts and estates lawyers:
Finally, we note that Franke would not have received any of Teris’s property until after Teris passed away. Even then, Franke would receive something only if anything remained in the trust. Although we need not decide the issue in this case, it does not seem that obtaining the future expectancy of property under a will or trust falls under the purview of the statute. Prior reported cases which we have found addressing section 825.103 have concerned a present transfer of property, not a future expectancy in a will or trust. See Guarscio v. State, 64 So.3d 146, 147 (Fla. 2d DCA 2011) (defendant used victim’s proceeds from refinancing mortgage on a house); Bernau v. State, 891 So.2d 1229, 1230 (Fla. 2d DCA 2005) (victim endorsed $847,000 check to defendant); McNarrin v. State, 876 So.2d 1253, 1254 (Fla. 4th DCA 2004) (defendant cashed $6000 check signed by victim); Everett, 831 So.2d at 739–40 (defendant closed out one of victim’s bank accounts in the amount of $38,604.79 at the victim’s request).
What’s the takeaway?
We all know the promise of a future inheritance isn’t something you own today, it’s an “expectancy” that entitles you to zero current property rights until the inheritance is actually received — if ever (see here). So how can you get convicted and sent to prison if all we’re talking about are conflicting claims to a future expectancy under a revocable trust? Until now I would have said that’s impossible. And I’d have been wrong.
Overcriminalization isn’t a problem only criminal defense attorneys need to deal with; that’s the point, it can happen to anyone. So the first takeaway from this case is that if you’re a trusts and estates lawyer and someone involved in a case somehow involves Adult Protective Services, criminal prosecution is a risk you need to incorporate into your thinking, no matter how far fetched the alleged “crime” may seem.
The second takeaway is more positive. The 4th DCA’s decision didn’t turn on whether a future expectancy in a will or trust falls under F.S. 825.103’s purview, but the court strongly hinted it did NOT. That kind of “hint” is gold for working lawyers, and it’s certainly something you’ll want to add to your toolbox.