Prenuptial agreements get litigated all the time in probate proceedings. The challenge in these cases (as in all inheritance litigation) is to not let yourself get caught up in your client’s wishful thinking. Just because a certain outcome seems really unfair doesn’t mean your probate judge will (or should) rule in your favor. This may seem like an obvious point, but you’d be surprised how hard it can be not to fall into this trap in real life. This case is a prime example.
Wilson v. Wilson as Trustee of Paul C. Wilson Living Trust, — So.3d —-, 2019 WL 3808162 (Fla. 4th DCA August 14, 2019)
In this case the decedent and his wife entered into a prenuptial agreement in 2011 that contained all the standard waivers, including a waiver of wife’s elective share rights. In 2014 husband executed a revocable trust that contained the following clause:
There shall be set aside from the property of this trust as much property as is necessary to satisfy the Wife’s elective share pursuant to Section 732.201, et seq., of the Florida Statutes, provided the requirements thereunder are satisfied and a timely election is filed.
If this sentence had ended right before the word “provided,” one could reasonably construe it as a 30% formula clause based on our elective share statutes (under F.S. 732.2065 wife gets 30% of husband’s elective estate). But when you add the text after the word “provided,” it seems pretty clear the clause is pre-conditioned on wife asserting her elective share rights.
Husband died in 2017. When wife did what she was told to do in her husband’s trust (file an elective share claim), husband’s son from a prior marriage objected. Based on wife’s contractual waiver her elective share claim was dead on arrival. Now you might ask yourself (I certainly did), why would husband include a self-canceling clause in his trust? I have no idea, and the 4th DCA doesn’t tell us. And I’m sure wife thought it was all really unfair.
So wife tried to salvage her formula bequest by arguing that husband unilaterally amended their prenup when he signed his trust agreement; thus voiding her elective share waiver. Sounds plausible. Here’s the problem, the moment wife framed her case as a unilateral amendment of the couple’s prenup she was doomed as a matter of law. Here’s why:
We find that the language of the prenuptial agreement unambiguously waived the wife’s elective share. The agreement clearly stipulates that each party has waived their right to the estate of the other, including the right to an elective share. The creation of the trust agreement could not modify the prenuptial agreement since it was not signed by both parties as required by the prenuptial agreement. The controlling Florida Statute also states that modification of a prenuptial agreement is valid only if signed by both parties. See § 61.079(6), Fla. Stat. (2014) (“After marriage, a premarital agreement may be amended, revoked, or abandoned only by a written agreement signed by the parties.”).
Further, any testamentary gifts, by will or codicil, envisioned by the prenuptial agreement would not invalidate any of the provisions of the prenuptial agreement. Therefore, even if the decedent gave the wife a testamentary gift, the waiver of the elective share would still be effective. Thus, if the decedent intended to give the wife a testamentary gift, he could have done so by will or codicil without relying on an elective share and specifically the requirements of the elective share statute.
But what about “reforming” the trust?
There’s an alternative path this case could have gone down. Rather than framing the case in terms of a unilateral amendment of the couple’s prenup, wife could have instead focused on “reforming” the text of husband’s revocable trust. In other words, focus the case on the trust, not the prenup.
A trust reformation action allows a court to re-write a trust — even if the text is clear and unambiguous — if you prove the text as written contains a mistake; it doesn’t reflect husband’s actual intent. This is an equitable remedy that’s been around for a long time and in 2007 was codified in section 736.0415 of our trust code (for more on the backstory to this statute see here).
By the way, a trust-reformation strategy may have been considered and abandoned in this case for good reason (reformation cases are never easy), or used in the case and simply not addressed in the 4th DCA’s opinion. There’s no way to know. But this I do know: reformation is a powerful tool that’s available in trust litigation but foreign to contract-construction litigation (thus easily overlooked). If it’s not already part of your litigation toolbox, it should be.