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Attorneys faced with elderly clients sliding into incapacity grapple with daunting ethical challenges. For family members helplessly watching from the sidelines as an elderly parent’s financially exploited, the emotional toll is way worse. And these are not isolated incidents.

According to AARP, “in 2017 alone, reports of suspicious financial activity involving older folks totaled $1.7 billion. There were 63,500 reports that year, four times as many as in 2013, according to the CFPB, an independent federal agency …”

Case in point: an elderly parent who amends a revocable trust under suspect circumstances. Once the suspected exploitation is discovered, the temptation is to challenge the trust amendment head-on. As demonstrated in the Habal case below, that would be a mistake. But that doesn’t mean you can’t do indirectly what’s impossible to do directly.

What’s the right way and the wrong way to litigate a revocable trust while the settlor’s alive?

Your only viable strategy in these cases requires a two-step process. First, seek a guardianship (this assumes the settlor’s legally incapacitated). Second, once you’re appointed guardian petition the court for authority to contest the suspect trust amendment under F.S. 744.441(k), or to reverse the harm done by re-amending the trust back to its prior provisions under F.S. 744.441(s). By the way, the reverse-trust-amendment option’s not always available. See Gurfinkel v. Josi, 972 So.2d 927 (Fla. 3d DCA 2008) (right to amend can be restricted to settlor by trust instrument itself).

Unfortunately, the guardianship route doesn’t solve the problem of the elderly settlor who isn’t legally incapacitated, but is clearly susceptible to undue influence due to diminished capacity. (For more on this point you’ll want to read an excellent series of articles by Sarasota elder law attorney R. Craig Harrison entitled Protecting the Elderly from Financial Exploitation: The Dilemma and Solution, Parts I and II.) That being said, wasting a whole lot of time, money and effort litigating a revocable trust while the settlor’s alive but not subject to a guardianship doesn’t do anyone any good either, as the litigants in the Habal case learned the hard way.

Case Study

Habal v. Habal, — So.3d —-, 2020 WL 5372289 (Fla. 4th DCA September 09, 2020)

This case involved an elderly parent who created a revocable trust when his first wife died after forty years of marriage. According to the 4th DCA, at that time, “the son was a beneficiary of the revocable trust. The settlor remarried and later amended the revocable trust.” We’re not told what the change was or what the circumstances of that change were, but whatever happened, it triggered a lawsuit by son challenging the trust amendment.

Not surprising, son’s lawsuit was dismissed pursuant to F.S. 736.0207(2), which bars this kind of frontal attack while the settlor’s alive. According to the 4th DCA:

On appeal, the son argues dismissal was improper because the settlor lacked the capacity to amend the trust, as supported by medical documents. In addition, the son argues exceptional circumstances exist to allow for a tortious interference claim.

Both arguments went nowhere. First, F.S. 736.0207(2) makes this kind of lawsuit impossible while the settlor’s alive — unless it’s prosecuted by the settlor’s guardian.

[A] plain reading of section 736.0207(2) clearly requires a trust to become irrevocable “by its terms or by the settlor’s death” before any action to contest the trust may commence, unless the settlor is incapacitated, in which event only the guardian may commence such an action. ... Both sides in this case acknowledge that the son is not the guardian of the settlor’s property. Thus, the trial court properly dismissed the son’s claims based on its finding that section 736.0207(2) barred the trust contest while the settlor was still alive, regardless of whether the settlor was incapacitated or not when he amended the revocable trust.

Son’s second argument was more creative, but equally doomed. Claiming “tortious interference” isn’t a free pass. So saith the 4th DCA:

The trial court also correctly found that the son’s exceptional circumstances argument for the tortious interference claim was without merit. See Claveloux v. Bacotti, 778 So. 2d 399, 400 (Fla. 2d DCA 2001) (testator’s incompetence did not render daughter’s probate remedies inadequate or ineffective in her tortious interference suit); Whalen v. Prosser, 719 So. 2d 2, 6 (Fla. 2d DCA 1998) (“[A]lthough the law recognizes interference with an expectation as an intentional tort between litigants other than the testator, there is a tendency to prefer that such inheritance disputes be resolved in post-death proceedings and to allow the tort only in circumstances in which no adequate, alternative remedy exists.”).

Lesson learned?

If you get a call from desperate family members wanting to protect dad from obvious financial exploitation, your first question should be: is a guardianship warranted? If the answer’s “yes,” Habal provides a road map for action (by showing us what NOT to do).

If the answer’s “no” because dad isn’t legally incapacitated — but is clearly susceptible to undue influence due to diminished capacity — you’re in one of those really hard “in between” scenarios that our legal system just isn’t equipped to handle — until after the settlor’s death. Those are always the hardest calls. And by the way, don’t beat yourself up if you can’t help; you’re not the problem, it’s systemic. Here again from Part II of the Harrison articles:

There are numerous persons in Florida who are living with diminished capacity. Most of these elderly adults do not want to be classified as “incapacitated.” They want to maintain all of their rights. Because of distance and the change of our society, many of the elderly are socially isolated from their families. These elderly persons may become dependent on neighbors, friends, and others. They are subject to the influences of these individuals, and the numbers of those with diminished capacity are growing each year.

The courts cannot … protect these individuals from the undue influence of others or their poor judgment. The legislature is reluctant to interfere with the rights of those individuals who have legal capacity, and the legal representation of these individuals can prove difficult.