Brandan J. Pratt of Huth, Pratt & Milhauser in Boca Raton was on the winning side of Markes v. Markes, an interesting 4th DCA appellate opinion I wrote about here involving a contested, multi-jurisdictional estate with contacts in New York, Florida and Jamaica. The 4th DCA ruled in that case that a Florida probate judge can’t transfer a probate proceeding to New York if the decedent owned real estate in Florida. I invited Brandan to share some of the insights he drew from this case with the rest of us and he graciously agreed.
What strategic decisions did you make that were particularly outcome determinative at the trial-court level? On appeal?
From a strategy standpoint, we wanted to have the domiciliary estate administration in Florida for a few reasons. First, Florida domiciled individuals are not subject to state estate tax. Whereas, New York domiciled individuals are subject to state estate tax, which has much lower exemption level than the federal estate tax. This estate would not be subject to federal estate tax, but has the potential of being subject to estate taxes in New York if the Decedent’s domicile was New York. Second, the Decedent didn’t own any real estate in New York, but owned ten pieces of real estate in Florida. Therefore, if New York was the domiciliary estate administration, there would still have to be an ancillary estate administration in Florida, which would increase the costs of administration.
We were anticipating that the Appellant would contest the validity of the Decedent’s Will. We wanted to file our Petition for Administration in Florida before proceedings in New York were initiated, so we could claim that the Florida court had jurisdiction under the principle of priority in administration. The Appellant was not a beneficiary under the Will and was not nominated as personal representative under the Will. Accordingly, we were not required to serve him by formal notice with the Petition for Administration or serve him with the Notice of Administration. We made the strategic decision to serve the Appellant with the Notice of Administration to provide a time frame for contesting the validity of the Will and to help solidify the jurisdiction of the administration in Florida.
If you had to do it all over again, would you have done anything different in terms of framing the issues for your trial-court judge? On appeal?
I don’t think we could have done anything differently, and considering the outcome of the case, we believe we made the correct decision. It was a complex jurisdictional case. The Probate Code states that domicile is synonymous with residence. However, the case law explains that a person can have more than one residence, but only one domicile. The domicile is the residence that the Decedent intends to be his permanent legal residence. In this case, the Decedent had three residences. We thought that we had enough evidence to prove that the Decedent intended for his Florida residence to be his domicile based on the actions that the Decedent took to make Florida his domicile. The fact that the Decedent was the subject of ongoing guardianship proceedings in New York at the time of death may have confused the trial court due to the differences in the laws, for a few reasons.
First, the law governing jurisdiction in guardianship proceedings is substantially different in New York. In Florida, the jurisdiction of the guardianship proceedings and probate proceedings are both where the Ward or Decedent resides. If the Decedent is subject to a guardianship in Florida at the time of death, the probate proceedings are typically filed in the same court as a companion case and are heard by the judge who is hearing the guardianship. In contrast, jurisdiction of guardianship proceedings in New York can be based on simply being “present in the state” or having “personal connections” to the state. Jurisdiction for probate proceedings in New York is based on domicile.
Second, the laws governing guardians of the property are substantially different in New York. In Florida, to have a guardian of the property appointed, the Ward must be completely incapable of exercising the rights that are removed. In New York, as in this case, the Decedent had a financial guardian appointed, but retained many financial rights. Specifically, the Decedent had a credit card, had unrestricted access to a bank account that was continually replenished by the guardian, retained the right to travel, retained the right to determine his domicile, and even retained the right to make changes to his estate plan.
Another confusing aspect of the New York guardianship proceedings was that the guardianship court entered an order requiring the Decedent’s Will to be deposited with the New York Surrogate’s Court. The Appellee argued that the guardianship court’s order regarding the Will deposit was an indication of the New York guardianship court’s intention to assume jurisdiction over the Decedent’s probate proceedings, which is how things would be handled in Florida. In Florida, Wills cannot be filed with the court prior to a testator’s death. However, New York law allows a testator to file a Will with the Surrogate’s Court for safe keeping, which was ordered by the Guardianship Court. However, this was not an indication of the New York guardianship court’s intention to take jurisdiction over the probate proceedings because guardianship proceedings are handled in the Supreme Court. The Will was ordered to be deposited with Surrogate’s Court, which is where probate proceedings are handled. Accordingly, the guardianship court could not assume jurisdiction over the probate proceedings, because they would be handled by different courts in New York.
Do you think there’s anything that could have been done in terms of better estate planning to avoid this litigation or at least mitigate its financial impact on the family?
The main issue had to do with the determination of the Decedent’s domicile. The Decedent was domiciled in New York for many years, while also owning a condo that he visited regularly in Florida. The Decedent was retiring and was selling all of his real estate in New York and wanted to change his domicile to Florida. From a planning perspective, the Decedent did the things that a Florida attorney would advise to change domicile to Florida, including filing an affidavit of domicile, claiming homestead on his Florida residence, obtaining a Florida driver’s license, registering to vote in Florida, and identifying Florida as his address on his federal income tax returns. Unfortunately, there were some things done by attorneys in New York that I would not have recommended. Specifically, after the Decedent had taken the action to change his domicile to Florida, he made changes to his estate plan through an attorney in New York. The estate planning documents that the Decedent signed contain language that state that the Decedent is a “resident” of New York. Although the estate planning documents don’t say that the Decedent is “domiciled” in New York, it would have been better to have stated that the Decedent was domiciled in Florida. However, under those circumstances, the attorney in New York would not have been able to prepare the documents. In addition, an attorney was appointed as the guardian of the property in New York. The guardian filed tax returns listing the Decedent’s accountant’s address in New York as the Decedent’s residential address and continued to pay New York state income taxes. We understand that the guardian was reluctant to list the Decedent’s Florida address as the Decedent’s residential address on the tax returns out of concern that the guardianship proceedings would be transferred to Florida.
Any final words of wisdom for estate planners and probate lawyers of the world based on what you learned in this case?
I feel like attorneys in Florida, especially in the trust and estate practice area, are taught that there are a model set of laws (such as the Uniform Probate Code and Uniform Trust Code) that have been adopted in Florida and many other states. In addition, when the substantive laws of another state apply in Florida proceedings, it is presumed that the laws of the other state are the same as the laws in Florida. Therefore, it is easy to fall into the trap of assuming that the laws of a different state are similar to the laws in Florida. I would caution against falling into this trap. As can be seen from this case, the laws in New York are vastly different from the laws in Florida related to estate and guardianship administration.