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Advancements in assisted reproductive technology have created a class of heirs that would have been unimaginable to prior generations: children both conceived and born after one, or maybe even both, of their genetic parents has died. Falling under the general umbrella term of “posthumous conception,” they are the product of scientific breakthroughs dramatically extending the amount of time the average human has to reproduce (live births have been reported using embryos frozen for over 30 years).

As the science of assisted reproductive technology fundamentally redefines what it means to be an “afterborn heir,” courts find themselves grappling with the inheritance rights of posthumously conceived children, including as beneficiaries of trusts and as intestate heirs. In a case of first impression we now have an opinion of the Florida supreme court ruling for the first time on whether a posthumously conceived child was “provided for” under a pre-deceased father’s will.

Inheritance rights of posthumously conceived children

Under Florida law the only way a posthumously conceived child can inherit from his or her parent’s estate is if the child was “provided for” in the parent’s will; they’re categorically excluded as intestate heirs. We get to this outcome based on two statutes. First, there’s F.S. 732.106, which tells us that afterborn intestate heirs only include children conceived before a parent’s death.

732.106 Afterborn heirs.—Heirs of the decedent conceived before his or her death, but born thereafter, inherit intestate property as if they had been born in the decedent’s lifetime.

Second, there’s F.S. 742.17(4), which tells us that a posthumously conceived child may inherit from his or her parent if “the child has been provided for by the decedent’s will.”

742.17 Disposition of eggs, sperm, or preembryos; rights of inheritance. … (4) A child conceived from the eggs or sperm of a person or persons who died before the transfer of their eggs, sperm, or preembryos to a woman’s body shall not be eligible for a claim against the decedent’s estate unless the child has been provided for by the decedent’s will.

By the way, note that the line of demarcation under F.S. 742.17(4) isn’t the date of “conception” (a slippery term given today’s evolving technology), but is instead the date of “transfer” to a woman’s body of the decedent’s “eggs, sperm, or preembryos.” While the date of conception may be open to interpretation, the date of transfer is not. (Excellent statutory drafting.)

Case Study

Steele v. Commissioner of Social Security, — So.3d —-, 2024 WL 630219 (Fla. February 15, 2024)

This case involved a claim for federal Social Security Survivor benefits for a posthumously conceived child. The child’s father was a Florida resident at the time of his death, so the case turns on the child’s inheritance rights under Florida law. Here are the key background facts as provided by the court:

Philip and Kathleen Steele married in 1997. During their marriage, they had a son—conceived through in vitro fertilization. Following his son’s birth, Mr. Steele submitted additional sperm samples to a fertility clinic.

Thereafter, with the assistance of a lawyer, Mr. Steele prepared a will. At the outset, Mr. Steele defined his family to encompass his spouse, his living children, and any later-born or adopted children. Elsewhere in the will, Mr. Steele addressed the disposition of his property. He devised to his wife all tangible personal property, the homestead property, and the residue of his estate. If, however, his wife died before him, his children “then living” would inherit his tangible personal property.

Mr. Steele died roughly a year and a half after executing the will. Following Mr. Steele’s death, P.S.S. was conceived by in vitro fertilization using Mr. Steele’s deposited sperm samples.

What does the phrase “provided for” mean?

This case required the Florida supreme court to construe the statutory text of F.S. 742.17(4) to determine if the statue’s use of the phrase “provided for” means the pre-deceased parent’s will (a) simply addressed the possible contingency of a posthumously conceived child or if (b) the statute’s use of this phrase means the child has to actually inherit something under the will.

As I’ve previously noted, we’re living through a “textualist moment” in Florida’s courts, a point our supreme court emphasized once again in this case as follows:

As expressed in our cases involving statutory interpretation, we are committed to the supremacy-of-text principle—that is, “[t]he words of a governing text are of paramount concern” to us, and “what they convey, in their context, is what the text means.” Coates v. R.J. Reynolds Tobacco Co., 365 So. 3d 353, 354 (Fla. 2023) (alteration in original) (quoting Levy v. Levy, 326 So. 3d 678, 681 (Fla. 2021)). In applying this principle, we begin with the text of the statute …

Against this backdrop the court concluded that “provided for” means you have to actually inherit something under the will.

Therefore, based on our analysis above, we conclude that “provided for” in section 742.17(4) means that the testator actually left something to the posthumously conceived child through the will. Or, put another way, the child must have some inheritance right under the will. As part of this requirement, the will must show that the testator contemplated the possibility of a child being conceived following his or her death.

Did the decedent’s will “provide for” his posthumously conceived child? NO

It’s common for wills to address a testator’s then-living children as well as the possible contingency of later born children. Is that kind of generic reference to after-born children enough to encompass a posthumously conceived child? Nope, so saith the court:

No part of the will acknowledges the possibility of children being conceived after Mr. Steele’s death. To be sure, the will references afterborn or adopted children. But that mention of later-born children, as we read Mr. Steele’s will, refers most naturally to children born after his will was drafted but conceived before his death, i.e., when the dispositional portions of the will create vested rights. See § 732.514, Fla. Stat. (2019); see also § 732.106, Fla. Stat. (2019) (defining afterborn heirs in a similar fashion). Thus, this reference to later-born children would not cover P.S.S., who was conceived after Mr. Steele’s death.

But, even if we found that post-death conception was in some generic sense contemplated by Mr. Steele, P.S.S. could not have received anything under the will. Mr. Steele’s will conveyed all relevant property to Ms. Steele. In the event that Ms. Steele had died before Mr. Steele, the tangible personal property would have been distributed to his “then living children.” By its terms, this fallback provision only applied to children living at the time Mr. Steele died and necessarily excluded any posthumously conceived children, like P.S.S. Therefore, as it was impossible for P.S.S. to inherit anything from the will, it is clear that Mr. Steele did not provide for P.S.S. as contemplated by section 742.17(4).

Class gifts and posthumously conceived children

The pressing question raised by this case, and others like it, is how should we draft and construe class-gift clauses in a world that now includes posthumously conceived children. That isn’t a statutory construction question, it’s a drafting and will/trust interpretation question. Here’s how Prof. Pennell framed the class-gift problem as applied to posthumously conceived children in his write up of the Capato case:

If D leaves DNA in the freezer and that DNA is used postmortem with the requisite permission to produce a child, it seems relatively clear that D intended that child to be a beneficiary of D’s estate. But what about relatives of the DNA provider? Assume, for example, that the provider’s ancestor created a trust for the provider’s benefit for life, remainder to the provider’s descendants. Does the settlor intend to give anyone (the provider’s surviving spouse or anyone else) a blank check to create more remainder beneficiaries? That question was answered in the affirmative by In re Martin B. (Sur. Ct. 2007), 841 N.Y.S.2d 207.

The question whether a provider intends for a posthumously conceived child to be treated as their own is easier than the question whether an ancestor intends for someone else to be able to use the DNA to create more beneficiaries of the ancestor’s trust. Indeed, if clients were asked the question, “would you want your daughter-in-law to be able to make herself pregnant with your son’s frozen sperm, to create more beneficiaries of your trust,” would their answers predictably be the same as if they were asked “do you want your son-in-law to be able to withdraw your daughter’s frozen egg (or their frozen embryo) and find a surrogate mother to make more beneficiaries of your trust”? There is likely no way to predict a typical client’s reaction to either question, nor to predict whether any client’s response would distinguish between a daughter-in-law using the son’s sperm and bearing the child herself as opposed to a son-in-law finding a surrogate mother to carry the daughter’s child. . . .

As all this shakes out, it may be wise for estate planners to draft for these issues, to articulate their clients’ intent in each regard. Particularly because state law is in flux, because one-size-fits-all legislation may not reflect a client’s intent, and because conflict of laws issues may inform a court’s reliance on the law of a different state.

Until, as Prof. Pennell puts it, “all this shakes out,” there’s only one way to deliver a semblance of certainty to estate planning clients (as well as giving voice to their personal values): good drafting. When it comes to good drafting, no man’s an island. I don’t care how good you are, it never hurts to read what other thoughtful trusts and estates lawyers are drafting. One such attorney is Bruce Stone, who published a short piece entitled Drafting for Flexibility in Dynasty Trusts in which he provides sample trust language addressing class gifts to posthumously conceived children. Bruce’s clause probably won’t be the last word in drafting for this contingency, but it’s a solid start. Stay tuned for more …

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If you make your living writing wills and trusts, or administering them, or litigating them, you live in a world dominated by words; be they contained in a client’s personal estate planning documents or the public statutes and court opinions governing their application.

And as practitioners we all rely on informal heuristics we’ve picked up along the way for figuring out what those words are supposed to mean when used in a particular context. This pragmatic approach is fine as long as no one’s asking a judge to weigh in. Once the question lands in court, you need to advocate for a particular interpretation, and to do that you’ll want to know something about the “supremacy-of-text principle.” It’s a formalized approach for making sense of legal texts that’s all the rage among Florida’s judiciary, starting at the top with our supreme court and working its way down to every new trial court judge reporting in for his or her first day on the job.

Florida Judicial College on Judicial Interpretation of Statutes and Contracts

All Florida judges new to the bench are required to complete the Florida Judicial College program during their first year of judicial service following selection to the bench. Taught by the state’s most experienced trial and appellate court judges, the College’s curriculum includes a 203-page presentation entitled Judicial Interpretation of Statutes and Contracts. This is basically a handbook for judges applying the supremacy-of-text principle, and it’s a must read for anyone working in today’s Florida court system.

In What the Textualist Revolution in Florida Jurisprudence Means for Practitioners, appellate attorney Nicholas McNamara does a great job of putting this textualist moment in context as well as suggesting related practice pointers. Another must read. Here’s an excerpt:

Justice Kagan famously remarked in 2015 that “we’re all textualists now.”[1] She was speaking about the federal judiciary, where the late Justice Scalia’s brand of textualism has come to dominate. But here in Florida, not only is textualism dominant, it is arguably[2] mandatory for practitioners since the Florida Supreme Court declared its adherence to “the supremacy-of-text principle” in Advisory Opinion to the Governor re: Implementation of Amendment 4, the Voting Restoration Amendment, 288 So. 3d 1070 (Fla. 2020). According to that principle, “[t]he words of a governing text are of paramount concern, and what they convey, in their context, is what the text means.”[3]

This language is quoted from what has become the seminal treatise on textualism: Antonin Scalia and Bryan Garner’s Reading Law: The Interpretation of Legal Texts. It is hardly an exaggeration to say that Reading Law has achieved blackletter status in this state. Indeed, as of February 23 of this year, this work has been cited no less than 171 times by Florida’s appellate courts since its 2012 publication. That being the case, it behooves the Florida practitioner — regardless of his or her opinions on textualism’s merits — to become acquainted with its doctrines and methodologies. This column provides a few practical pointers on advocacy in the current textualist moment.

Against this backdrop McNamara provides the following practice pointers:

  • Do Not Argue What the Legislature Intended; Argue What the Text Means
  • Learn How To Use Dictionaries Properly
  • Acquaint Yourself with Canons of Construction

The best way to put this good advice into practice the next time you find yourself getting ready to argue for a particular interpretation of a word or phrase in a will, trust or statute, is to read the same handbook your judge is reading: Judicial Interpretation of Statutes and Contracts.

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In Florida a couple’s marital property rights are based on the common law’s “separate property” regime. According to the IRS, the “theory underlying common law is that each spouse is a separate individual with separate legal and property rights.”

There’s a competing marital-property-rights regime known as “community property” that, as reported by the IRS, has been adopted by nine U.S. states (including California and Texas, our two most populous states). These nine community-property states have a combined population of over a hundred million people, or about 30% of the entire U.S. population. And that’s not counting Puerto Rico, the largest U.S. territory, which is also a community property jurisdiction.

That’s a lot of people; many of whom are going to retire — and ultimately die — in Florida (the nation’s perennial number one retirement destination). Anytime a married couple moves to Florida from any of these community-property jurisdictions they bring with them all of their testamentary rights in property that was community property prior to their change of domicile (as well as in property substituted therefor). That’s why these property rights matter to Florida probate practitioners.

The theory underlying community property is analogous to that of a partnership. In Commissioner v. Chase Manhattan Bank, the court summarized the origins and basic principles of the community property system in a case originating in Texas (a community-property jurisdiction):

The community property system comes from the custom of the women of the Visigoths and other Germanic tribes sharing the fighting and the spoils of war with their men; it owes its strength to the civilized view that marriage is a full partnership. Husband and wife are equal partners. Each has a present, vested half interest in all community property. All property accumulated during marriage is community property, unless it is received by gift, devise, or inheritance. … Thus, on death or divorce the community is divided equally. Neither spouse has testamentary disposition over the other’s half of the community. The wife has complete testamentary disposition over her half and may leave it even to her paramour.

Why should Florida probate attorneys care about community property rights?

A couple’s pre-existing community-property rights are statutorily preserved when they move to this state by the Florida Uniform Disposition of Community Property Rights at Death Act (“FUDCPRDA”). That’s Florida’s version of the Uniform Disposition of Community Property Rights at Death Act, which was superseded by the new Uniform Community Property Disposition at Death Act (“UCPDDA”).

So does any of this conflicts-of-law theory matter in real life? Oh yeah, just ask the Johnson v. Townsend litigants. As demonstrated in that case, even though these “imported” marital property rights can dramatically reshape the ultimate disposition of a Florida probate estate they’re often overlooked by local practitioners who generally lack the training and experience necessary to spot these non-Florida community-property issues … until it’s too late.

The new Uniform Community Property Disposition at Death Act (UCPDDA)

OK, so as Florida practitioners we can’t ignore the possibility of non-Florida community-property rights upending our Florida probate proceedings. And we know FUDCPRDA is intended to make sure we don’t fall into that trap. But is FUDCPRDA still up to the task? That act’s based on a uniform law promulgated in 1971. That’s over 50 years ago. Nixon was president in 1971. A lot’s changed since then, including the “nonprobate revolution”, which transformed the trusts-and-estates world.

Enter the new and improved UCPDDA, promulgated in 2021. According to the Uniform Law Commission (ULC) we all need to run out and adopt this new uniform act for the following reasons:

  • The UCPDDA protects property rights for married couples. The United States has two different systems of property law. Nine states and two U.S. territories treat all property acquired by a married couple during their marriage as community property – the remaining states do not. The UCPDDA ensures spouses will retain their rights in community property even if they relocate to a non-community property state.
  • The UCPDDA prevents unnecessary litigation. If the legal status of a married couple’s property is unclear at the time the first spouse dies, disputes between potential recipients can arise. The UCPDDA clarifies the status of property with a set of default rules that apply unless the couple made other arrangements in their estate plan. Clear rules lead to fewer disputes and help preserve court resources.
  • The UCPDDA modernizes the law. The increased popularity of nonprobate transfers and the recognition of same-sex marriage have made obsolete many older statutes in non-community property states governing the disposition of community property. The UCPDDA addresses these issues in a manner consistent with modern estate planning practices.
  • The UCPDDA is flexible. Every couple’s situation is different. The UCPDDA allows married couples to make their own plans for property distribution by deferring to valid pre-marital and post-marital agreements between spouses. The UCPDDA’s default rules apply only if the couple has not made their own arrangements.
  • The UCPDDA is more necessary than ever. In our increasingly mobile world, many couples live in multiple states over the course of their marriage. Therefore, these couples will often acquire a mix of community property and non-community property, complicating the distribution to heirs when one spouse dies. The UCPDDA provides clear and effective rules that will prevent distributions of property to persons who are not entitled to receive it.

Florida Uniform Disposition of Community Property Rights at Death Act: Time for an Update?

The ULC pitch sounds reasonable in theory, but does it hold up to the kind of real-world scrutiny required to vet any new uniform act before it’s adopted as law and let loose on the populace? To answer that question we need experienced and thoughtful practitioners who are willing to both volunteer their expertise and engage in the kind of rigorous, intellectual work needed to do that job. Enter Anthony Guettler and Patrick Lannon, two of the smartest estate planners I know.

Anthony and Patrick recently published Florida Uniform Disposition of Community Property Rights at Death Act: Time for an Update? This article is a must read for anyone dealing with a community-property issue, be it as planner or litigator. Why? Because you can’t really understand this body of law without considering why we got to where we are now and how the law is evolving (or should evolve) to meet tomorrow’s challenges. Anthony and Patrick’s article does that. Here’s an excerpt:

Immigration into Florida from other states and countries continues apace, and Florida property continues to be an attractive investment opportunity for outsiders. As attorneys rush to help the recent arrivals and outside investors adjust to our legal landscape, it is a worthwhile effort to consider how Florida law may be modernized and expanded to accommodate the legal baggage that these immigrants and investors bring with them. The need for review and modernization is particularly relevant in the often-overlooked area of marital property rights. …

In 1992, Florida adopted the Florida Uniform Disposition of Community Property Rights at Death Act (“FUDCPRDA”). This Act, which has seen only minor revisions since its passage, offers some much-needed guidance regarding division upon death of community property assets. … In 2021, the National Conference of Commissioners on Uniform State Laws promulgated a new and improved Uniform Community Property Disposition at Death Act (“UCPDDA”). UCPDDA offers an expanded roadmap for treatment of community property and provides guidance on questions, which are currently unclear under Florida law. …

Community property rights will likely never fit comfortably within Florida’s separate property marital property regime, and FUDCPRDA contains only guidance for Florida advisors. UCPDDA offers great insight into ways that Florida law could be expanded and modernized. A thorough review and at least a partial adoption of UCPDDA will likely provide great comfort to Floridians who have immigrated from community property jurisdictions, community property investors, and attorneys advising with respect to community property.

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There are all sorts of reasons for why you may want to litigate your case in federal court. As explained in an excellent blog post by NY commercial litigator Will Newman:

Litigants often prefer federal court for several reasons. Many believe the judges are better. Federal courts also usually have fewer cases and more resources, and so they may handle cases more quickly than state courts. Federal courts may have broader jury pools that span multiple counties than state courts, which may limit their juries to residents of one particular county. And federal courts may be less political than state courts, since federal judges are not elected, are hard to remove from office, and are often not as connected to local political organizations as state judges.

But many litigants prefer state court. They may want a specific jury pool of county residents or a local judge who may be more sympathetic to the case than strangers from further away. Or they may prefer the procedures in state court, which may require the case proceed differently than in federal court. These differences may be a permissive attitude towards delays, an accelerated discovery schedule, or different discovery or disclosure rules altogether. They may also observe differences in how state and federal courts may interpret the same law and prefer the state court’s interpretation.

For trusts and estates litigators the key point is that federal court is a very real possibility for many of our cases if we can overcome two jurisdictional hurdles.

First, you’re not getting your inheritance case adjudicated in federal court if you can’t establish diversity jurisdiction under the special — and distinct — rules applied to trustees and personal representatives. Second, think “probate exception”. You’re not getting your inheritance case adjudicated in federal court if you can’t get past this roadblock to a federal court’s diversity jurisdiction.

What’s the “probate exception” and why should trusts and estates litigators care?

According to the U.S. Supreme Court’s 2006 decision in Marshall v. Marshall the probate exception to a federal court’s diversity jurisdiction applies only if a federal judge is being asked to: (1) probate a will, (2) administer a decedent’s estate, or (3) interfere with property already in the custody of a probate court. Marshall dramatically narrowed the probate-exception bar, opening the door to “federalized” inheritance litigation to an extent previously unimagined. Following Marshall, federal courts have continued to grapple with how narrowly or broadly to interpret the new ground rules, including in the two Florida cases discussed below.

Case Study No. 1

Can you ask a federal judge to administer a guardianship estate? NO

Baker, Donelson v. Chopin, 2022 WL 4090841 (11th Cir. September 07, 2022)

The backstory to this case involves an ugly guardianship battle for control of the care — and vast fortune — of the widow of automobile tycoon Henry Ford II. The widow’s daughter ultimately lost that guardianship case and appealed. All of this played out in Florida’s state court system.

While the guardianship-case appeal was pending the daughter filed a request with the guardianship court for a formal determination of entitlement to fees and costs for her counsel. F.S. 744.108 tells us this kind of a fee determination is “part of the guardianship administration process.”

The guardianship court stayed consideration of daughter’s fee request until the conclusion of the pending appeal. While that appeal was pending the widow died. Widow’s daughter then sued the estate in federal court seeking a ruling on her pending claim for guardianship fees. The estate sought to have the case dismissed on the grounds that this kind of fee claim was part of the guardianship administration process, which triggers the probate exception to the court’s federal diversity jurisdiction. At the hearing the federal trial judge observed he was being asked to step into the guardianship court’s shoes.

But for me to even know what amount is appropriate, I would essentially be doing the work of the probate court or the guardianship court in surveying all of the work that was done over the lengthy trial, et cetera.

Against this backdrop it probably surprised no one when the federal trial judge dismissed the case. Did the trial judge get this one right? Yup, so saith the 11th Circuit:

We conclude that the instant case falls within the probate exception. We conclude that determination of Baker Donelson’s claim for attorney’s fees is part of the guardianship administration process, and therefore falls within the second category of cases which the case law indicates is subject to the probate exception—i.e. cases in which the federal court is called upon “to administer an estate.” Florida Statute section 744.108(8) expressly provides “When court proceedings are instituted to review or determine a guardian’s or an attorney’s fees under subsection (2), such proceedings are part of the guardianship administration process.” Moreover, sections 744.108(1) and (2) clearly contemplate that the court which should determine entitlement to attorney’s fees and the amount thereof is the court which appointed the guardian—that is Probate Judge Suskauer in this case. This only makes common sense. …

Moreover, the Florida law contemplates that entitlement to attorney’s fees and the amount thereof should take into account the benefit to the ward provided by the services. Zepeda v. Klein, 698 So.2d 329, 330 (Fla. 4th DCA 1997). The guardianship court actually administering the estate is clearly the most appropriate court to evaluate the benefit to the ward resulting from the attorney’s services—i.e. to continue to handle this part of the administration of the estate.

Case Study No. 2

Can you ask a federal judge to adjudicate a creditor claim v. a probate estate? YES

Moore & Co., P.A. v. Kallop, 17-CV-24181-DPG, 2020 WL 4505645 (S.D. Fla. Aug. 5, 2020)

This case involved another attorney’s fee claim asserted against a probate estate, but this time the case turned on an alleged breach of contract. There’s nothing about a breach-of-contract claim that would involve a federal judge in the administration of an estate. However, at the end of that kind of case the plaintiff could be awarded a judgment against the estate’s assets (converting the plaintiff into a “creditor” of the estate). Does that count as “administering” an estate? Usually not, here’s why:

[F]ederal courts have the authority to “entertain suits to determine the rights of creditors, legatees, heirs, and other claimants against a decedent’s estate, ‘so long as the federal court does not interfere with the probate proceedings.’ ” Marshall, 547 U.S. at 310–11 (emphasis in original) (quoting Markham v. Allen, 326 U.S. 490, 494 (1946)). The Eleventh Circuit describes the scope of the probate exception as follows:

[A] creditor may obtain a federal judgment that he has a valid claim against the estate for one thousand dollars, or a devisee may obtain a declaratory judgment that a probated will entitles him to twenty percent of the net estate. What the federal court may not do, however, is to order payment of the creditor’s thousand dollars, because that would be an assumption of control over property under probate.

Stuart, 757 F. App’x at 809 (quoting Turton v. Turton, 644 F.2d 344, 347 (5th Cir. 1981)).

OK, so most creditor claims don’t trigger the probate exception because they don’t require a federal court to involve itself in the internal workings of the estate-administration process. Once your federal case is completed the best you can hope for is a judgment against the estate. After that it’s up to the probate judge to decide if and when that judgement is ever satisfied with assets of the estate. So is that what happened here? Yup, probate exception wasn’t triggered, so saith the court:

The Court does not find that the probate exception bars it from exercising jurisdiction over this case. While the resolution of this action in Plaintiff’s favor might result in a judgment against Decedent’s estate, “[t]he probate exception does not foreclose a creditor from obtaining a federal judgment that the creditor has a valid claim against the estate for a certain amount.” Mich. Tech. Fund, 680 F.2d at 740. Plaintiff claims that it is owed money for legal services rendered before Decedent’s death. Should Plaintiff prevail on its claims, it would stand as a creditor of the estate. Plaintiff would then, like any other creditor, submit its judgment to the Probate Court. Accordingly, Defendant’s motion to dismiss on the basis of the probate exception is denied.

Interpleader and federal jurisdiction: A more welcoming door to federal court

The two cases discussed above both dealt with existing estate proceedings, one a guardianship estate and the other a probate estate. This is familiar territory for most trusts and estates litigators. Perhaps not surprisingly, these estate cases receive most of our attention. That focus is outdated.

Today, life insurance and other beneficiary-designated non-probate assets such as annuities, pay-on-death accounts, and retirement planning accounts have become the dominant testamentary transfer mechanism for most middle class families (trusts remain favored by the wealthy). As reported in A Fair Presumption: Why Florida Needs a Divorce Revocation Statute for Beneficiary-Designated Nonprobate Assets:

Life insurance and other nonprobate assets such as annuities, pay-on-death accounts, and retirement planning accounts have become increasingly popular as estate planning tools. In 2004, Americans purchased $3.1 trillion in new life insurance coverage, a ten percent increase from just ten years before. Purchases made by Floridians accounted for nearly $154 million of this national total. At the end of 2004, there was $17.5 trillion in life insurance policy coverage in the United States.

So it’s not surprising that trusts and estates litigators are often involved in inheritance cases revolving entirely around life insurance proceeds and other non-probate assets having nothing to do with a contested estate. These non-probate cases often play out as interpleader actions, and usually in federal court. That’s not by accident.

The doors to federal court are especially welcoming for these cases under 28 U.S.C. § 1335, a special-purpose federal interpleader statute making it easier to invoke federal jurisdiction than in a typical diversity jurisdiction case. As explained in Interpleader and federal jurisdiction: A more welcoming door to federal court:

Many federal civil litigators are familiar with interpleader under Rule 22 of the Federal Rules of Civil Procedure, but the interpleader statute, 28 U.S.C. § 1335, exists independent of Rule 22. … [The interpleader statute] provides its own basis for federal jurisdiction. Rule 22 does not confer jurisdiction, and a party that uses Rule 22 interpleader still needs to establish jurisdiction on some other basis — usually diversity under 28 U.S.C. § 1332(a). But the interpleader statute provides jurisdiction and venue requirements that are more liberal than the familiar diversity jurisdiction statute: The amount-in-controversy requirement is only $500 rather than $75,000, and it requires only “minimal diversity” — meaning that there are at least two adverse claimants in the suit that are not citizens of the same state — rather than the familiar “complete diversity” requirement under 28 U.S.C. § 1332(a).

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If you’re going to sue a decedent’s probate estate, the first question you’ll need to ask yourself is if your lawsuit is going to be subject to Florida’s ultra-short limitations periods for probate creditor claims. And to answer that question you’ll need to figure out if the relief you’re seeking falls under the broad statutory definition for probate creditor “claims” found in F.S. 731.201(4), which provides as follows:

“Claim” means a liability of the decedent, whether arising in contract, tort, or otherwise, and funeral expense. The term does not include an expense of administration or estate, inheritance, succession, or other death taxes.

When you’re reading this definition it’s important to note the type of claims that are categorically excluded. In other words, if you’re suing the estate to recover “an expense of administration” or if you’re suing the estate to recover unpaid “estate, inheritance, succession, or other death taxes,” you’re not litigating a Florida probate creditor claim.

Are real property title disputes probate creditor “claims”? YES

But what if you’re suing the estate to dispute ownership of real property titled in a decedent’s name? Is that a probate creditor “claim”? If Florida had adopted the Uniform Probate Code’s definition of “claim” the answer would be simple: it’s not a creditor claim because all title disputes are categorically excluded from the definition of “claim” found in UPC sect. 1-201(6), which provides in relevant part as follows:

“Claims,” in respect to estates of decedents and protected persons, includes liabilities of the decedent or protected person, whether arising in contract, in tort, or otherwise … The term does not include … demands or disputes regarding title of a decedent … to specific assets alleged to be included in the estate.

Since Florida’s definition of “claim” is silent on the issue of real property title disputes you might be tempted to argue they’re not included in the definition and therefore your lawsuit isn’t subject to the creditor-claim filing deadlines. And you’d be wrong.

Case Study

Ford v. In Re Estate of Ford, — So.3d —-, 2023 WL 5249664 (Fla. 3d DCA August 16, 2023)

In this case the claimant filed a statement of claim against the estate disputing, on equitable grounds, ownership of four items of real property titled in the decedent’s name. The probate court denied the claim finding “that the relief sought by Mr. Ford is not a probate claim against the Estate.” Wrong answer; real property title disputes are creditor claims. So saith the 3d DCA:

[T]he probate court found that the relief sought by Billy was not a probate claim against the estate. The statement of claim provides that Billy sought the “return of the properties via equitable relief.” On appeal, Billy cites to Arwood v. Sloan, 560 So. 2d 1251 (Fla. 3rd DCA 1990), for the proposition that probate claims can involve issues of disputed ownership in real property. In Arwood, “Plaintiff filed a claim against Decedent’s probate estate, claiming that the real property, funds in the bank, and other assets in Decedent’s name, were his sole property, and that title to the same had been placed in Decedent’s name for his convenience.” Id. at 1251. Billy also cites to Sanchez v. Sanchez De Davila, 547 So. 2d 943 (Fla. 3rd DCA 1989), in which the parties claimed injunctive relief to enjoin distribution of funds. Id. at 944. The probate claim involved the question of ownership of approximately $2,000,000 held in trust bank accounts. Id. We therefore find that the trial court erred as Billy’s claim for equitable relief involving the disputed ownership of the four real properties is not outside the purview of probate claims.

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Florida’s new Community Property Trust Act is the subject of two excellent Florida Bar Journal articles by Orlando attorney Joseph Percopo (see here and here). But nothing quite beats an insider’s view on new legislation from the person primarily responsible for its development and passage, which in this case is Naples attorney Travis Hayes.

And it’s against that backdrop that I had the good fortune to attend the recent ATO conference where Travis shared his unique insights for estate planners considering this new tool. I was so impressed with Travis’ thoughtful explanations, practical advice, and sample trust clauses (always gold for practitioners), that I asked if I could help spread the word by posting his written materials on the blog. Being the good guy that he is, Travis graciously agreed.

Here’s an excerpt from Travis’ presentation entitled To Share and Share Alike: an Examination of the Treatment of Community Property in Florida and the new Florida Community Property Trust Act, which I highly recommend.

A vastly increasing amount of married couples are moving to the State of Florida to take up residency. Due to the high growth in the number of people moving to Florida, the state’s population surpassed 20 million in 2015, and the state is adding over 1,000 people per day. And those statistics are from the pre-COVID population boom in Florida! In today’s ever-increasing mobile society, many of these couples may have come to Florida from a community property jurisdiction or may have acquired property in a community property jurisdiction at some point during their marriage.

With the increased emphasis on income tax planning caused by the higher estate and gift tax exemptions, as well as portability, many practitioners are revisiting the issue of “stepped-up” basis, which has favored joint owners who live in community property states. Passage of the Patient Protection and Affordable Care Act of 2010, the American Tax Payer Relief Act of 2012, and the Tax Cuts and Jobs Act of 2017 have made income tax planning, specifically with respect to capital gains, an issue to be brought to the forefront of any estate planning strategy, regardless of net worth. It has therefore become even more important for attorneys in Florida to be able to identify and determine the community property status of Florida couples’ assets, and to examine the treatment of community property for Florida residents under Florida law.

Florida has also now taken the monumental step of enacting legislation which will permit the creation of community property trusts in our state. This is a very significant development in the treatment of community property under Florida law. Every trusts and estates practitioner in Florida should be familiar with the provisions of the Florida Community Property Trust Act, what type of clients would benefit from the implementation and usage of Florida Community Property Trusts, and the situations in which Florida Community Property Trusts should be recommended and considered. If you want to dive right into the Florida Community Property Trust Act, the discussion of the Act is contained in Section VI of this outline. But first off, the outline contains a detailed discussion of community property and its current treatment under Florida law, as it is important to have a working knowledge of those subjects if you want to become a Florida Community Property Trust expert!

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As reported in A jury rules a handwritten will found under Aretha Franklin’s couch cushion is valid:

A jury in Michigan has ruled that a [2014] note handwritten by the late soul singer Aretha Franklin is valid as her will, according to The Associated Press. In 2019, Franklin’s niece found three handwritten documents around the singer’s home in suburban Detroit. One, dated 2014, was found underneath a couch cushion. Two of Franklin’s sons, Kecalf and Edward Franklin, argued through their lawyers that they wanted the latter note to override a separate will written in 2010.

This litigation would have never happened in Florida

Why? Because neither handwritten document was attested to by two witnesses. Some jurisdictions, including Michigan, will accept un-witnessed wills if they’re handwritten (holographic). Not Florida. If Aretha Franklin had died a resident of this state both un-witnessed wills would have been automatically rejected as a matter of law. She would have died intestate, which means her children would have split her estate equally by default.

This case is a prime example of the benefits of “channeling”

Most of us would be hard pressed to look at Ms. Franklin’s handwritten 2010 “will” or her handwritten 2014 “will”, both of which are barely legible — with crossed-out words and scribblings in the margins — and say with certainty, yeah, that’s a will. Fortunately, we rarely (if ever) have that problem in Florida. Why? Think: channeling.

One of the benefits of requiring execution formalities to be scrupulously complied with for a will to be legally enforced in Florida — such as the two-attesting-witnesses requirement of F.S. 732.502(1) — is that these requirements have the side effect of standardizing what most Florida wills look like. As a result, Florida wills are generally going to follow a standard format that’s easily identifiable.

Academics call this “channeling.” Here’s how the channeling effect is described in Wills Formalities in the Twenty-First Century:

The statutory requirements for formal wills serve useful ends. They take the vast array of testamentary things and channel them into a form that is readily recognizable as a will, thus easing the transfer of property at death. By imposing a standard form on testamentary writings, they enable probate courts to identify documents as wills solely on the basis of readily ascertainable formal criteria, thereby permitting probate to proceed in the vast majority of cases as a routine, bureaucratic process.

Because wills in Florida have to follow strict execution formalities and be attested by two witnesses, most are going to follow a standard format that’s easily identifiable. And that means you’re not going to find yourself pondering whether mom’s barely legible hand written notes with crossed-out words and scribblings in the margins that she hid under the sofa cushions years before she died is her will — which is basically what happened in the Aretha Franklin case.

Was the family acrimony caused by this will contest worth it?

The primary economic difference between the two competing wills appears to be who gets Ms. Franklin’s main home in Bloomfield Hills, valued at $1.1 million when she died. But both wills apparently equally split the estate’s music catalog. And that’s where almost all of the value of this estate lies. According to celebritynetworth.com:

Aretha’s royalty income in the years after her death has been $3-4 million per year. The value of her catalog and royalty income would likely push her actual net worth at death closer to $50 – $80 million.

A $1.1 million house is a rounding error compared to a $50 – $80 million music catalog. If the value of the catalog is split equally among the brothers under both wills, was a family fight over the house — with all the stress and acrimony that accompanies any will contest — really worth it?

By the way, if Ms. Franklin’s estate generates the royalty income that’s currently estimated she’ll be typical for artists of her stature — many of whom generate huge sums of wealth long after they’ve died, as gleefully reported by Forbes in its annual list of the highest paid dead celebrities. Here’s an excerpt from its 2022 list, as reported in The Highest-Paid Dead Celebrities Of 2022—A Writer Earns Half-A-Billion From The Great Beyond:

Seems not even the boneyard is immune from inflation. The 13 departed artists, athletes and entertainers on this year’s list of the top-earning dead celebrities earned a record $1.6 billion, making it a 72% increase over last year’s total. It’s by far the biggest 12-month haul since we started tracking graveyard earnings in 2001 – and, for the first time ever, the top five made more than $100 million each. …

Overall, the music of yesteryear is seen by investors as a reliable income stream. Nearly $700 million of the $1.6 billion in total earnings came from the estates of the nine musicians on the list, including David Bowie ($250 million), Michael Jackson ($75 million) and “Hallelujah” songwriter Leonard Cohen ($55 million). Some of those earnings came from one-time sales. The estate of Toto drummer Jeff Porcaro, for instance, sold his publishing and recording royalties for $25 million in November 2021. Others, like Beatles John Lennon and George Harrison remain mainstays on the list due to their annual recurring royalty streams.

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Heirs property generally refers to family-owned property inherited by multiple generations without formal legal proceedings, resulting in a lack of clear title proving ownership. As explained in a 2018 Florida Bar Journal article entitled The Disproportionate Impact of Heirs Property in Florida’s Low-Income Communities of Color, these arrangements can lead to all sorts of negative consequences for family wealth creation. In response, in 2020 Florida adopted the Uniform Partition of Heirs Property Act (F.S. Ch. 64, Part II), which was hailed by housing advocates as an important and necessary step in closing the “racial wealth gap.”

Following that legislative reform the challenges faced by families with heirs property continues to garner much needed attention, including from national corporate actors like Wells Fargo. As recently reported by the Miami Herald in Heirs to Black-owned homes face ramped-up foreclosures. Here’s who’s pushing back:

In April, Legal Services of Greater Miami received a $600,000 grant from the Wells Fargo Foundation, which will partly be used to brief Miami-Dade residents about the issue and provide free legal assistance to heirs’ property owners in untangling titles, building on the organization’s work so far in Liberty City funded by Bank United.

Legal Services has fielded approximately 30 requests for help with potential heirs’ property matters.

“At a time like now, where affordable housing is becoming scarcer and scarcer, keeping a family home that you’ve had for decades is perhaps one of the most affordable ways to stay housed,” said the organization’s advocacy director, Lisa Lauck.

What’s the fix? Think Lady Bird Deeds

One of the primary causes of heirs property is a lack of basic estate planning. So not surprisingly, there’s a big push to get more property owners to engage in that kind of planning. For example, under the USDA’s loan program designed especially for heirs property you can’t qualify for one of these farm loans unless you first complete a “succession plan”.

The most commonly suggested solution for this lack of planning is a will. That may work if you’re focusing on farms and ranches but it’s clearly not the best option for the vast majority of Floridians, whose most common form of heirs property is going to be a single family home. All of the heirs-property examples reported on in the Miami Herald article involved single family homes. Most (probably all) of these families would be better served by “Lady Bird Deeds”.

Lady Bird Deeds (also referred to as “enhanced life estate deeds”) are ideally suited for the single most valuable asset most people own when they die: their home. Why? Because these deeds offer a simple, inexpensive way to transfer real estate at death without the costs and delays of probate (vs. a will, which has no legal effect unless it’s probated). And in another contrast to wills, Lady Bird Deeds should be publicly recorded as soon as they’re signed (there’s no mechanism in Florida for publicly recording wills prior to the testator’s death). So there’s no risk of the deed getting lost or misappropriated years later. (A lost will is an invitation for litigation.)

If you’re a practitioner and want to dive into the weeds on the technicalities of these deeds, a good starting place is Lady Bird Deed: An Inexpensive Probate Avoidance Technique. And if you’re looking for a plain English summary of why these deeds are so popular as well as a chart showing the differences between Lady Bird Deeds and traditional life estate deeds, look no further than Giving the Bird. Lady-Bird Deeds:

And last but not least, thank you to Orlando real estate attorney Norman W. Nash, who reminded me of another great resource for practitioners preparing (or even just considering) lady bird deeds. It’s the Florida Uniform Title Standards published by the Real Property, Probate, and Trust Law Section of the Florida Bar. The following three title standards address lady bird deeds directly:

For more on the backstory to these title standards you’ll want to read Enhanced Life Estates Are Now Standard Practice. Here’s an excerpt:

The issue, as noted in the comments to all of the uniform title standards to be discussed in this article, is, “although Lady Bird Deeds are used prevalently in Florida for various purposes, there is no Florida Statute governing such conveyances and scant judicial authority supporting the practice.” Recognizing the lack of authority available, last year the Uniform Title Standards Committee of the Real Property, Probate and Trust Law Section of The Florida Bar approved three new title standards regarding enhanced life estates to “represent the consensus view of the Real Property, Probate, and Trust Law Section of The Florida Bar.” Each uniform title standard contains the title standard, examples of hypothetical fact patterns illustrating the application of the title standard, and commentary about the title standard.

Rohan Kelley doesn’t use Lady Bird Deeds

Rohan Kelley is Florida’s leading thought leader on all things homestead and author of the famous Kelley’s Homestead Paradigm. So when Rohan says he’s not a fan of Lady Bird Deeds, we all need to stop and listen. With Rohan’s permission I’ve quoted below an email he was kind enough to send me in response to this blog post. Here’s the bottom line for Rohan:

The clear intent of an enhanced life estate deed is as a will substitute.  At least to the extent the property is protected homestead, it simply doesn’t work even though the use of this will substitute nearly always involves homestead.

Rohan’s point is well taken … as far as it goes. If the subject property is your personal residence it’s also going to be “homestead” property that’s subject to the restrictions on devise contained in Article X, §4(c) of Florida’s constitution. And if you’re survived by a spouse or minor child and you invalidly devise your homestead property — be it by Will or Lady Bird Deed — that devise is going to fail. For an example of a failed devise of homestead property via a Lady Bird Deed, see Problem 2 of Florida Bar Title Standard 6.12.

On the other hand, if you’re not survived by a spouse or minor child or if you otherwise validly devise your homestead property — be it by Will or Lady Bird Deed — that devise is going to work. For multiple examples of successful devises of homestead property via a Lady Bird Deed, see Problems 1, 3 and 4 of Florida Bar Title Standard 6.12.

And that’s my point. If a devise of homestead property is subject to the same restrictions be it by Will or Lady Bird Deed, why not default in favor of the self-executing probate-avoidance benefits of a Lady Bird Deed? For example, in both family stories reported on in the Miami Herald article a devise of the subject homestead property via a Lady Bird Deed would have worked without the costs and delays of probate (vs. a will, which has no legal effect unless it’s probated).

But I’ve been doing this lawyering thing long enough to fully concede I could be wrong. Here’s the full text of Rohan’s thoughtful and scholarly comment (which I highly recommend):

I don’t use lady bird deeds because I’m concerned that they might be subject to challenge in some circumstances, especially if enough money were involved.  There is only one case in Florida that discussed what has become known as an enhanced life estate deed, Oglesby v. Lee, 73 Fla. 39, 73 So. 840 (Fla 1917).

The “remainder” interest created is an unvested interest, not as argued by some that it is a vested remainder subject to divestment.

In Oglesby, in dictum, the court stated “That such conveyance was in effect a will . . . .” (At page 41.)  The other fact in Oglesby that makes it inapplicable to the modern use of a lady bird deed is the fact that “[Grantor, who was also the remainderman’s father] was appointed guardian of [remainderman], then a minor, ‘to protect and preserve the consideration received from J. W. Oglesby for the land.’” Another relevant fact that distinguishes Oglesby is “. . . said land is wild, unimproved, and unoccupied except such occupancy as that of cutting timber therefrom.”  Hence it was not protected homestead.

This case has never been cited by any other Florida case.

Only one other Florida case involved an enhanced life estate.  Agee v. Brown, 73 So.3d 882 (Fla 4th DCA 2011). That case involved the issue of whether a lawyer who prepared an earlier will for a client that included himself and his wife as beneficiaries, and was alternate personal representative of the earlier will, was an interested person who could challenge the later will.   Judge Speiser held that because the lawyer was presumed to have exerted undue influence thereby rendering the will he prepared void, he had no interests under which he could contest the later will.  The 4th DCA reversed.  However, the validity or effect of the enhanced life estate was not an issue in the case.

The other consideration is Title Standard 6.12 Problem 2, that states:

STANDARD 6.12

ENHANCED LIFE ESTATE: REMAINDERMAN AND HOMESTEAD PROPERTY STANDARD: THE REMAINDERMAN IN HOMESTEAD PROPERTY, WHEREIN THE LIFE TENANT RESERVED THE POWER TO SELL, CONVEY MORTGAGE AND OTHERWISE MANAGE THE FEE SIMPLE ESTATE, ACQUIRES FEE SIMPLE TITLE UPON THE DEATH OF THE LIFE TENANT ONLY WHEN NOT IN VIOLATION OF CONSTITUTIONAL RESTRICTION ON DEVISE OF HOMESTEAD.

Problem 1: A remainder in Blackacre was conveyed by John Doe, a single man, to Jane Smith with John Doe reserving for himself without any liability for waste, full power and authority in himself to sell convey, mortgage or otherwise manage and dispose of the property in fee simple with or without consideration, without joinder of the remainderman, and full power and authority to retain any and all proceeds generated by such action. John Doe died without a spouse or a minor child. Upon the death of John Doe, is fee simple title vested in Jane Smith? Answer: Yes.

Problem 2: Same facts as in Problem 1, except that John Doe died while married to Sally Brown. Upon the death of John Doe, is fee simple title vested in Jane Smith? Answer: No.

According to the Title Standard, an enhanced life estate deed doesn’t work where the grantor is survived by a spouse of minor child.  See Art. X s. 4(c) Fla. Const.

You will recall the case In re Johnson’s Estate, 397 So.2d 970 (4th DCA 1981):

“By retention of the complete control of the property with the absolute right to revoke [the enhanced life estate deed], it is apparent that the testator intended to circumvent the constitutional restriction on testamentary disposition of the homestead while at the same time treating the property as his own during his lifetime. Any statutory basis for permitting said transaction would abrogate the constitutional protection accorded to a homestead as provided in Article X, Section 4 of the Constitution of the State of Florida, which must prevail over any statutory enactment.” (At page 971) (“enhanced life estate deed” substituted for “trust instrument”)

“That which the law forbids to be done directly cannot lawfully be done by indirection.  If an attempted conveyance of homestead real estate is in legal and practical effect and operation a will, it may not be effective when the owner of the homestead leaves a wife or child.” (At page 972)

The clear intent of an enhanced life estate deed is as a will substitute.  At least to the extent the property is protected homestead, it simply doesn’t work even though the use of this will substitute nearly always involves homestead.

In summary, what we have in widespread use by Florida lawyers is an untested device that is widely misused.  The justification for why it is used is because everybody uses it.  What if everybody is wrong?

I subsequently asked Rohan for clarification based on my thoughts above, and he kindly agreed. Rohan’s point is that there is a lack of clear legal authority for these deeds, especially as applied to homestead property. Statutory authority explicitly validating these deeds would clear up any doubt on that front, as advocated in Transfer on Death Deeds: It Is Time to Establish the Rules of the Game. In the absence of explicit statutory authority the best we have are the Florida Bar’s title standards listed above (6.10, 6.11, and 6.12), all of which confirm the validity of Lady Bird Deeds. Against this backdrop here’s the full text of Rohan’s follow up comment, which I again highly recommend:

Your point is if decedent’s homestead is not protected homestead (as defined in s. 731.201(33), why not use a lady bird deed. It would appear from the Title Standards that is an acceptable procedure.

I believe Jerry Solkoff, Esq. is generally credited with having “invented” the lady bird deed, similar to Norman Dacey having “invented” the revocable living trust.

My concern with the validity of a lady bird deed, whether or not involving unprotected homestead, is two-fold.

First, as I alluded in my earlier e-mail, only one Florida case has ever involved the procedure known as an enhanced life estate deed and the facts were significantly different from the ordinary usage of that procedure. What has evolved is literally hundreds of thousands of documents involving real estate probably worth many billions of dollars that has no basis in Florida case law or statutes.

My usual reaction to a lawyer who makes a statement regarding existing law is to ask “what is your authority” and the answer in this instance is “none.”

My second concern relates to the fact that such a deed is a “will substitute.” 736.0403(2)(b) fla.Stat. provides in part:

“The testamentary aspects of a revocable trust, executed by a settlor who is a domiciliary of this state at the time of execution, are invalid unless the trust instrument is executed by the settlor with the formalities required for the execution of a will in this state.”

If I walks like a will and quacks like a will, it must conform to the statute of wills. The formalities for execution are different for execution of a will than they are for execution of a deed. Compare 732.502 Fla.Stat with 689.01 Fla.Stat.

Hence, in my opinion, it is uncertain whether an enhanced life estate deed “works” even for non-homestead real property. You might say “Well, just execute lady bird deeds with the formalities required for the execution of a will in this state.” There seems a lot of uncertainty there as well. Can a document that professes to be and states that it is a deed, then be construed as a will, regardless of the formalities of its execution.

My view is that there are just too many uncertainties with an enhanced life estate deed to make it a viable option.

If I’m preparing a document for a client that I’m not sure is valid to accomplish its intended purpose, as a lawyer I think I have the professional responsibility to so advise the client. I am certain that NEVER happens.

I’m certain that I stand among less than 1% of lawyers on this point.

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F.S. 46.021 tells us that “[n]o cause of action dies with the person. All causes of action survive and may be commenced, prosecuted, and defended [against the decedent’s estate].” However, how you go about prosecuting a case — and the length of time you have to file your lawsuit — changes dramatically after someone dies.

Before someone dies you usually only have to sue them in one courtroom and worry about one set of statute-of-limitations periods. After they’ve died you’ll now have to sue them in at least two separate court proceedings and worry about two distinct sets of statute-of-limitations periods: (a) whatever limitations period applies to your civil case under F.S. Ch. 95, and (b) the second set of ultra-short limitations periods applicable in probate proceedings under F.S. 733.702 and F.S. 733.710. Litigants who forget this dual-track gauntlet for cases involving deceased defendants do so at their peril.

Florida’s layered approach for probate limitations periods, and the dangers of the “unknown unknown”

You might ask yourself why we need two different limitations periods for probate proceedings. Answer: sections 733.702 and 733.710 serve two very different functions.

733.702 is a typical statute of limitations that gets triggered after a probate proceeding is actually commenced, and under 733.702(3) it can be extended “upon grounds of fraud, estoppel, or insufficient notice of the claims period.” Key point: no probate proceeding = no application of 733.702.

733.710 establishes a maximum two year filing deadline following a decedent’s death for all unsecured claims (e.g., all tort claims), regardless of whether or not a probate proceeding’s ever commenced, and it isn’t subject to extension on any of the equitable grounds applying to 733.702. Key point: no probate proceeding = 2-year filing deadline. (In fact, one very effective defensive maneuver is to simply wait two years before opening the probate proceeding, thereby automatically barring all unsecured creditor claims).

This kind of absolute filing deadline’s referred to as a “statute of repose” or “non-claim statute”. Because 733.710 applies even if there’s no probate proceeding (and thus no notice), it’s a classic example of the kind of “unknown unknown” that keeps litigators up at night. No matter how meritorious and just your cause might be, this non-claim statute could get your case tossed out of court. And because this limitations period’s buried deep in our probate code, your average civil litigator could be forgiven for never even knowing it exists. Yup, that’s a big unknown unknown.

Are casualty insurance claims exempt from 733.702? YES

Consider this common scenario: you’re driving a delivery truck and you harm someone in an accident because of your negligence. Usually, your casualty insurance policy will step in to compensate the person injured by your negligence. In other words, this insurance money goes to the victim, not the negligent driver or the negligent driver’s estate.

If an injured victim is suing the estate of the deceased negligent driver only to trigger his casualty insurance coverage, that lawsuit shouldn’t have an impact on the estate because you’re not going after any assets of the estate (the insurance money’s going to the victim not the estate). Against this backdrop 733.702(4)(b) tells us plaintiffs aren’t subject to the statute of limitations for probate claims if you’re only suing the decedent’s estate “to establish liability that is protected by the [decedent’s] casualty insurance,” and if your claim is limited exclusively to “the limits of [the decedent’s] casualty insurance protection only.”

Florida supreme court decides split among appellate courts

The question then becomes, are these same casualty insurance claims also exempt from 733.710, our two-year non-claim statute? There are all sorts of good reasons for why the answer to that question might be yes. And our appellate courts have split on the issue, some extending the exemption for casualty-insurance claims to 733.710, others not. Florida’s supreme court has now stepped in to resolve that split, ruling that casualty insurance claims are not exempt from 733.710. If you’re a probate attorney, this is a big deal.

Case Study

Tsuji v. Fleet, — So.3d —-, 2023 WL 4246120 (Fla. June 29, 2023)

This case involved a truck driver who injured two people in a car accident while he was on the job. The driver died a few weeks after the accident for reasons unrelated to the accident. According to the supreme court, more than three years later the victims sued the driver “for negligently operating the car,” and sued his employer “for vicarious liability under the doctrines of respondeat superior and dangerous instrumentality.” When the plaintiffs found out the driver had died they substituted in the driver’s estate and “reduced their request for damages against the estate to the limits of [the decedent’s] casualty insurance coverage.”

Are casualty insurance claims exempt from 733.710? NO

Again, there are all sorts of good reasons for why we have a line of appellate authority exempting these claims from our two-year non-claim statute. On the other hand, the statute itself is clear. F.S. 733.702(5) tells us: “Nothing in [section 733.702] shall extend the limitations period set forth in s. 733.710.” And does anything in 733.710 exempt these claims? Nope, so saith the Florida supreme court:

There are only two exceptions to this statute of repose or nonclaim. Subsection (2) provides that section 733.710(1) “shall not apply to a creditor who has filed a claim pursuant to s. 733.702 within 2 years after the person’s death, and whose claim has not been paid or otherwise disposed of pursuant to s. 733.705.” § 733.710(2), Fla. Stat. And subsection (3) provides that section 733.710(1) “shall not affect the lien of any duly recorded mortgage or security interest or the lien of any person in possession of personal property or the right to foreclose and enforce the mortgage or lien.” § 733.710(3), Fla. Stat. Neither of these exceptions addresses casualty insurance.

When no exception applies, an untimely claim is “automatically barred.” Barnett Bank of Palm Beach Cnty. v. Estate of Read, 493 So. 2d 447, 448 (Fla. 1986). Section 733.710(1) is in that sense “a self-executing, absolute immunity to claims filed for the first time … more than 2 years after the death of the person whose estate is undergoing probate.” May, 771 So. 2d at 1156 (quoting Comerica, 673 So. 2d at 167).

If you’re a plaintiff and your plan is to sue an estate for one reason only — to trigger casualty insurance coverage — you’ll want to file your lawsuit before the more forgiving deadline under 733.702 is triggered. But if you blow that deadline, 733.702(4)(b) says you might get a pass under certain circumstances. But 733.710 tells us that pass only lasts for two years after the decedent’s death. Once that date rolls around you need to have filed your lawsuit (even if that means you open the probate proceeding just so you can sue the estate) or it’s game over — so saith the Florida supreme court.

Does this change really matter? Maybe not

Thank you to Naples probate attorney extraordinaire Laird Lile who pointed out to me that the court’s decision in Tsuji may not have the impact it once would have. Why? Because effective March 24, 2023, the statutory limitations period for all general negligence claims is cut in half from four years to two years under F.S. 95.11(4), which tracks the two-year statute of repose for probate claims under F.S. 733.710.

The negligence claim filed in Tsuji would have been subject to the new two-year limitations period if it had accrued after March 24, 2023, mooting the question of whether the two-year statute of repose for probate claims under F.S. 733.710 also applied. If your case is time barred under either statute, it doesn’t matter.

Here’s an excerpt from a Jimerson Birr blog post reporting on the new shorter limitations period for negligence claims:

For decades prior to the recent tort reform, the statute of limitations on negligence causes of action in Florida had been four years from when the cause of action accrued.  However, effective March 24, 2023, Fla. Stat. § 95.11, was amended to reduce the statute of limitations for negligence claims from four years down to only two years.  Fla. Stat. § 95.11(4)(a) (2023).  This generally means that a plaintiff that fails to file a lawsuit for negligence within two years of when the cause of action accrues, rather than four years, will be barred from bringing the suit under the new statute of limitations.

What Claims Does This Change Effect?

The change of the statute of limitations from four years to two years applies to general negligence claims.  General negligence claims encompass the vast majority of personal injury claims due to negligence, including by automobile accidents, slip and fall, etc., and also includes negligence claims for property damage.

However, the new shorter statute of limitations only applies to negligence claims which accrue after the effective date of the new statute, which is March 24, 2023. See H.B. 837 (“The amendments made by this act to s. 95.11, Florida Statutes, apply to causes of action accruing after the effective date of this act.”). “A cause of action accrues when the last element constituting the cause of action occurs.” Fla. Stat. § 95.031(1). A negligence cause of action generally accrues when the plaintiff is injured or suffers damages due to the act or omission of the defendant. See Dep’t of Transp. v. Soldovere, 519 So.2d 616 (Fla. 1988) (“A cause of action for the negligence of another accrues at the time the injury is first inflicted.”).

Accordingly, the new shorter two-year statute of limitations should be applicable to all general negligence claims where the plaintiff first suffered the injury or damages due to the defendant’s negligent conduct after March 24, 2023. Negligence causes of action accruing prior to March 24, 2023, should be under the prior law’s four-year statute of limitations for negligence claims.

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The same evidence that authorizes a probate judge to remove a personal representative nominated in your will could get her reversed on appeal for refusing to appoint this same person as personal representative at the outset. Same facts, same players, opposite legal results.

How is this possible?

Answer: there are dramatically different statutory criteria for the appointment and removal of personal representatives. Removal proceedings are governed by the broad scope of F.S. 733.504, disqualification-from-appointment proceedings are governed by the much narrower F.S. 733.303.

For example, if the nominated personal representative under your will has “conflicting or adverse interests against the estate that will or may interfere with the administration of the estate as a whole,” a probate judge is statutorily authorized to remove that person from office under F.S. 733.504(9). Unfortunately, as the 1st DCA told us over a decade ago in Werner and reminds us again in its recent Araguel opinion discussed below, this same conflict of interest doesn’t disqualify a nominated personal representative from getting appointed in the first place under F.S. 733.303. Same facts, same players, opposite legal results. That’s a problem.

Case Study

Araguel v. Bryan, — So.3d —-, 2022 WL 2712117 (Fla. 1st DCA July 13, 2022)

After holding a hearing on an objection to the appointment of the nominated personal representative under the decedent’s will, the trial court determined that there were “tangible and substantial reasons to believe that damage [would] accrue to the estate if [the nominated person] were appointed Personal Representative … because the facts presented display[ed] an adverse interest to the Estate.”

Based on this evidence the trial court entered an order denying the appointment of the nominated personal representative. It’s a sensible ruling. If these facts warrant removal, why expose the estate to harm by appointing the personal representative in the first place? Too bad this kind of common sense is contrary to state law. So saith the 1st DCA:

To the extent the trial court relied upon Schleider v. Estate of Schleider, 770 So. 2d 1252 (Fla. 4th DCA 2000), in concluding that it had discretion to deny the appointment of the person named in the decedent’s will, that reliance is misplaced because Schleider recognized a degree of discretion that is inconsistent with this court’s binding precedent. For instance, in Schleider, the Fourth District relied upon the dissenting opinion in Pontrello v. Estate of Kepler, 528 So. 2d 441, 445 (Fla. 2d DCA 1988) (Campbell, J., dissenting), for the proposition that the trial court may refuse to appoint a personal representative named in a will upon the basis of facts presented to the court at the time of appointment that—if presented after the appointment—would support removal of the personal representative. 770 So. 2d at 1254. However, this court in Werner recognized that there are different statutory criteria for the appointment and removal of personal representatives. 943 So. 2d at 1008; accord Pontrello, 528 So. 2d at 444 (“[S]ince the legislature has provided separate and distinct statutes to deal with the appointment of the personal representative, the terms of the removal statute should not be read into the explicit appointive statutes.”).

The appoint-then-remove solution

While the current state of the law may not be ideal, there’s nothing to be gained from simply ignoring it and wasting time and money on an appeal you’re likely to lose anyway. For example, as the 1st DCA itself noted in its Werner opinion, while a conflict of interest may not disqualify a named personal representative from getting appointed, there’s nothing stopping you from immediately seeking his removal post appointment:

We note that, to the extent that, on remand, there exists a legitimate concern about whether appellant has a conflict of interest, section 733.504(9), which lists causes for removal of a personal representative once appointed, includes as a ground “[h]olding or acquiring conflicting or adverse interests against the estate that will or may interfere with the administration of the estate as a whole.”

There’s gotta be a better way

The appoint-then-remove solution works legally, but as a practical matter it’s a hurdle that for many may be insurmountable. Estate proceedings are usually low budget, intra-family affairs. Procedural barriers that unnecessarily add expense and delay to an already emotionally charged court process are often outcome determinative. As in, families are left with an unjust result (e.g., a personal representative whose personal financial interests are in conflict with his fiduciary duties to the decedent’s heirs) simply because they can’t afford to pay for all the lawyering that’s needed to get to the just outcome. That may be “legal” but it’s not “right.”