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One of the basic building blocks of modern estate planning in Florida is the “pour over” will/revocable trust combination. Which means it’s extremely common to find yourself administering a probate estate in which your primary — if not only beneficiary — is a residuary trust. In those cases, the first question you need to ask yourself is whether the trustee of the trust or a beneficiary of the trust is going to be the “beneficiary” or “interested person” you need to account to. In other words, does the probate look through rule apply?

What’s the probate look through rule and why should I care?

You can’t administer a probate estate unless you know who you’re supposed to be accounting to. Why? Because that answer determines, among other things, who are the estate’s beneficiaries entitled to receive a copy of the notice of administration (F.S. 733.212, Fla. Prob. R. 5.240) and inventory (Fla. Prob. R. 5.340), as well as who are the estate’s interested persons entitled to service of interim accountings (Fla. Prob. R. 5.345) and the petition for discharge and final accounting (Fla. Prob. R. 5.400), as well as who has standing to object to the PR’s fees (F.S. 733.617(7)) and the PR’s attorney’s fees (F.S. 733.6171(5)). So yeah, it’s a big deal.

F.S. 731.201(2) tells us that in “the case of a devise to an existing trust … the trustee is a beneficiary of the estate … [and] the beneficiary of the trust is not a beneficiary of the estate …” In other words, you don’t look through the trustee to the beneficiaries, you only account to the trustee.

However, if the personal representative and the trustee are the same person, there’s an obvious conflict of interest. In those cases we’re told you need to look through the trustee and account directly to the trust’s beneficiaries. Here’s the operative text in F.S. 731.201(2):

However, if each trustee is also a personal representative of the estate, each qualified beneficiary of the trust as defined in s. 736.0103 shall be regarded as a beneficiary of the estate.

This look through rule’s at the heart of the Mukamal case.

Case study: Duff-Esformes v. Mukamal, — So.3d —-, 2021 WL 5499686 (Fla. 3d DCA November 24, 2021):

This case involved a pour over will and revocable trust. The same two individuals served as personal representatives of the estate and trustees of the trust. The decedent’s surviving spouse received some kind of pre-residuary devise that had been fully satisfied (the opinion doesn’t give specifics), and she was also a lifetime income beneficiary of her husband’s trust.

The personal representatives petitioned for $91,035.14 in attorney’s fees and a $23,650.28 payment to themselves directly as trustees. When surviving spouse objected, the probate judge struck her objections for lack of standing because she’d already received her full pre-residuary distribution from the estate. What this ruling completely ignored was surviving spouse’s ongoing status as an income beneficiary of the trust.

In other words, surviving spouse wore two hats: pre-residuary devisee of the probate estate and income beneficiary of the trust. Focus on one to the exclusion of the other, and you’ve got yourself a reversal on appeal. Here’s why.

Is the income beneficiary of a residuary trust an “interested person” of the estate? YES

The term “interested person” excludes a beneficiary who’s received her complete distribution. Here’s the operative text in F.S. 731.201(23):

(23) “Interested person” means any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved. … The term does not include a beneficiary who has received complete distribution.

So as a pre-residuary devisee, surviving spouse is definitely not an interested person (she’s “received [her] complete distribution”). But as an income beneficiary of the residuary trust, she clearly has an ongoing economic stake in the amount of funds going into her trust, which loops her back into “interested person” status for purposes of the probate proceeding — with standing to object. So saith the 3d DCA:

By virtue of her status as lifetime income beneficiary of the residuary Trust, Duff-Esformes is “expected to be affected by the outcome” of the fee petition. Every dollar the co-personal representatives expend from the administration of the Estate will reduce her resultant income from the residuary Trust. As such, Duff-Esformes qualifies as an “interested person” under section 731.201(23) with standing to contest the petitioned increase in compensation.

Is the income beneficiary of a residuary trust a “beneficiary” of the probate estate? YES … if the look through rule applies.

For probate administration purposes, the term “beneficiary” excludes a beneficiary who’s received her complete distribution of the estate. Here’s the operative text in F.S. 731.201(2):

(2) “Beneficiary” means heir at law in an intestate estate and devisee in a testate estate. The term “beneficiary” does not apply to an heir at law or a devisee after that person’s interest in the estate has been satisfied.

So as a pre-residuary devisee, surviving spouse is clearly not a beneficiary (she’s “received [her] complete distribution”). But if, as in this case, the look through rule applies because the same individuals are serving as both personal representatives and trustees, surviving spouse (as beneficiary of the trust) is looped back into “beneficiary” status for purposes of the probate proceeding — with standing to object. So saith the 3d DCA:

Importantly, the statute carves out an exception for persons to be regarded as beneficiaries in circumstances where “each trustee is also a personal representative of the estate.” In the instant case, both co-personal representatives, Mukamal and Appel, are also co-trustees of the Trust. As such, Duff-Esformes, as a qualified beneficiary of the Trust entitled to lifetime distributions, must be “regarded as a beneficiary” of the Estate even though her interest in the Estate has been satisfied.

So what’s the takeaway?

F. Scott Fitzgerald famously wrote: “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” This case is a good test of that maxim. Can we, as probate practitioners, function while holding the following two opposing ideas in our minds at the same time: the same person can simultaneously be both a beneficiary of the estate who’s already received her entire distribution (as a pre-residuary devisee) and a beneficiary of the estate who will never receive her entire distribution (as the lifetime income beneficiary of a residuary trust).

Also, you can’t make sense of Florida’s Probate Code unless you approach it as a cohesive body of law that’s meant to be read together. Pick and choose standalone clauses here and there, and you might cobble together a winning argument before a busy trial court judge, but you’re going to run into problems on appeal. That’s what happened here. So saith the 3d DCA:

We find that the co-personal representatives’ argument … violate[d] the axiomatic principle “that all parts of a statute must be read together in order to achieve a consistent whole.” Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992).

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This is the third and final installment of the 2021 legislative update. It covers a suite of interrelated new statutory changes intended to protect senior citizens from exploitation as well as reporting on Florida’s distinction as the first state in the nation to adopt an “eldercaring coordination” law.

Part 1 covers two major new additions to our Trust Code intended to bolster Florida’s competitiveness in the high stakes trust business marketplace. And part 2 covers a broad range of bread and butter statutory changes that could have a big impact on our day-to-day practice, but may not get the kind of publicity and notice they otherwise deserve.

The elder abuse epidemic.

First some context. Elder abuse is a huge problem in Florida. Consider the following research compilation from the Legislative Staff Analysis for HB 1041:

As the country’s “baby-boom” population reaches retirement age and life expectancy increases, the nation’s elder population is projected to increase from 49.2 million in 2016 to 77 million by 2034. Florida has long been a destination state for senior citizens and has the highest percentage of senior residents in the entire nation. In 2018, Florida had an estimated 4.3 million people age 65 and older, approximately 20 percent of the state’s population. By 2030, this number is projected to increase to 5.9 million, meaning the elderly will make up approximately one quarter of the state’s population and will account for most of the state’s growth.

Elder populations are vulnerable to abuse and exploitation due to risk factors associated with aging, such as physical and mental infirmities and social isolation. In Florida, almost 1.3 million senior citizens live in medically under served areas and 1.4 million suffer from one or more disabilities.

According to the Department of Justice, approximately 1 in 10 seniors is abused each year in the United States, and incidents of elder abuse are reported to local authorities in 1 out of every 23 cases. Elder abuse can have significant physical and emotional effects on an older adult, and can lead to premature death. Abused seniors are twice as likely to be hospitalized and three times more likely to die than non-abused seniors.

Elder abuse occurs in community settings, such as private homes, as well as in institutional settings like nursing homes and other long-term care facilities. Prevalent forms of abuse are financial exploitation, neglect, emotional or psychological abuse, and physical abuse; however, an elder abuse victim will often experience multiple forms of abuse at the same time. The most common perpetrators of elder abuse are relatives, such as adult children or a spouse; friends and neighbors; and home care aides. Research indicates that elder abuse is under reported, often because the victims fear retribution or care for or trust their perpetrators. Elder abuse deaths are more likely to go undetected because an elder death is expected to occur, given age or infirmity, more so than other deaths due to abuse such as a child death or a death involving domestic violence. Some experts believe this may be one of the reasons elder abuse lags behind child abuse and domestic violence in research, awareness, and systemic change.

[1] Florida’s “slayer rule” expanded to cover elder abuse + other new tools in the fight against elder abuse.

Against this backdrop HB 1041 enacted a slew of legislative changes, all focused on curbing the elder abuse epidemic confronting the U.S. generally, and Florida in particular. Each of these changes could reasonably be the subject of its own article or blog post, and I’m sure we’ll feel their collective impact for years to come. But for now, here’s a summary of this year’s suite of new legislative tools available to us as Florida attorneys in the fight against elder abuse, as provided in the bill’s Legislative Staff Analysis:

The bill creates s. 732.8031, F.S., and amends s. 736.1104, F.S., to prohibit a person who commits any of the following offenses on an elderly or disabled person in any state or jurisdiction from serving as a personal representative or inheriting from the victim’s estate, trust, or other beneficiary assets:

  • Abuse;
  • Neglect;
  • Exploitation; or
  • Aggravated manslaughter.

A final judgment of conviction for abuse, neglect, exploitation, or aggravated manslaughter of the decedent creates a rebuttable presumption that a convicted person may not inherit a beneficiary asset. In the absence of a qualifying conviction, the court may determine by the greater weight of the evidence whether the abuser’s, neglector’s, exploiter’s, or killer’s conduct as defined in ss. 825.102, 825.103, or 782.07(2), F.S., caused the victim’s death, in which the person may not inherit. However, a convicted person may inherit from an estate, trust, or other beneficiary asset if it can be shown by clear and convincing evidence that the capacitated victim reinstated the person as a beneficiary.

The bill also:

  • Clarifies who may be liable in the event a person is unable to inherit because of abuse, neglect, exploitation, or aggravated manslaughter.
  • Requires property acquired as a result of abuse, neglect, exploitation, or manslaughter of an elderly person or disabled adult to be returned.
  • Provides that an obligor making payment according to the terms of its policy or obligation is not liable for said payment unless more than 2 business days before payment, it receives written notice of a claim under the bill.
  • Amends s. 16.56, F.S., to authorize the Office of Statewide Prosecution to investigate and prosecute crimes under chapter 825, F.S.
  • Amends s. 825.101, F.S., to define the terms:
    • “Improper benefit” as any remuneration or payment, by or on behalf of any service provider or merchant of goods, to any person as an incentive or inducement to refer customers or patrons for past or future services or goods; and
    • “Kickback” as having the same meaning as in provided in s. 456.054(1), F.S.
  • Amends s. 825.102, F.S., to prohibit unreasonable isolation of an elderly person or disabled adult from his or her family members.
  • Amends s. 825.103, F.S., to:
    • Prohibit seeking out appointment as a guardian, trustee, or agent under power of attorney with the intent to obtain control over the victim’s assets and person for the benefit of a perpetrator or a third party.
    • Prohibit intentional conduct by a perpetrator who modifies or alters the victim’s originally intended estate plan to financially benefit either the perpetrator or a third party in a manner inconsistent with the intent of the elderly person or disabled adult.
    • Expand the meaning of exploitation of an elderly or disabled person to include breach of fiduciary duty resulting in a kickback or receipt of an improper benefit.

The bill also amends s. 825.1035, F.S., to authorize an agent under a DPOA to petition for an injunction for protection against exploitation of a vulnerable adult, and to allow a court to make a one-time extension of the injunction. The bill amends the statutory form for a petition for an injunction for protection against exploitation of a vulnerable adult in s. 825.1035, F.S., to include sufficient identifying information about the petitioner or the vulnerable adult.

By the way, for more on why expanding our slayer statute to cover elder abuse cases is a good idea, you’ll want to read Expanding the Slayer Rule in Florida: Why Elder Abuse Should Trigger Disinheritance, by Natasa Glisic. Here’s an excerpt:

As elder abuse is on the rise, the states have realized that something more needs to be done to combat it. There are currently eight states that have expanded their Slayer Rule statutes to include perpetrators of elder abuse. Just like the original Slayer Rule disinherits the heir or beneficiary who has killed the decedent, the elder-abuse Slayer Rule disinherits the heir or beneficiary who has abused the decedent. The public policy behind expanding the Slayer Rule is to prevent perpetrators of elder abuse from profiting from their wrongdoing. The perpetrator will be deemed as to have predeceased the decedent or to have disclaimed his or her interest in the decedent’s estate. As previously mentioned, family members are usually the perpetrators of elder abuse and the expansion of the Slayer Rule will work effectively to penalize abusers. The expansion is effective because family members are the ones to inherit under a state’s intestacy laws and in many instances are beneficiaries under the decedent’s last will and testament. Some perpetrators are motivated to commit financial abuse in order to purposefully modify the victim’s estate plan. Others purposefully engage in abuse in order to speed up the victim’s death so they can inherit. As the Slayer Rule is applied to cases of elder abuse, the wrongdoer is accordingly punished while the future abuser is deterred from committing elder abuse. …

Expanding the Slayer Rule will not only be beneficial for public policy and let our elderly population know that the law is on their side, but it will also deter potential abusers. As many forms of elder abuse are fueled by the abuser’s greediness and possibility of inheritance, the abuser’s knowledge of the repercussions barring inheritance will reduce his or her incentive to abuse. For example, a caretaker-child will be less likely to refuse to provide his or her aging parent with decent living conditions because he does not want to spend his or her would-be inheritance money when he knows he could be completely barred from inheriting if found guilty or liable for elder abuse. Elder abuse caused by monetary incentives will be reduced because the abuser will be deterred by the possibility of statutory disinheritance.

[2] Florida enacts first-in-the-nation “eldercaring coordination” law.

If you get a call from a desperate family member wanting to protect mom or dad from obvious financial exploitation or some other form of abuse, your first question should be: is the parent legally incapacitated? If the answer’s “yes,” your path is clear and in many ways these are the “easy” cases. There exists a well defined, judicially enforceable mechanism for addressing the problem at hand: guardianship.

Unfortunately, the guardianship route doesn’t solve the problem of the elderly family member who isn’t quite legally incapacitated, but is incontrovertibly vulnerable due to diminished capacity. These “in between” cases are always the hardest calls. Courts are reluctant to interfere with the rights of individuals who have legal capacity, and the legal representation of these individuals is challenging. We now may have a solution for some of these in-between cases; it’s called “eldercaring coordination,” and it’s codified in new F.S. 44.407.

Florida is the first state in the nation to statutorily recognize eldercaring coordination, a court-ordered dispute resolution process for aging persons and their families that’s not dependent on a prior adjudication of incapacity. The new eldercaring coordination law resulted from a groundbreaking collaboration between the Florida Chapter of the Association of Family and Conciliation Courts and the Association for Conflict Resolution.

As reported in a Florida Bar News article entitled Eldercaring legislation becomes law:

Sen. Dennis Baxley, R-Ocala, and Rep. Brett Hage, R-The Villages, sponsored the legislation, which won unanimous approval of all committees and subcommittees of reference and on the floors of both houses during the 2021 Legislative Session. Gov. Ron DeSantis signed CS/CS/HB 441 on June 4 and §44.407, Florida Statutes, became law on July 1.

Florida’s new eldercaring coordination statute resulted from a collaboration between the Association for Conflict Resolution and the Florida Chapter of the Association of Family and Conciliation Courts. In 2014, Linda Fieldstone and Fifth Circuit Judge Michelle Morley created and co-chaired the FLAFCC Task Force on Eldercaring Coordination, which included 20 statewide entities and a well-credentialed advisory committee. The task force partnered with the Association for Conflict Resolution Task Force on Eldercaring Coordination — 20 U.S. and Canadian organizations — and developed guidelines for eldercaring coordination. The guidelines are based on parenting coordination, a dispute resolution process for parents in high conflict regarding child-related issues.

In 2015, the two task forces merged into the Elder Justice Initiative on Eldercaring Coordination. Eight Florida circuits are pilot sites, paving the way for easily replicable pilot sites throughout the U.S., Canada, and abroad. On World Elder Abuse Awareness Day 2018, the United Nations recognized eldercaring coordination as an Awareness to Action Model for the protection of aging persons.

Judge Morley said eldercaring coordination is a process that has been needed for a long time.

“Every time I talk about it with to someone, I see people nodding their heads, acknowledging that they know someone whose family has been hurt by conflict over the care of an aging loved one,” she said. “It breaks my heart to think of the wonderful and amazing people who are at the center of that family conflict in their waning years. They know they are not the strong, independent people they used to be, and they are dependent on people who fight about them. In court, this aging person is put in the spotlight — alone, afraid, confused, and often unheard — as family members argue about their personal abilities and future. Eldercaring coordination is a person-focused and strength-based process totally unlike the adversarial court process. It is a more sensible way to address the emotional and private family issues surrounding the care and autonomy of elder loved ones.”

For me, this is essentially an elder-abuse protection tool that aids diminished, vulnerable, elderly adults that don’t meet the strict legal definition of “incapacity,” but clearly need help. Anyway, for a more formal summary of this new statutory tool you’ll want to read the bill’s Legislative Staff Analysis. Here’s an excerpt:

The bill creates s. 44.407, F.S., establishing a statutorily-authorized alternative dispute resolution option in which court-appointed eldercaring coordinators assist elders, their legally authorized decision makers, and their family members in resolving high-conflict disputes that can impact an elder’s safety and autonomy. …

The bill authorizes a court to appoint an eldercaring coordinator and refer the parties to eldercaring coordination upon:

  • Agreement of the parties;
  • The court’s own motion; or
  • Any party’s motion

… A court may only refer the parties to eldercaring coordination to address disputes regarding an elderly person’s care and safety, and may not refer the parties to eldercaring coordination in actions brought under chapters 732, 733, and 736, F.S., which relate to wills and trusts.

… The bill requires the eldercaring coordinator’s fees to be paid in equal portion by each party referred to the eldercaring coordination process and requires the referral order to specify the percentage of eldercaring coordination fees each party must pay. The court may determine the allocation among the parties of fees and costs and may make an unequal allocation based on the financial circumstances of each party …  If the court finds a party is indigent, the court may not order eldercaring coordination unless public funds are available to pay the indigent party’s portion or a non-indigent party agrees to pay the fees and costs.

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This is the second installment of the 2021 legislative update. It covers a broad range of bread and butter statutory changes that could have a big impact on our day-to-day practice, but may not get the kind of publicity and notice they otherwise deserve.

Part 1 covers two major new additions to our Trust Code intended to bolster Florida’s competitiveness in the high stakes trust business marketplace. And part 3 covers a suite of interrelated new statutory changes intended to protect senior citizens from exploitation as well as reporting on Florida’s distinction as the first state in the nation to adopt an “eldercaring coordination” law.

[1] Attorneys need to provide prior written notice if they intend on charging a fee based on the probate statutory fee schedule.

If there’s anyone out there that still believes the Probate Code’s attorney’s fee statute (F.S. 733.6171) or its Trust-Code equivalent (F.S. 736.1007) establishes a fee that’s “set” or otherwise “blessed” by Florida law, 2021 is the year that finally puts that myth to rest. At my firm we’ve never relied on the statutory fee schedule (we bill hourly) and on more than one occasion I’ve seen it abused, including this noteworthy example.

And apparently I’m not the only one that’s not a big fan of statutory fees schedules. Earlier this year Sen. Aaron Bean, R-Jacksonville, proposed legislation that would have completely eliminated the statutory fee schedule. As reported by the Florida Bar News in Bill would end guidelines on estate administration attorney fees:

“Is it appropriate to put prices at all in statute? I say no,” Bean said. “Where there is no prescribed fee, there is a public negotiation and the consumer benefits as they are able to negotiate such a fee….

“To those attorneys who do this type of work, they’re going to have a conversation with their prospective client that says, ‘You don’t have to pick me and the fee is not prescribed in law.’”

“You’re trying to create a market approach to fees that are not tied to a percentage or value of an estate?” asked Sen. Darryl Rouson, D-St. Petersburg.

“That was our initial mission, to take that out,” Bean replied. “I’ve now come to the realization we don’t need to put fees in at all. Let the consumer negotiate the fees.”

This effort ran into stiff opposition from the Bar’s Real Property, Probate and Trust Law Section. The final compromise bill kept the fee schedule in the statute, but it’s now only applicable if the attorney provides prior written disclosures making clear that the fee schedule’s not mandatory, that the PR or trustee doesn’t have to hire the same attorney who drafted the will or trust, and that the client’s entitled to a detailed hourly billing summary even if the fee schedule’s going to be used.

Here’s the new disclosure requirement for personal representatives (contained in F.S. 733.6171), there’s a similar new notice provision for trustees in F.S. 736.1007.

(b) An attorney representing a personal representative in an estate administration who intends to charge a fee based upon the schedule set forth in subsection (3) shall make the following disclosures in writing to the personal representative:

1. There is not a mandatory statutory attorney fee for estate administration.
2. The attorney fee is not required to be based on the size of the estate, and the presumed reasonable fee provided in subsection (3) may not be appropriate in all estate administrations.
3. The fee is subject to negotiation between the personal representative and the attorney.
4. The selection of the attorney is made at the discretion of the personal representative, who is not required to select the attorney who prepared the will.
5. The personal representative shall be entitled to a summary of ordinary and extraordinary services rendered for the fees agreed upon at the conclusion of the representation. The summary shall be provided by counsel and shall consist of the total hours devoted to the representation or a detailed summary of the services performed during the representation.
(c) The attorney shall obtain the personal representative’s timely signature acknowledging the disclosures.
(d) If the attorney does not make the disclosures required by this section, the attorney may not be paid for legal services without prior court approval of the fees or the written consent of all interested parties.

[2] Does Florida’s post-divorce automatic revocation rule for Wills and Trusts apply to fiancés? It does now.

In 1951 Florida added a provision to its Probate Code automatically cutting divorced spouses out of each others’ wills (F.S. 732.507(2)). In 1989 a similar provision was added to our Trust Code (F.S. 736.1105(2)). And in 2012 the post-divorce automatic revocation rule was extended to non-probate transfers, such as pay-on-death payments from life insurance policies, annuities, employee benefit plans, and IRAs (F.S. 732.703).

All three statutes were intended to address the same problem. But there was a glitch. As originally enacted, the older post-divorce revocation rules for Wills and Trusts only applied if the marriage predated the operative document. In other words, if you included your fiancé in your will, then married her, then divorced her, the rule didn’t apply, as the parties learned the hard way in the Gordon v. Fishman case. The more recent post-divorce revocation rule for non-probate transfers didn’t have this loophole.

The older revocation rules for Wills and Trusts have now been amended to track the newer non-probate transfers rule. All three now apply regardless of whether the operative document was signed before or after the marriage. Here’s how amended F.S. 732.507(2) now reads (a similar change was made to F.S. 736.1105(2)):

Any provision of a will that affects the testator’s spouse is void upon dissolution of the marriage of the testator and the spouse, whether the marriage occurred before or after the execution of such will. Upon dissolution of marriage, the will shall be construed as if the spouse died at the time of the dissolution of marriage.

[3] Are restricted depository accounts required in all probate proceedings? Not anymore.

In some Florida counties there’s a blanket policy requiring the deposit of all liquid assets in a restricted depository account. Here’s the problem with those policies: under F.S. 69.031 a restricted depository account is  meant to be an extraordinary remedy used on a case-by-case basis, as recently explained in Goodstein v. Goodstein, 263 So.3d 78, 80 (Fla. 4th DCA 2019):

According to section 69.031(1):

When it is expedient in the judgment of any court having jurisdiction of any estate in process of administration by any guardian, curator, executor, administrator, trustee, receiver, or other officer, because the size of the bond required of the officer is burdensome or for other cause, the court may order part or all of the personal assets of the estate placed with a bank, trust company, or savings and loan association … designated by the court ….

(Emphasis added).

The emphasized language makes it clear and unambiguous that a blanket policy providing for a depository to be used in all probate cases is improper.

F.S. 69.031 has now been amended by adding the following sentence to require the court, in situations where a restricted depository account’s been ordered, to vacate or terminate its order if the estate’s personal representative posts and maintains a bond for the value of the estate’s assets or in some other reasonable amount determined by the court.

Notwithstanding the foregoing, in probate proceedings and in accordance with s. 733.402, the court shall allow the officer at any time to elect to post and maintain bond for the value of the personal property, or such other reasonable amount determined by the court, whereupon the court shall vacate or terminate any order establishing the depository.

[4] Benefit of 6-month limitations period extended to trust directors and a trustee’s directors, officers, and employees.

Under F.S. 736.1008 a trustee can shorten the limitations period for a breach of trust claim to only 6 months “with respect to a matter that was adequately disclosed in a trust disclosure document” (think: trust accounting). This is a big deal.

The limitations period for a breach of trust action is usually 4 years. F.S. 736.1008 doesn’t explicitly say you have 4 years to sue (that would be too easy), instead it gets you to a 4-year limitations period by cross referencing to “the applicable limitations period provided in chapter 95.” Because a breach of trust is a form of intentional tort, the applicable limitations period is found in F.S. 95.11(3)(o), which is 4 years.

Now back to the new legislation. F.S. 736.1008‘s been amended to extend the benefits of the shortened 6-month limitations period to trust directors acting under our new Uniform Directed Trust Act and also to a corporate trustee’s directors, officers, and employees. The trust-director change is accomplished by adding the words “trust director” after every reference to a trustee, and the second change was accomplished by adding the following new sentence to the statute:

(7) Any claim barred against a trustee or trust director under this section is also barred against the directors, officers, and employees acting for the trustee or trust director.

[5] Homestead property and revocable trusts.

The Legislative Staff Analysis does a great job of explaining this year’s homestead statutory changes. The following is drawn almost exclusively from that source.

Although there is reasonable legal certainty about the rights of creditors and a decedent’s family when homestead property is devised by a will, there’s less certainty when homestead property’s devised by a revocable trust. Florida law is clear that the constitutional restrictions on the devise of homestead property apply to homestead property held in a revocable trust. However, it is unclear whether the protection from forced sale carries over to the property owner’s heirs when the heirs inherit the property through a revocable trust.

In particular, there is uncertainty as to the homestead exemption’s application to the trustee’s right to sell real property subject to the trust’s terms and pay valid claims against the decedent’s estate out of trust assets.

Florida courts attempting to address this uncertainty have reached opposite results. In Elmowitz v. Estate of Zimmerman, 647 So.2d 1064 (Fla. 3d DCA 1994), the 3d DCA held that the devise of homestead property through a revocable trust’s residuary clause caused the homestead exemption to be lost, and thus to not pass to the trust’s beneficiaries; however, a footnote indicates that had the property been specifically devised under the revocable trust the exemption may have passed to the beneficiary. In HCA Gulf Coast Hospital v. Estate of Downing, 594 So.2d 774 (Fla. 1st DCA 1992), the 1st DCA looked to the devise’s substance, rather than its form, to find that the homestead exemption for property devised through a trust for the benefit of the decedent’s adult daughter passed to the daughter, as she would have otherwise been entitled to claim homestead protection had title passed to her by will or intestacy. Similarly, in Engelke v. Engelke, 921 So.2d 693 (Fla. 4th DCA 2006), the 4th DCA found that a settlor’s interest in homestead property held in a revocable trust was constitutionally protected homestead which could not be used to pay the estate’s claims and expenses.

Two legislative changes were made this year to address all this uncertainty:

The first change is procedural. F.S. 736.0201 was amended to authorize a proceeding to determine the homestead status of real property owned by a trust to be filed in the probate proceeding for the settlor’s estate if the settlor was treated as the owner of the interest held in the trust under F.S. 732.4015, with such a proceeding to be governed by the Florida Probate Rules.

The second change is substantive. New F.S. 736.1109 was created to provide that, for a revocable or testamentary trust:

  • If a devise of homestead property under a trust violates the homestead devise limitations in article X, section 4(c) of the Florida Constitution, title shall pass as provided under F.S. 732.401 at the moment of death. In other words, immediately upon the decedent’s death, title to the homestead property will pass to the decedent’s heirs, not the trustee, and the heirs that receive the property will be determined according to a slightly modified version of the intestate rules of succession. Thus, if there is no surviving descendant of the decedent, the decedent’s spouse receives the entire intestate estate, but if the decedent is survived by a spouse and at least one descendant, the surviving spouse takes a life estate in the homestead, with a vested remainder to the descendants in being at the time of the decedent’s death.
  • A power of sale or general direction to pay debts, expenses, and claims within the trust instrument does not subject an interest in protected homestead property to the claims of a decedent’s creditors, administration expenses, or obligations of a decedent’s estate.
  • If a trust directs the sale of property that would otherwise qualify as protected homestead, and the property is not subject to the constitutional limitations on the devise of homestead, title will remain vested in the trustee and subject to the trust’s provisions.

My sources:

With the exception of the attorney’s fee-schedule amendments, all of the legislation covered in this post was contained in HB 609, and explained in the bill’s corresponding Legislative Staff Analysis. The fee schedule change was contained in HB 625, and explained in the bill’s corresponding Legislative Staff Analysis. These are all good resources for anyone wanting to do a deeper dive into any of the legislation discussed above.

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This is the first installment of the 2021 legislative update. It covers two major new additions to our Trust Code intended to bolster Florida’s competitiveness in the high stakes trust business marketplace.

Part 2 covers a broad range of bread and butter statutory changes that could have a big impact on our day-to-day practice, but may not get the kind of publicity and notice they otherwise deserve. And part 3 covers a suite of interrelated new statutory changes intended to protect senior citizens from exploitation as well as reporting on Florida’s distinction as the first state in the nation to adopt an “eldercaring coordination” law.

The high stakes jurisdictional competition for trust funds is real and intense.

The largest inter-generational wealth transfer in history will pass over $30 trillion in inheritance over the next few decades (others estimate the number will be more like $41 trillion or $68 trillion; whatever it is, it’s going to be a lot). Much of that wealth will end up in trusts. The jurisdictional competition among U.S. states to capture as much of that trust business as possible is fierce, and for the bankers and professionals who make a living working with those trusts the stakes are high. How high? Think billions of dollars.

For example, in 2001 Florida made dynasty trusts possible in this state by effectively abolishing the rule against perpetuities (RAP) as applied to trusts (we extended the perpetuities period to 360 years). Two nationally recognized law professors then published an empirical study of federal banking data concluding that as of the end of 2003 roughly $100 billion in trust funds had shifted to states – like Florida – that abolished the RAP.  According to the authors these new trust funds may translate into as much as $1 billion in yearly trustees’ fees. So yeah, the stakes are high.

This year’s crop of market-driven legislative innovations includes the new Uniform Directed Trust Act, which Florida adopted as new Part XIV of our Trust Code (set out in new ss. 736.1401736.1416); and the new Community Property Trust Act, which Florida adopted as new Part XV of our Trust Code (set out in new ss. 736.1501736.1512).

[1] Florida’s new Uniform Directed Trust Act.

Directed trusts are part of a growing trend towards splitting trust powers between trustees and non-trustees (trust protectors are a common example). In a fully directed trust the trustee performs administrative functions while following the directions of the trust director. The intent of the law is to provide avenues to limit trustee liability, which translates into lower fees.

Directed trusts may be great marketing, but from a practitioner’s point of view an important question we all need to be asking ourselves is who is legally responsible if something goes wrong? In other words, if a trustee’s “directed” to take action that’s later deemed to be a breach of trust, who gets sued: the trustee or the trust director or both?

According to some really smart people the Uniform Directed Trust Act’s solved this liability problem as well as all the other ancillary issues that come with these new split-duty relationships. Time will tell. In the meantime here’s the abstract for Making Directed Trusts Work: The Uniform Directed Trust Act, co-written by Prof. John Morley of Yale Law School and Prof. Robert H. Sitkoff of Harvard Law School, explaining the “four areas of practical innovation” the new act was designed to deliver.

Directed trusts have become a familiar feature of trust practice in spite of considerable legal uncertainty about them. Fortunately, the Uniform Law Commission has just finished work on the Uniform Directed Trust Act (UDTA), a new uniform law that offers clear solutions to the many legal uncertainties surrounding directed trusts. This article offers an overview of the UDTA, with particular emphasis on four areas of practical innovation. The first is a careful allocation of fiduciary duties. The UDTA’s basic approach is to take the law of trusteeship and attach it to whichever person holds the powers of trusteeship, even if that person is not formally a trustee. Thus, under the UDTA the fiduciary responsibility for a power of direction attaches primarily to the trust director (or trust protector or trust adviser) who holds the power, with only a diminished duty to avoid “willful misconduct” applying to a directed trustee (or administrative trustee). The second innovation is a comprehensive treatment of non-fiduciary issues, such as appointment, vacancy, and limitations. Here again, the UDTA largely absorbs the law of trusteeship for a trust director. The UDTA also deals with new and distinctive subsidiary problems that do not arise in ordinary trusts, such as the sharing of information between a trustee and a trust director. The third innovation is a reconciliation of directed trusts with the traditional law of cotrusteeship. The UDTA permits a settlor to allocate fiduciary duties between cotrustees in a manner similar to the allocation between a trust director and directed trustee in a directed trust. A final innovation is a careful system of exclusions that preserves existing law and settlor autonomy with respect to tax planning, revocable trusts, powers of appointment, and other issues. All told, if appropriately modified to fit local policy preferences, the UDTA could improve on the directed trust law of every state. The UDTA can also be used by practitioners in any state to identify the key issues in a directed trust and to find sensible, well-drafted solutions that can be absorbed into the terms of a directed trust.

And for a more cautious take on the UDTA, you’ll want to read The Uniform Directed Trust Act by Prof. Charles E. Rounds, Jr. Here’s an excerpt:

As is the case with any piece of legislation that would tweak equity doctrine, the UDTA has its traps for the unwary. Here are a few:

  • Under the UDTA, the directed trustee is liable only for his own “willful misconduct,” while under the UTC, specifically Section 808(b), the trustee may not honor a direction that’s “manifestly contrary to the terms of the trust or the [directed] trustee knows the attempted exercise would constitute a seriousbreach of a fiduciary duty that the person holding the power owes to the beneficiaries of the trust.”
  • While the UDTA is almost all about non-trustee directors, buried in the UTC, specifically Section 12, is some co-trustee to co-trustee direction doctrine.
  • The UDTA doesn’t apply to powers to hire and fire trustees and trust directors. Presumably background principles of equity will continue to regulate those types or directions.
  • The UTC and the UDTA treat veto powers differently when it comes to directed trustee liability.

For more on Florida’s version of the UDTA see HB 609 and the corresponding Legislative Staff Analysis.

[2] Florida’s new Community Property Trust Act.

Surviving spouses in community property states enjoy a significant income tax advantage over surviving spouses in common law states. The advantage, known as the “double step-up in basis rule,” generally eliminates capital gains for surviving spouses in community property states. Florida’s not a community property state, so married couples in this state usually don’t get the benefit of the double step-up in basis rule. Florida’s new Community Property Trust Act (CPTA) tries to partially level the tax playing field for Florida married couples to the extent they choose to “opt-in” to the new statute.

The CPTA allows married couples in Florida to opt-in to community property treatment for assets held in a trust that meets certain requirements. Other common law states have adopted similar opt-in legislation, including Alaska, Tennessee, and South Dakota. This example from the bill’s Legislative Staff Analysis demonstrates the potential tax savings of the double step-up in basis rule:

An example of the disparate tax outcomes in common law states and community property states, is as follows: a married couple, Husband and Wife, own appreciated undeveloped real estate purchased some time ago with a current tax basis of $100,000 and a $1 million fair market value. Title to the property is held jointly by both Husband and Wife. Husband dies, and Wife sells the real estate at year’s end for its $1 million fair market value. In a common law state, s. 1014(b)(6) of the IRC results in a $550,000 income tax basis to Wife, because Husband’s basis in his half of the property increases from the original $50,000 to $500,000 (the value on his date of death), and Wife’s value remains $50,000. The real estate’s sale produces a $450,000 gain (the $1 million fair market value minus the $550,000 basis) and a tax liability of $107,100 ($450,000 x 23.8 percent). In contrast, in a community property state, s. 101 4(b)(6) of the IRC results in a $1 million income tax basis to Wife due to the step -up in basis of the property in its entirety. The real estate’s subsequent sale produces zero gain ($1 million fair market value less $1 million basis) and zero tax liability.

While the CPTA’s potential tax benefits are hard to argue with, it’s worth noting that the IRS continues to decline to comment on whether property classified as community property under Alaska’s opt-in statute or similar elective community property legislation in Tennessee and South Dakota is entitled to the step up in basis. See IRS Pub. 555, Community Property:

Note. This publication doesn’t address the federal tax treatment of income or property subject to the “community property” election under Alaska, Tennessee, and South Dakota state laws.

See also IRS Manual (07-24-2017):

Note: While not community property states, Alaska and Oklahoma do allow couples to elect a community property system. See Alaska Statutes §§ 34.77.020 – 34.77.995. The U.S. Supreme Court ruled that the Oklahoma statute would not be recognized for federal income tax reporting purposes. Commissioner v. Harmon, 323 U.S. 44 (1944). The Harmon decision should also apply to the Alaska system for income reporting purposes.

On the other hand, here’s background commentary on the tax efficacy of community property trusts funded by married couples moving to Florida from community property states. This comes from an excellent article by Georgia tax attorney Jeremy T. Ware entitled Section 1014(b)(6) and the Boundaries of Community Property:

Another important area of community property that has long caused confusion is whether community property used by community property state residents to fund trusts remains community property for purposes of § 1014(b)(6). The answer is unequivocally yes, as long as such property remains community property under state law and half of its value is includible in the decedent’s gross estate.

In Revenue Ruling 66-283, the IRS considered a revocable trust funded with community property by California residents. The Service noted that community property held by a trustee retains its community character under California law (unless the grantors provide otherwise) and that the federal estate tax provisions caused inclusion of half the trust in the estate of the first spouse to die. Thus, the Service ruled that the trust property was community property and received the full step up under § 1014(b)(6). This, of course, fits within the plain language of § 1014(b)(6), which requires that the community property be community property under state law and that half of the property be included in the estate of the first spouse to die.

Whether state law considers community property used to fund a trust to be community property is another question, however. In Alaska, California, Texas, and Wisconsin, community property transferred into a trust remains community property either automatically or by the couple’s provision of such in the trust instrument. While no clear authority exists for the other community property states, one commentator points out, “Because the character of community property is generally not affected by how title is held …. it would follow that titling property in the name of a revocable trust or trusts should not affect the community property character of the property.” In any case, Revenue Ruling 66-283 indicates that trust property will be considered community property as long as it is found to be community property under state law. Thus depending on state law, community property in a trust can take advantage of § 1014(b)(6).

For more on Florida’s CPTA see HB 609 and the corresponding  Legislative Staff Analysis.

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Title III of the Helms-Burton Act creates a private cause of action for U.S. nationals whose property was confiscated by the Castro regime before March 12, 1996. However, the Act grants U.S. presidents the authority to suspend these lawsuits if it’s necessary to the national interest and will expedite a transition to democracy in Cuba. And that’s exactly what they all did until 2019, when for the first time these cases were permitted proceed.

Attorneys John Bellinger and Sean Mirski have reported extensively on these cases on the Lawfare blog. In an advisory published on the  Cuba Standard site, they report that plaintiffs “have filed roughly 40 suits under Title III in the two years it has been operative, including 15 new suits against a mix of U.S., European and Cuban companies operating in industries such as mining, sugar, tobacco, advertising, banking, construction, and ranching.”

Here’s the problem, most of the property at issue in these cases was confiscated in the early 1960s, over half a century ago. In 1996, when the Act was passed, the affected property owners (read: claimants) were old, but most were still alive. By now, 25 years later, most of those claimants have long since passed away.

Is a Helms-Burton Act claim a “personal right” that dies with you or a “property right” your heirs can inherit (and prosecute after your death)?

Because many of the original claimants are now dead, early on in these cases the issue came up as to whether their private cause of action under the Helms-Burton Act is a property right their heirs can inherit (and prosecute after their deaths) or a personal right that dies with them? (By way of example, this distinction used to be a big deal in the publicity rights context, though that’s changing). The controlling statue is 22 U.S.C. § 6082(a)(4):

(B) In the case of property confiscated before March 12, 1996, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before March 12, 1996.
One word: “such”, is key to interpreting this clause. In Gonzalez v. Amazon, Inc., Judge Scola emphasized that qualifying word when concluding, without saying so explicitly, that the statute creates a personal right only the original claimants could act upon, which means it’s not a property right their heirs can inherit. Bottom line, when you’re gone your claim’s gone with you.
Here, the Plaintiff’s father allegedly inherited the property from the Plaintiff’s grandfather in 1988, and then Plaintiff’s mother inherited the property from his father in November 2016. (ECF No. 29 at ¶ 16.) Sometime after the Plaintiff’s mother inherited the land in November 2016, she “chose to pass her ownership claim” to the Plaintiff. (Id.) The plain language of the statute indicates that these allegations are insufficient. The statute states that a United States national may not bring an action “unless such national” acquires an interest to the property before 1996. 22 U.S.C. § 6082(a)(4)(B) (emphasis added). “[S]uch national” plainly refers to the “United States national” who may or may not bring an action under the Helms-Burton Act. See Havana Docks Corporation v. MSC Cruises SA Co., — F. Supp. 3d –, 2020 WL 59637, at *3 (S.D. Fla. Jan. 6, 2020) (Bloom, J.) (reasoning that ignoring the qualifying word “such” in interpreting a separate provision of the Act “would run afoul basic canons of statutory interpretation.”). Moreover, this interpretation of the subsection is consistent with its intent, which is to prevent individuals from transferring their ownership interest in confiscated property to a United States citizen after the Act’s enactment in 1996. Conference Report at H1660, 1996 WL 90487. Congress did not intend for those who acquired an interest in confiscated property after 1996 to bring Helms-Burton Act claims if their property was confiscated before March 12, 1996. Therefore, Gonzalez has failed to state a claim upon which relief may be granted.

If it’s a personal right, do dead people own this right?

Based on the statutory construction reflected in the Gonzalez case (and others like it), defendants have successfully fended off Helms-Burton Act claims filed by the heirs of the original March 12, 1996 claimants.

OK, so if you inherit a claim under the Act after 1996 you’re not the same owner that existed in 1996 (new owner = no claim), but what if the probate estate of the original owner is trying to prosecute one of these claims, has ownership transferred to the estate or is the same owner (now deceased) still acting (via his estate’s personal representative) upon the original personal right granted under the Act (same owner = viable claim)?

Lurking under the surface of this bit of statutory construction is a fundamental, almost philosophical question: do dead people own property? There’s a lot more riding on that question than who wins or loses one of these Helms-Burton Act cases. Not surprisingly, it’s a question that really smart people have ruminated on for a long time, including none other than Thomas Jefferson, who in a letter to James Madison wrote:

The earth belongs in usufruct to the living; the dead have neither powers nor rights over it. The portion occupied by any individual ceases to be his when he himself ceases to be, and reverts to society.

Case study: Fernandez v. Seaboard Marine, Ltd., Slip Copy, 2021 WL 4902506 (United States District Court, S.D. Florida, October 21, 2021):

This Helms-Burton Act case involves claims by Odette Blanco de Fernandez née Blanco Rosell and the estates of her four deceased brothers who are suing Seaboard Marine for trafficking in property that was confiscated by the Cuban government in 1960. The brothers all died after 1996.

Not surprisingly the defendant moved to dismiss the claims by the estates of the deceased brothers on the grounds that these estates acquired their claims after 1996. In other words, defendant argued that when the brothers died their claims (to the extent they’re property subject to transfer) passed to their probate estates (new owners = no claims). Plaintiffs argued the claims were still owned by the deceased brothers, and the only thing the estates were doing (via their personal representatives) was prosecuting those personal rights on behalf of the deceased owners (same owners = viable claims). Here’s how the court summarized this argument:

Plaintiffs contend that “[o]wnership of the decedent’s property maintains with the decedent until it is formally distributed by the personal representative to the heirs and other beneficiaries[.]” … As such, according to Plaintiffs, the deceased Blanco Rosell Siblings still owned their claims to the Confiscated Property, no one else acquired them, and the personal representatives are authorized to manage their claims by bringing this lawsuit on their behalf.

If dead people don’t own property, your Helms-Burton Act claim evaporates at the moment of death.

In line with other federal judges the court in this case didn’t buy plaintiffs’ argument, dismissing their claims. According to the court the deceased brothers no longer owned their claims, when they died those interests (to the extent they’re property subject to transfer) passed to their probate estates as new owners. New owners = no claims. Motion to dismiss granted.

What’s interesting for Florida probate attorneys is the “why” of the court’s ruling, which turns entirely on probate law concepts that come up all the time in our daily practice (even if we’re not conscious of them). Here’s how the judge articulated the basis for her ruling:

The Court rejected Plaintiffs’ argument that “the estates and personal representatives ‘stepped into the shoes’ of the decedents [and] maintain[ed] the original acquisition date of the Confiscated Property” and determined that “upon the death of the four Blanco Rosell Siblings, their assets became property of their respective estates and no longer belonged to them individually.” Id. at 16. See Depriest v. Greeson, 213 So. 3d 1022, 1025 (Fla. 1st DCA 2017); Sharps v. Sharps, 214 So. 2d 492, 495 (Fla. 3d DCA 1968) (“Upon [husband’s] death, in the twinkling of a legal eye, that check became an asset of the husband’s estate.”); see also Fla. Stat. § 732.101(2) (“The decedent’s death is the event that vests the heirs’ right to the decedent’s intestate property.”); Fla. Stat. § 732.514 (“The death of the testator is the event that vests the right to devises unless the testator in the will has provided that some other event must happen before a devise vests.”).

The court in this case relied heavily on the Depriest decision, which I wrote about from the very mundane and practical point of view of why letting family members drive a decedent’s car is a really bad idea. Who knew a simple probate case involving personal injuries caused by someone driving a decedent’s car would one day determine the outcome of dozens of complex federal actions freighted with all of the geopolitical baggage U.S.-Cuba relations have carried for decades?!

Bonus material.

Anyway, for those of you looking for a deeper dive into the Florida probate law underlying this case, below is a long quote from Judge Bloom’s order that walks us through her analysis of Depriest. What I find most interesting about this analysis is how it rests on a distinction we don’t often think about as probate attorneys: personal rights vs. property rights.

Florida probate proceedings are by statute in rem proceedings; they deal with property rights. Naturally, probate attorneys are primed to think only in terms of those rights. And that can be a trap, as demonstrated by this Helms-Burton Act case, which turned on personal rights that don’t survive postmortem.

Building on that distinction Judge Bloom then interrogates a simple — yet consequential — question: do dead people own property?  Answer: NOT in Florida. This is a must-read for probate attorneys.

In Depriest, an injured motorist brought an action against a decedent’s estate, alleging that the estate was vicariously liable for damages caused by the decedent’s daughter while driving the decedent’s car. Id. at 1024. Before the trial court and on appeal, the parties disputed whether the estate owned the decedent’s car after he died. Id. at 1025. While the Depriest Court ultimately agreed with the trial court’s disposition of the case, they did “not agree that the estate had no legal ownership in Decedent’s car.” Id. at 1025. The court explained as follows:

When Decedent died, “in the twinkling of a legal eye,” the car became an asset of his estate. Sharps v. Sharps, 214 So. 2d 492, 495 (Fla. 3d DCA 1968) (holding that an uncashed check payable to the decedent became an asset of his estate the instant he died, and his widow would have to prove that it was a gift to her individually in order to obtain the proceeds for herself). See also Mills v. Hamilton, 121 Fla. 435, 163 So. 857, 858 (1935) (“It is well settled that at the death of the owner of any personal property the title thereto vests in his personal representative and during the administration the personal representative is entitled to the possession of the same.”).

Although Decedent’s car was an asset of the estate, it did not belong to anyone individually. Decedent’s will did not bequeath the car to anyone, and his daughter and stepson were co-equal beneficiaries under the residuary clause of the will. Therefore, neither the daughter nor the stepson had any specific right to the car, nor did either of them as individuals have a superior right against the other to prohibit use of the car. The car was an asset of the estate and subject to administration. In re Vettese’s Estate, 421 So. 2d 737, 738 (Fla. 4th DCA 1982) (holding that property improperly transferred directly to decedent’s daughters must be returned to the estate for proper administration under the terms of the will and governing law); see also § 731.201(14), Fla. Stat. (2013) (defining “estate” as “the property of a decedent that is subject to administration”); Blechman v. Estate of Blechman, 160 So. 3d 152, 157 (Fla. 4th DCA 2015) (“If the subject property will pass either intestate or by way of a will, then it is part of the decedent’s probate estate.”). Ultimate ownership of the car would not be determined until after resolution of claims, taxes, debts, expenses of administration, and other obligations of the estate, if any. It might have ended up being sold to pay the estate’s obligations, no longer belonging to the estate or any beneficiary.

*5 Id. at 1025-26; see also Sharps, 214 So. 2d at 495 (holding that while “it was not improper for” the decedent’s wife to deposit the subject check into their joint account during her husband’s lifetime, it was improper to deposit the check into the account after her husband died because “that check became an asset of the husband’s estate.”).

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In 2011 the Florida legislature passed CS/HB 325, which, among other things, amended F.S. 736.0406 to statutorily overturn a line of cases — including MacIntyre v. Wedell, 12 So.3d 273 (Fla. 4th DCA 2009) — standing for the proposition that the revocation of a revocable trust could not be challenged on undue influence grounds.

If the MacIntyre rule doesn’t make sense to you, don’t worry, you’re in good company. A lot of really smart people took one look at that decision and quickly concluded a legislative fix was needed. Here’s how the case for a statutory override was made in this Florida Bar RPPTL Section White Paper:

Due to MacIntyre, it appears that an interested person cannot successfully bring a post-death proceeding contesting revocation of a revocable trust on undue influence grounds when the trust revocation was executed by a competent settlor. Presumably, MacIntyre may be extended to bar a post-death challenge to the revocation of revocable trust based on fraud, duress, or mistake, leaving lack of testamentary capacity as the sole grounds for such a challenge.

If Florida courts do not permit a post death challenge to a settlor’s revocation of the settlor’s revocable trust, the problems appear evident. First, intended trust beneficiaries can be deprived of their inheritance, but yet have no remedy to correct the wrongdoing. If a sole intestate heir unduly influences the settlor to revoke the settlor’s revocable trust, which left everything to the settlor’s favorite charity, thereby causing the will pour over clause to fail, then the property would pass by intestacy. See § 732.513(4), Fla. Stat. The favorite charity would be denied a remedy.

Additionally, any time a party brings a trust contest challenging an amendment or a restatement of trust, the contest challenges not only the validity of the challenged part, but also the revocation of the prior part. It is inconsistent to be able to challenge the revocation of a prior amendment by challenging the subsequent amendment, but to be unable to solely challenge a revocation of the trust or a part of the trust. It also is inconsistent to allow a post death challenge to an amendment to a revocable trust, but not permit a challenge to the revocation of the trust itself.

Further, once a settlor has died, the ability to challenge a trust revocation ought to be consistent with the ability to challenge a revocation of a will, especially since revocable trusts serve as will substitutes. A revocation of a will is subject to a post death challenge on the grounds that the revocation was procured by fraud, duress or undue influence. Restatement (Third) of Property (Wills & Don. Trans.) § 4.1 (1999).

Finally, the dissents’ reasoning in both Genova opinions is persuasive. If a settlor is unduly influenced to revoke her revocable trust, then the revocation is not a free act of the settlor, but the will of another.

The Bar’s view carried the day with the legislature, which amended F.S. 736.0406 to override MacIntyre by explicitly providing that the revocation of a revocable trust could be challenged on undue influence grounds. Here’s how the statute was amended back in 2011 (pay special attention to the last sentence):

Against this backdrop you’d think the whole can-I-challenge-revocation-of-a-revocable-trust-on-undue-influence-grounds question would’ve been settled long ago … and you’d be wrong.

Case study:

Boyles v. Jimenez, — So.3d —, 2021 WL 4073391 (Fla. 4th DCA September 08, 2021):

This case involved a disbarred attorney who wrote himself into his client’s revocable trust as her successor trustee. The client revoked her trust and signed a new trust naming someone else successor trustee. After client died her former attorney challenged client’s revocation of her revocable trust on undue influence grounds.

Can you challenge the revocation of a revocable trust on undue influence grounds? Statute says YES, 4th DCA says NO.

The undue influence challenge to the revocation may or may not have had merit on the facts (we’ll never know), but no one can say it’s not a legally viable theory, right? Wrong. According to the 4th DCA, this claim is barred as a matter of law:

To the extent Boyles contends the 2015 trust’s revocation was attributable to undue influence, his argument fails as undue influence has no application to a revocable trust. Fla. Nat’l Bank of Palm Beach Cnty. v. Genova, 460 So. 2d 895, 896–98 (Fla. 1984) (a mentally competent settlor may revoke a revocable trust, regardless of whether the decision was the product of undue influence); MacIntyre v. Wedell, 12 So. 3d 273, 275 (Fla. 4th DCA 2009) (“[E]ven after the settlor’s death, the settlor’s revocation of her revocable trust during her lifetime is not subject to challenge on the ground that the revocation was the product of undue influence.”). Moreover, there is no evidence that, when signing the revocation letter a mere two days after naming Boyles as trustee, the testatrix was mentally incompetent. Although Boyles received the revocation and removal documents in April 2016, he made no effort to challenge the testatrix’s competence before her August 2017 death.

Yea, this is a problem.

The outcome of this case didn’t turn on this one paragraph, so I’m going to characterize it as obiter dicta. That being said, it’s a problem.

First, this paragraph relies on a line of case law — including MacIntyre — that was statutorily reversed 10 years ago! when F.S. 736.0406 was amended to explicitly provide that the revocation of a revocable trust could be challenged on undue influence grounds. Second, even if no one brought this legislative history up to the court, the court’s holding is contrary to the clear text of F.S. 736.0406, which the court never even mentions in its opinion. You’d think if someone was making an appellate argument about revoking a trust on undue influence grounds, a good place to start when reviewing that argument would be the controlling statute.

Anyway, I predict the Boyles opinion is going to cause headaches for judges and litigants alike. You’ve been warned.

And we have a fix … maybe?

The damage caused by the Boyles opinion won’t be as bad as initially predicted. The 4th DCA withdrew its opinion dated September 8, 2021, and issued the following opinion in its place:

Boyles v. Jimenez, — So.3d —-, 2021 WL 5822138 (Fla. 4th DCA December 08, 2021):

In this opinion the 4th DCA didn’t concede that yes, there’s a statute that says you can challenge the revocation of a revocable trust on undue influence grounds (F.S. 736.0406), but at least they cut out the portion of their original opinion that was directly contrary to the statute. The opinion now skirts the issue by upholding the underlying trial court’s order on “alternative grounds” as follows:

To the extent that Boyles contends there is a genuine issue of material fact as to whether the 2015 trust’s revocation was rendered void due to undue influence and/or incompetency, we note that alternative grounds existed for granting summary judgment. There is no dispute that the 2015 trust permits removal of a trustee by “a majority of the beneficiaries then eligible to receive mandatory or discretionary distributions of net income under this Agreement,” and Appellees established that two of the 2015 trust’s three beneficiaries supported Boyles’ removal (if the 2015 trust was deemed to have not been revoked).

Accordingly, no genuine issue of material fact existed. The trial court properly found, on summary judgment, that the testatrix revoked the 2015 trust two days after creating it or, alternatively, that a majority of the trust’s beneficiaries would remove Boyles as trustee if the 2015 trust was deemed to be the operative trust.

So yea, this is an improvement, but would it have been so bad to admit your original mistake and cite to the controlling statute?

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A central issue driving most — if not all — will or trust contests is the question of undue influence. As in, was the will or trust “procured” by undue influence, triggering invalidity under F.S. 732.5165 (for wills) or F.S. 736.0406 (for trusts).

In Florida we don’t have a statutory definition for undue influence, and the case law is so context specific and open to such a broad range of interpretation by whomever your judge (or jury) happens to be; it’s basically a “I know it when I see it” standard.

Which facts matter?

When the law’s that fuzzy, the facts really matter. In most undue influence cases that means you’ll need an expert witness to testify on your behalf. Knowing in advance which facts matter — and which don’t — for that kind of expert testimony is crucial. And if you’ll need this expert to prepare a written report in support of your case, you’re going to want to know in advance what a “good” report should look like (this is also important to know when cross examining the other’s side’s expert witness).

Assessment of Older Adults with Diminished Capacity: A Handbook for Psychologists:

One of the best resources I’ve come across for understanding undue influence from a clinician’s point of view and how to apply that analytical framework in the litigation context is a user friendly handbook developed jointly by the ABA’s Commission on Law and Aging and the American Psychological Association entitled Assessment of Older Adults with Diminished Capacity: A Handbook for Psychologists.

First, the handbook provides an excellent explanation of the leading clinical models for identifying undue influence (or the lack thereof) and presenting that forensic evidence in court. Here’s a chart from the handbook summarizing the four leading models.

And here’s an excerpt from the handbook providing context for these undue-influence models.

Undue Influence in Relationships Based on Trust and Confidence

Keeping in mind the wide variability across states, courts often require two elements to be proven in a case of undue influence involving a contract: (1) a special relationship between the parties based on confidence and trust; and (2) intentional and improper influence or persuasion of the weaker party by the stronger.

Psychologists performing assessments of undue influence must therefore determine if a confidential relationship exists that would provide the opportunity for undue influence to occur. More descriptively, undue influence occurs when a person uses his or her role and power to exploit the trust, dependency, and fear of another. Perpetrators of undue influence use this power to deceptively gain control over the decision making of the second person (Singer, 1993). Psychologists working with the older adults on cases regarding financial capacity need to be knowledgeable about undue influence and integrate that knowledge into every stage of the assessment process.

Psychological Frameworks for Understanding Undue Influence

Undue influence is an emerging area of study for psychologists and, to date, there is little published research to draw upon. Here we introduce several models, but draw upon common elements in our discussion. We present four models that have been used to understand undue influence in older adults. Margaret Singer, PhD, an early noted expert in this field originally developed her model regarding undue influence out of her work with cult victims. Subsequent clinical models, such as the Brandle/ Heisler/ Steigel Model, Blum’s “IDEAL” model, and Bernatz’s “SCAM” model draw heavily on the work of Singer and her collaborator, Abraham Nievod, PhD, JD.

Second, the handbook then goes through an entire case study demonstrating in granular detail exactly how one of these reports should be written up. That kind of specificity is gold for practitioners. Here’s an excerpt:

Writing About Undue Influence in Your Report

Undue influence evaluations include all of the information that goes into a capacity assessment (purpose of evaluation, history of problem, medical, social, occupational history, neuropsychological testing, discussion of results, and financial capacity findings), as well as a discussion of the factors that have contributed to the older adult’s susceptibility to undue influence. Copious records are gathered in these cases to develop a timeline of events and to factually support the expert’s opinion. These records may include medical, law enforcement, legal and financial, deposition testimony, estate planning documents, interviews with the victim, and collateral informants.

Trusts and estates law as we know it has been around for centuries, and for much of that time litigators who made their living in this niche usually plied their trade in a probate court. That’s still the norm, but the playing field is changing rapidly … especially on the margins.

For example, there’s the increased trend in favor of “federalized” inheritance litigation. Federal court may not always be the best venue for litigating your inheritance case, but knowing it’s an option and thoughtfully weighing the pros and cons of that forum as applied to the particular facts and circumstances of your case can be a game changer. Another option savvy trusts and estates litigators need to consider is a FINRA arbitration proceeding.

FINRA arbitration as yet another inheritance litigation venue:

If the wrongdoer at the center of your case is an unethical financial advisor, your first impulse might be to sue him or her directly. The problem with that approach is that the wrongdoer might be judgment proof (either because the value of the claim greatly exceeds the wrongdoer’s personal net worth or the wrongdoer’s assets are otherwise shielded, such as homestead property). The better approach might be to pursue claims against the wrongdoer — and his or her deep-pocket employer. In the finance world that usually implies prosecuting some form of FINRA arbitration claim.

The Schottenstein Affair:

In 2018 I reported on a high profile case out of Tampa that resulted in a $34 million FINRA arbitration award against Morgan Stanley in favor of the estate of Roy M. Speer, the co-founder of the Home Shopping Network. We now have another example of that kind of litigation, a case out of South Florida involving claims made by Beverley Schottenstein against JP Morgan and two of her grandsons, who were employed by JP Morgan as her brokers. The case resulted in a $19 million FINRA arbitration award in Ms. Schottenstein’s favor.

The FINRA arbitrators ordered JP Morgan to pay Ms. Schottenstein $4.7 million in compensatory damages, $4.3 million related to the rescission of a private equity fund, $172 thousand in costs, and one-half of her legal fees. The balance of the award was entered against Ms. Schottenstein’s grandsons individually. The point being that no matter how collectible the award against the grandsons may or may not be, a substantial portion of the award is against a deep-pocket corporate defendant that clearly has the wherewithal to pay.

At 93, She Waged War on JPMorgan—and Her Own Grandsons:

For more on the Schottenstein case there’s a website published by Cathy Schottenstein, a granddaughter and central player who’s written a book about the case. You’ll also want to read an excellent story on the case by Bloomberg reporter Tom Schoenberg entitled At 93, She Waged War on JPMorgan—and Her Own Grandsons. Schoenberg’s featured in the Bloomberg video clip above. Here’s an excerpt from his reporting on the case:

Beverley Schottenstein was 93 years old when she decided to go to war with the biggest bank in the U.S.

It was a June day, and the Atlantic shimmered beyond the balcony of her Florida condominium. Beverley studied an independent review of her accounts as family and lawyers gathered around a table and listened in by phone. The document confirmed her worst fears: Her two financial advisers at JPMorgan Chase & Co., who oversaw more than $80 million for her, had run up big commissions putting her money in risky investments they weren’t telling her about. It was the latest red flag about the bankers. There had been missing account statements. Document shredding. Unexplained credit-card charges.

Although some relatives urged Beverley not to make waves, she was resolute. What the money managers did was wrong, she told the group. They needed to pay, she said. Even though they were her own grandsons.

And pay they did. With the help of her lawyers, Beverley dragged her grandsons and JPMorgan in front of arbitrators from the Financial Industry Regulatory Authority, or Finra. She sought as much as $69 million. After testimony that spread over months and ended in January, the panel issued a swift decision in Beverley’s favor.

Finra’s arbitration process is private by design, and even when settlements are announced few of the underlying allegations are made public. In a brief ruling on Feb. 5, the panel found the bank’s J.P. Morgan Securities LLC unit and the brothers who worked there, Evan Schottenstein and Avi Schottenstein, liable for abusing their fiduciary duty and making fraudulent misrepresentations. The arbitrators also found the bank and Evan Schottenstein liable for elder abuse. It ordered JPMorgan and the bankers to pay Beverley about $19 million between them, representing damages, legal fees and the return of money invested in a private equity fund.

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A defining characteristic of inheritance litigation is that the single most important witness — the testator — is dead. And because the testator’s not around anymore to prove to us that he really was acting of his own free will when he disinherited a child, or favored a late-in-life lover, or bequeathed his estate in any other way that’s contrary to generally accepted norms, the second-hand hearsay testimony these cases turn on acts as a sort of Rorschach test. It tells us as much about prevailing social norms and the unconscious biases even the best of us — including judges — operate under, as it does about the testator’s state of mind. And that’s what makes these cases — and estate planning for unconventional clients in general — so confoundingly challenging.

It’s the perfect storm for a will contest. What do you do?

Now imagine the year is 1846. You’re an attorney practicing in north Florida, a slave-holding state. A sick old man calls for you; he doesn’t have a family in the conventional sense of the word for that time and place, but he lives with an enslaved black woman and their mixed-race children. The man tells you he wants to emancipate his partner and their children, but he’s too sick to do it on his own, so he wants to make sure they’re freed in his will after he dies. His will’s executed on January 23, 1846, and he’s dead by May of that same year. It’s the perfect storm for a will contest. What do you do?

That’s the story told by Los Angeles trusts and estates litigator Terrence M. Franklin in The 1846 Last Will of John Sutton—What’s Not So New in Will Drafting and Contests. Terry is the fourth great grandson of an enslaved black woman named Lucy Sutton, and a white farmer named John Sutton. John executed a will in 1846 that freed Lucy, their eight children, and six grandchildren.

Terry also tells his story in a video presentation that’s must-see TV for any probate attorney. And the resource page for this presentation’s packed with the kind of historical materials that are sure to warm the heart of even the fussiest history buff.

Drafting in contemplation of litigation.

There are two parts to Terry’s story that should be particularly interesting to practicing trusts and estates attorneys.

First, there’s the planning/drafting element of the story. According to Terry, at that time “in the State of Florida if you had emancipated slaves, you had an obligation to pay a thousand dollar bond for each one of them (I don’t know what the bond premium was), lest they become a burden on the people of the State of Florida, and they were required to leave the State within 30 days.”

So John’s will didn’t just emancipate Lucy and their children. His attorney, a man named Gregory Yale, drafted a mechanism into the will meant to actually get them out of Florida and to freedom.

Article Fourth [of the will] said that “I will and bequeath unto my trusty friend and relation, William R. Adams, formerly of Ware County, Georgia and now of Duval County, Florida, all of the above-named property, the said slaves, the future increase of the slaves, all the cattle, all the hogs, et cetera, on the following conditions. Namely, that upon my death or soon thereafter as practicable, the said William R. Adams shall move the said slaves and the increase thereof to a jurisdiction outside of the State of Florida, either Ohio, Indiana or Illinois where they can enjoy their freedom.” …

So the will established that William Adams was to carry out the responsibility of seeing to it that the family was to get there, but it was only on condition that he saw to it that that happened, and failing that, he was required to personally take the property because John trusted that William would see to it that the family made it to Illinois as required.

One of the most important elements of any estate plan is deciding who you’re going to rely on to carry out your wishes after your dead. John Sutton placed a huge amount of trust in his “friend and relation” William Adams. So did William come through? Big time, and in many ways he’s the real hero of this story.

So the document that was found in Southern Illinois specifically described the fact that John Sutton had created this document and that he had named a person named William Adams to be his executor. William Adams had seen to it that the family had made their way from Jacksonville, Florida, to Illinois. And by that time he was able to proclaim them to be free and able to live in perfect freedom. …

Now, bear in mind that … the family packed up all their belongings and made it from Jacksonville, Florida, on to boats I think through Savannah, around the tip of Florida, through New Orleans, up the Mississippi to Illinois where they ended up by December of … 1846. …

And as I said, William Adams who was the named executor of the will who had received the property, that is, my ancestors in trust to make sure that he saw to it that they made their way to Illinois, did in fact comply with his obligations, travelling with the family to Illinois which is where he recorded the copy of the will that I originally heard about, and declared them to be forever free.

The Will contest.

Not surprisingly, the will was contested. This is the second part of the story that should be of particular interest to practicing probate attorneys. John Sutton’s younger brother, a man named Shadrack, challenged the will on grounds that would be familiar to any of us today:

Shadrack alleged that he was informed and believed that “Sutton was at the time of the creation of the document very aged, infirm, bodily and mentally, and that he was then and had been for years wandering in his intellect and subject to the most childish and extravagant superstitions, that he was under the influence of ardent spirits, (he had been plied with alcohol) that his credulity and imbecility made him an easy dupe to the artifices of designing persons who represented to him that the families of children heretofore mentioned were not his offspring—were his offspring and when in fact, they were not his offspring.” …

The petition went on to say, “Your petitioner further showeth unto your Honor that said John Sutton being of sound mind and disposing memory aforesaid was incompetent to make any disposition of the property by will according to the law and that the instrument of writing which he has called his last will is null and void.” Similar to the language that we’d have today in a will contest, the same allegations, undue influence, fraud, lack of capacity.

In her book Fathers of Conscience: Mixed Race Inheritance in the Antebellum South, law professor Bernie Jones studied antebellum will contests in which Southern white men, typically widowed or single, left wills giving property or freedom to women of color and their mixed-race children. Prof. Jones found that the wills were often contested by white relatives claiming that the men were mentally incompetent or were unduly influenced by “jezebels” who used their feminine wiles to take advantage. It was up to the judges ruling on those contests to decide whether it was more important to follow the terms of the wills or to throw them out since they undermined social norms built on the premise that formalized economic and familial relationships between masters and slaves weren’t just distasteful, but illegal.

And for an eerily similar case underscoring the forces arrayed against Lucy and her children in 1840s Florida, you’ll want to read Florida’s Forgotten Execution: The Strange Case of Celia, which tells the story of another Duval County probate case involving another black family emancipated in the 1840s and the horrific ordeals they endured (including re-enslavement). This case was adjudicated by the same probate judge who adjudicated Sutton’s will, Judge William Crabtree, and involved an appearance by the same lawyer who drafted Sutton’s will, Gregory Yale (this time representing family members opposed to emancipation).

Against this backdrop, if you were advising William and Lucy would you tell them to role the dice on a trial in Florida or get out of town and take their chances in a free state like Illinois? (I know what I would have advised.) They apparently opted for the latter course of action; William, Lucy, her children and grandchildren were all long gone by the time the will contest was tried.

And how did that trial turn out? To my surprise, John’s will was upheld.

Well, there was a final decree that was issued on March 10, 1847 by Judge Crabtree. And in his final decree, which you can’t read very well, but Judge Crabtree upheld the will and ordered Shadrach to pay $28.08 in court costs.

But think about this, if the will had been overturned could Shadrack have sued William for some kind of civil theft in connection with helping Lucy and her children to escape? And as fugitive slaves, Lucy and her children would have lived under constant fear of being dragged back to Florida. The stakes for those involved couldn’t have been higher.

Bending the arc of history towards justice.

Terry Franklin concludes his article by reflecting on the people who’ve helped him uncover his family’s story and his great, great, great, great grandmother’s journey to freedom, including the generous pro bono assistance of Florida trusts and estates lawyers like Mike Simon and his colleagues at Gunster. Terry also reflected on the importance of “the context of history” to the work we do, not just as attorneys, but as citizens with a personal stake in bending the arc of history towards justice. I can’t say enough good things about Terry’s article, it’s a must read for any Florida probate attorney.

What has been miraculous to me is that people have opened their arms to me and helped to support in telling this story, including the Gunster firm. After I returned back to the ACTEC meeting after Jeffrey and I went to see the will, one of our colleagues there, Mike Simon, actually said to me, you’ve got to get your hands on those files because now there’s a rule in the State of Florida that says that once files have been digitized, they can be destroyed. So they went to court for me, pro bono, and got me ownership of those original documents, those 46 pages of documents that connect us to our history.

What I’ve learned in this process as I began to dig in further and do my own research and fill out the contours of the novel that I’m trying to write is a little bit about the importance of history. I’ve always thought of history as something that famous people did, or presidents or kings and Queens, or even individuals who did something unusual and extraordinary like Harriet Tubman who now have become part of our history.

But what I realized as I read these documents and connect to my ancestors is that we’re all living in the context of history. That everyday we are taking actions and steps that are part of history. That our descendants will be looking back to us to explain. I know that I stand on the same ark of history with John and Lucy and their children. And with my descendants who are yet to come. And I think the challenge for us, the question for us, is what are we each individually doing to bend that arc of history towards justice.

And I think that’s my message to you today, is that we can talk about the law. We can talk about the facts. We can talk about the books. We can talk about the history. But what is it that we are doing to make life better for those around us, and for our generations yet to come.

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The U.S. has the world’s highest rate of children living in single-parent households. Against this backdrop it shouldn’t come as a surprise to anyone that questions about paternity are a common occurrence in probate proceedings, especially when the decedent dies intestate.

Now the bad news, as I’ve previously reported if you happen to have been age 22 or older in 2009 (i.e., age 34 or older today) you are forever time barred from adjudicating paternity in a Florida probate proceeding …  even if you have irrefutable DNA evidence backing you up. As a practical matter, this means that for middle aged adults (i.e., the most common age group for surviving children in most probate proceedings) all paternity actions are now time barred in probate. And that means there’s going to be a lot of pressure to find workarounds in those cases where paternity is factually undeniable. The “written acknowledgement” route for establishing paternity will seem like an easy answer. As demonstrated in the White v. Marks case below, it’s not.

Case study: White v. Marks, — So.3d —-, 2021 WL 1216210 (Fla. 5th DCA April 01, 2021):

If a man dies intestate his out-of-wedlock children or descendants are determined by applying one of the three tests found in F.S. 732.108(2). The first two tests are objective “yes” or “no” questions, that are fairly easy to apply. Did the decedent marry your mother, if yes, he’s your father. Was the decedent’s paternity previously established in a paternity adjudication, if yes, he’s your father (no matter what the DNA says).

By contrast, the third “written acknowledgement” test for paternity is open ended, leaving plenty of room for interpretation. The third test is found in F.S. 732.108(2)(c), which provides as follows:

The person is … a descendant of his or her father and is one of the natural kindred of all members of the father’s family, if: … (c) The paternity of the father is acknowledged in writing by the father.

Is any written acknowledgment of paternity enough? NO

In the real world, the undefined and often shifting emotional ties between men and the children of the women they’ve shared their lives with often result in a paper trail that’s equally ambivalent. If this informal paper trail is going to be used as a basis for establishing paternity, the decedent’s expressed intent needs to be beyond question — passing, contradictory references won’t suffice. Here’s the operative test:

In interpreting the prior version [of the statute], the Florida Supreme Court found that an informal writing was sufficient to meet the statute, provided the acknowledgment “directly, unequivocally and unquestionably acknowledges the paternity of the illegitimate child, in such terms and under such circumstances as may ‘be construed as a formal acknowledgment of parenthood.’” In re McCollum’s Est., 88 So. 2d 537, 540 (Fla. 1956) (quoting In re Horne’s Est., 149 Fla. 710, 7 So. 2d 13 (1942)).

Will an unsigned birth certificate suffice? NO

In this case the decedent appears on the contestant’s birth certificate — even though all sides concede he was not her biological father.

Ms. Marks’ mother, Lynda Vitale, had conceived Ms. Marks with the assistance of a sperm donor and was pregnant at the time she and Mr. Marks met. Despite the fact that Mr. Marks was not her biological father, his name was entered on Ms. Marks’ birth certificate. Ms. Marks’ mother had explained to her that to avoid the social stigma attached to out-of-wedlock births where the father was listed as “unknown,” Mr. Marks had agreed to be listed as the father.

But more importantly, the decedent didn’t sign the birth certificate. In the absence of a signature, the document is disqualified as a matter of law.

Ms. Marks has conceded on appeal that the trial court erred in finding the birth certificate constituted a written acknowledgment of paternity. The birth certificate was not signed by Mr. Marks and without the accompanying required written consent, could not qualify as written acknowledgment under the statute.

Does calling you my “adopted daughter” in my Will or Pocket Planner suffice? NO

The decedent refers to the contestant as his adopted daughter in his Will — even though all sides concede he never actually adopted her — and the reference was made for purposes of cutting her out.

Mr. Marks passed away in 2018, and his will was submitted to probate. The will devised his estate to Joseph White and Darla Hall in equal shares and expressly did not provide for Ms. Marks, stating: “I have also intentionally made no provision under this will for my adopted daughter Samantha Nicole Marks, although it is my desire that Joseph White make appropriate provisions for her.”

The decedent also made some reference to the contestant in his “pocket planner” that arguably evidenced an acknowledgment of paternity. So was this enough? Nope, especially when viewed in the context of a relationship that was marked by a lack of contact and emotional and financial support for most of the decedent’s life.

Ms. Marks readily admits that Mr. Marks was neither her biological nor adoptive father. Mr. Marks was well aware that he was not her biological father, as Ms. Vitale was pregnant before they met, which presumably explains why he referred to Ms. Marks as his adopted daughter, rather than his daughter. Because it is undisputed that an adoption did not occur, the references in the will and pocket planner are only understandable as descriptive, rather than direct, unequivocal acknowledgments of paternity. See McCollum’s Est., 88 So. 2d at 540.

It is undisputed that Mr. Marks did not undertake parental responsibilities during Ms. Marks’ life. Although Mr. Marks dated Ms. Vitale while Ms. Marks was an infant, he and Ms. Marks did not meet again until she was in her twenties. Nor did Mr. Marks provide her with any financial assistance throughout her life. Such behavior is consistent with the testimony of Ms. Marks that Mr. Marks agreed to have his name placed on the birth certificate to avoid having “unknown” listed as the father.

Further, Ms. Marks’ name was misstated under the will, and Mr. Marks directed that she not receive any devise from the estate. When considered with the lack of contact and emotional and financial support, the equivocal nature of the references becomes apparent. Accordingly, we find that the references are insufficient to create a legal relationship.

So what’s the takeaway?

Again, for reasons I’ve previously reported if you get a call from someone age 22 or older in 2009 (i.e., age 34 or older today) who wants to establish paternity in a probate proceeding, that person’s claim is now time barred. The “written acknowledgement” route for establishing paternity will seem like an easy workaround. It’s not.

Unless you have something in writing — signed by the decedent — that “directly, unequivocally and unquestionably acknowledges the paternity of the illegitimate child, in such terms and under such circumstances as may be construed as a formal acknowledgment of parenthood,” you’re not doing anyone any favors by raising false hopes.