Sometimes courts will ignore DNA test results as a matter of law [click here, here]. And then there are those cases where who wins or loses can turn on a DNA test. Not surprisingly, if the estate is being litigated and a DNA test could help one side win, the other side may not voluntarily hand over a DNA sample. In those cases you’ll need a court order compelling the DNA test.

Until now Florida law’s been very muddy on exactly what you need to do to get a court order compelling a DNA test in probate litigation. Into this gap stepped the 2d DCA, delivering an excellent road map for Florida probate lawyers confronted with this problem.

DNA Testing & Probate Litigation: 2d DCA’s Five-Step Road Map:

  1. Frame the issue as a discovery request to test human bodily fluids
  2. Rely on Civil Procedure Rule 1.360 (Examination of Persons)
  3. Satisfy rule 1.360’s “in controversy” requirement
  4. Satisfy rule 1.360’s “good cause” requirement
  5. Satisfy rule 1.360’s “balancing-the-interests” requirement

Doe v. Suntrust Bank, — So.3d —-, 2010 WL 323031 (Fla. 2d DCA Jan 29, 2010):

In the linked-to opinion a guardian ad litem sought to compel the decedent’s two legitimate children to provide a DNA sample (via a buccal swab) to establish the paternity of “Madeline Doe”: a nine-year old out-of-wedlock child whose mother was claiming she was the decedent’s child. The 2d DCA framed the issue this way:

We view [the] motion for DNA testing as a discovery request and the trial court’s order as one compelling discovery.

Having framed the issue as a discovery request the court then tells us what discovery rule we need to rely on: Civil Procedure Rule 1.360 (“Examination of Persons”). By the way, in almost every appellate decision involving DNA testing in probate litigation the lawyers and the trial court always get this wrong, mistakenly focusing on the wrong discovery rule or failing to even state exactly which discovery rule they’re operating under (probably because they’re not sure). No one should repeat that mistake after reading this opinion.

Procedurally, this case is similar to Wicky v. Oxonian, 34 Fla. L. Weekly D1612 (Fla. 2d DCA Aug.14, 2009). In Wicky, the personal representative of an estate pursuing a wrongful death claim filed a discovery request seeking permission to test an existing sample of the defendant’s blood. The personal representative’s motion did not identify the rule of civil procedure that authorized the testing, although it mentioned rule 1.280, the general discovery rule. The defendant thought the request was made under rule 1.350, which addresses the production of documents and things. This court concluded that neither rule governed the request, and that “a request to test human bodily fluids in a civil action must satisfy the requirements of rule 1.360, ‘Examination of Persons.’ “ Id. at D1612.

The 2d DCA then did something you don’t often see. It went on to explain in detail what kind of evidence a working probate lawyer would need to put in front of his or her probate judge to satisfy all of rule 1.360’s requirements as applied to DNA testing in a contested probate proceeding. For those of us in the trenches this kind of guidance is pure gold, so I’m providing all of it. It’s a relatively long excerpt but well worth reading.

[“in controversy” requirement]

First, we note that the issue of whether Madelin is Doe’s child, and thus a beneficiary of his trusts, is clearly at the heart of this litigation. However, thus far, it appears that the only pleadings suggesting she may be his child are the Trustee’s verified complaint, which simply attests to the Trustee’s knowledge that Madelin claims to be Doe’s child and her verified motion to compel testing which states only that she “maintains she is a child born out of wedlock” to Doe. We believe something more is required, for example, an affidavit from Madelin’s mother alleging paternity and setting forth facts establishing a reasonable possibility of the requisite sexual contact with Doe. See § 742.12(2) (requiring a sworn statement or declaration under penalty of perjury alleging paternity and setting forth facts establishing a reasonable possibility of the requisite sexual contact between the parties as a perquisite to obtaining an order for scientific testing). Such an affidavit would satisfy the requirement that the subject matter of the test be “really and genuinely” in controversy. See Schlagenhauf, 379 U.S. at 119.

[“good cause” requirement]

Madelin will also have to demonstrate “good cause” for her request that Adrian and Evelyn be required to provide a buccal swab sample for testing. In the typical paternity action, a compelled DNA test is dispositive of the issue in controversy, and thus good cause for the test is established. See Wicky, 34 Fla. L. Weekly at D1613. This case is not, however, a typical paternity case because it is the legitimate children of the deceased putative father who are being asked to submit a sample of their DNA for testing. Under these circumstances, we believe two considerations are important in determining the existence of good cause. First, it would seem appropriate that Madelin provide some evidence that a comparison of her DNA with the DNA of Doe’s legitimate children could produce a result that would tend to prove or disprove the existence of a genetic link between Doe and Madelin. Second, it would also seem appropriate to require that she make some showing of need. For example, in the arguments presented to this court, Madelin and the Trustee have indicated that Doe was cremated, thus eliminating the possibility of any comparison with a sample derived from his remains. As far as we can tell, this fact was not presented as evidence in the trial court. Likewise, while the Trustee’s verified complaint suggests that no official documentation exists that would allow Madelin to establish that Doe is her father, it seems reasonable to require a more definitive statement to that effect, perhaps from Madelin’s guardian ad litem.

[“balancing-the-interests” requirement]

Finally, as we explained in Wicky, in all discovery matters the competing interests of the parties must be balanced. 34 Fla. L. Weekly at D1613. Doe did not name specific beneficiaries in his trusts; instead he instructed that the assets in the trusts be divided among his children. Other language in the trusts indicates he contemplated the possibility of having children other than Adrian and Evelyn. Given that this is an action to determine the beneficiaries of his trusts, consideration should be given to effectuating his intent as expressed in the trusts. As for Madelin, if she is in fact Doe’s child, her rights with respect to the trusts are equal to those of Evelyn and Adrian. Further, her interests are akin to those of an out of wedlock child seeking to share in the intestate estate of a parent. Florida recognizes the right of an out-of-wedlock child to share in a parent’s estate. See § 732.108(2). Florida also recognizes the right of a child born out of wedlock to establish paternity after the death of the father. See § 732.108(2)(b). For that right to be meaningful, the child must have a fair opportunity to prove that the deceased is her father. What is fair may vary from case to case, but any evaluation should take into account the heightened burden of proof imposed on out-of-wedlock children who seek to establish paternity after the death of the putative father. See Berkey v. Odom (In re Estate of Odom ), 397 So.2d 420 (Fla. 2d DCA 1981) (holding that in an action to establish paternity after the death of the father, proof of paternity shall be by clear and convincing evidence), disapproved on other grounds, Wilson v. Scruggs ( In re Estate of Smith ), 685 So.2d 1206 (Fla.1996).

On the other hand, Adrian and Evelyn have a privacy interest they seek to protect. In considering the weight to afford that interest, several factors are important. First, the intrusion is minimal-the test Madelin seeks is noninvasive, and the purpose of the test is limited to comparing her DNA to theirs. Second, rule 1.360(a)(3) provides that the court, upon request, may establish protective rules governing an examination. Thus far, Adrian and Evelyn have only asserted a generalized complaint that submitting a DNA sample invades their privacy, however, if they are able to articulate any specific privacy concern, they have the ability to ask the court to fashion protective rules to address that concern. Third, Adrian and Evelyn have affirmatively denied that Madelin is Doe’s child, and they have actively opposed all efforts by her or Maria to prove that they are his children. Having taken that position, it is questionable whether they should be permitted to withhold the evidence that may put Madelin’s claim and their defense to rest once and for all. They have the alternative of conceding that Madelin is a beneficiary should they wish to avoid the test.

Morrison v. West, — So.3d —-, 2010 WL 532792 (Fla. 4th DCA Feb 17, 2010)

The linked-to opinion above is the last gasp of bitter litigation swirling around the $100 million estate of Palm Beach socialite Pedro Morrison, who died in 2003 [click here, here].  This time around the issue was whether North Carolina sole practitioner William E. West could keep his million dollar legal fee. His former client, the decedent’s widow – Carla Morrison, fired him the day after he settled her case in mediation.

At first things looked good for West. Here’s how the Palm Beach Post reported on his trial-court win in Morrison widow miffed:

The Palm Beach County Circuit Court judge says Morrison “behaved despicably” toward her former lawyer, North Carolina attorney William E. West, and must pay his $1 million legal fee.

Ouch! What would prompt [Judge] Winikoff to call Morrison’s testimony and demeanor “outrageous?”

How about Morrison firing her lawyer the morning a mediation settlement he hammered out was to be filed with the court. Or Morrison’s refusal to pay West his $1 million legal fee, as she had agreed. Or Morrison’s claim she needed the $1 mil for living expenses – then later admitting she spent the cash on a a bracelet worth between $140,000 and $250,000.

That was then, this is now. On appeal West lost it all. And all because he didn’t want to spend a few bucks on associating with a Florida lawyer and getting admitted pro hac vice.

The supreme court explained its holding in [Chandris, S.A. v. Yanakakis, 668 So.2d 180 (Fla.1995)], as supporting policy concerns related to protection of the public. The prohibition on the unauthorized practice of law in Florida derives not only from the Rules of Professional Conduct, but also from statutory law. The court in Chandris noted that section 454.23, Florida Statutes (1983), provided that “[a]ny person not licensed or otherwise authorized by the Supreme Court of Florida who shall practice law … shall be guilty of a misdemeanor of the first degree.” FN2 Relying on long established precedent requiring admission to the bar, the court said:

Florida has a unified bar, and all persons engaged in the practice of law here must be members of that bar. Petition of Florida State Bar Ass’n, 40 So.2d 902 (Fla.1949). More than thirty years ago, we enunciated why we prohibit those who are not members of The Florida Bar from engaging in professional activities in Florida which are within the boundaries of the practice of law. This Court noted in State ex rel. Florida Bar v. Sperry, 140 So.2d 587, 595 (Fla.1962), rev’d on other grounds, 373 U.S. 379, 83 S.Ct. 1322, 10 L.Ed.2d 428 (1963), that:

The reason for prohibiting the practice of law by those who have not been examined and found qualified to practice is frequently misunderstood. It is not done to aid or protect the members of the legal profession either in creating or maintaining a monopoly or closed shop. It is done to protect the public from being advised and represented in legal matters by unqualified persons over whom the judicial department can exercise little, if any, control in the matter of infractions of the code of conduct which, in the public interest, lawyers are bound to observe.

Chandris, 668 So.2d at 184. Despite the experience and qualifications of the unlicensed lawyer in Chandris, the court held that he could not recover under a contingent fee contract.

In a footnote, the court conceded that while a member of The Florida Bar may not claim attorney’s fees under a void contingent fee agreement, a Florida Bar member may still be entitled to the reasonable value of his or her services in quantum meruit. Id. at 186 n. 4. While West seeks to expand this footnote to claim entitlement to his quantum meruit fee, his interpretation is clearly wrong. While a contract between a Florida Bar member and a client might be illegal, the Bar member’s provision of legal services in Florida is not illegal. In contrast, the provision of legal services by a non-Florida Bar member is illegal. See § 454.23, Fla. Stat. To award fees for illegal activities is contrary to public policy. See Spence, Payne, Masington & Grossman, P.A. v. Philip M. Gerson, P.A., 483 So.2d 775 (Fla. 3d DCA 1986).

*     *     *     *     *

West argues that he anticipated securing a Florida attorney but simply did not do so before the matter settled in mediation. Although in September 2004 West drafted a motion for appearance pro hac vice and forwarded it, and a proposed order for admission, to McDonald & Crawford, that Fort Lauderdale firm was never actually retained by Morrison. After an e-mail from the firm to West discussing its fee, the Florida firm did not have further conversations with West until well after the mediation. In fact, West did not even seek pro hac vice admission to present the settlement agreement to the probate court for approval.FN4 This can hardly be deemed a technical error when he was admitted pro hac vice in another case involving Morrison and the trust right before he was terminated by Morrison. He knew that such admission was necessary. We can only assume that [West] chose to ignore [getting admitted pro hac vice] to avoid the payment of a fee to McDonald & Crawford.

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An overarching theme of Florida’s probate code is the tension between basic due-process rights on the one hand and Florida’s strong public policy favoring the speedy administration of estates on the other. Florida’s 2-year non-claim statute [F.S. 733.710] epitomizes this tension because of its simplicity and utter disregard for equitable considerations. When it comes to unsecured creditors, after 2 years it’s game over . . . period, no exceptions.

Case Study

In re Estate of Harrison, Slip Copy, 2010 WL 503077 (Bankr.M.D.Fla. Jan 29, 2010)

In the linked-to opinion the unsecured probate creditor –  UK insurance giant Lloyd’s of London – cried foul when the debtor’s son strategically waited two years and one day! to commence his father’s probate proceeding . . . thereby automatically triggering application of Florida’s 2-year non-claim statute . . . thereby automatically barring all of his father’s unsecured creditor claims, including Lloyd’s. Lloyd’s argued that the debtor’s son – the designated personal representative under his father’s will – had an affirmative duty to advise his father’s creditors that they needed to open a probate proceeding in Florida and file a claim within two years of the debtor’s date of death.

While a personal representative does have affirmative duties to estate creditors after he’s appointed, those duties don’t apply before he’s appointed. This was the hole in Lloyd’s argument, and why the estate won this one. Here’s how the judge summarized the key legal issues:

As a matter of law, Randolph Harrison, as the beneficiary and named personal representative, had no affirmative or fiduciary duty before his appointment as personal representative. Florida Statute 733.601 is clear that a personal representative’s duties commence upon appointment. Prior to his official appointment, Randolph Harrison had no affirmative duty as a fiduciary; he had no fiduciary relationship with the English Creditors; and he had no duty to notify them of the Florida legal structure or their opportunity to open a probate estate or file a claim. The only allegation against Randolph Harrison is that he kept his silence for two years and a day. The Court holds as a matter of law that that is not a breach of any duty. Additionally, his silence about Florida law is not fraud. There is no statutory or common law requirement to urge a creditor, who obviously knew about the death of its obligor and who apparently knew about assets in Florida, to open probate in Florida. .  .  .  It was incumbent upon the English Creditors to familiarize themselves with Florida law, open a probate and file a claim. For whatever reason, the English Creditors elected not to do so.

There was simply no fraud in Randolph Harrison waiting to open the Florida probate. There is absolutely no requirement under probate law that creditors of a decedent be paid before beneficiaries receive anything. In fact, the statutory scheme suggests the opposite. The whole substance of having a non-claims bar like Section 733.710 is to allow a beneficiary to receive assets free of creditor claims after the two-year period. For a beneficiary to take advantage of that legal structure is not fraud.

Lesson learned?

If you’re going to try to run the 2-year non-claim statute clock on your creditors, don’t even open the estate. Do nothing. Unless a creditor takes the extraordinary step of commencing a probate proceeding just to collect on his debt, the estate wins by default.

Here’s something you don’t see every day: an acknowledgment by a credible source usually not associated with the “liberal media” (Rupert Murdoch’s the WSJ) reporting that repeal of the estate tax is not a free ride, there are consequences: taxes will be shifted from a wealthier segment of the U.S. population to a less wealthy segment of the U.S. population. As reported by the WSJ in Why No Estate Tax Could Be a Killer:

Congress shocked everyone by letting the estate tax lapse on Jan. 1.

Now, here is the real stunner: For many, the lapse actually will raise taxes.

Under last year’s law, estates up to $3.5 million, or $7 million for married couples, were exempt from federal tax. This year that law has been replaced by a fiendishly complex levy raising taxes on the assets of those with little as $1.3 million. It will affect the heirs of at least 50,000 U.S. taxpayers who die this year, whereas the old law affected only about 15,000 estates a year, according to the Tax Policy Center.

“The new system is far worse for many people who have assets between $1.3 million and $3.5 million,” says veteran estate lawyer Ronald Aucutt, of McGuire Woods.

The linked-to article does a good job of walking readers through a simple hypothetical demonstrating how differently this year’s and last year’s regimes treat the same asset held by two fictional widows: Ms. Bentley has total assets of $20 million, while Ms. Subaru’s total is $2 million. Guess who is paying more taxes this year?

Burgess v. Prince, — So.3d —-, 2010 WL 199422 (Fla. 2d DCA Jan. 22, 2010)

Access to trust funds is usually a zero-sum game: If I pay trust funds to one party, there’s less money for everyone else. We usually think of this problem in terms of conflicting claims between trust beneficiaries: if I pay $$ to beneficiary “A,” there’s less $$ for beneficiary “B.”

So is there a way to boost payments to beneficiary A without diminishing beneficiary B’s share of the trust? Yes!

One option is to “grow the pie,” so there’s more to go around for everyone [click here]. Another option is to pay beneficiary A to do some of the trust-administration work being done by third parties. As long as beneficiary A can do the job, this transaction is an economic wash as far as beneficiary B is concerned. So why not “keep the money in the family” by paying a trust beneficiary – rather than an unrelated third party – to do the work? Professionals who take the time to understand this opportunity can become heroes to their trust-beneficiary clients. The linked-to opinion is an example of this second option in action.

Trust beneficiary as Business Manager:

In the linked-to opinion the trust owned Salt Creek Art Works, a large art studio and gallery. One of the trust’s beneficiaries was serving as trustee of the trust and business manager for Salt Creek Art Works. The trust agreement provided that a beneficiary may not receive compensation for serving as trustee, but there was nothing stopping her from getting paid for the work she did as business manager. In fact, the trust agreement specifically authorized a trustee/beneficiary to hire herself to do any work the trust required.

When the trustee/beneficiary was removed as trustee she was also stripped of her business-manager fees. On appeal the 2d DCA reversed this ruling by simply applying the clear text of the trust agreement.

Section 6.2 of the Trust provides that a beneficiary may not receive compensation for serving as Trustee:

Any Trustee, whether an individual or corporate trustee, who may serve under the Trust shall be entitled to receive compensation for its services as Trustee in accordance with its schedule of rates in effect at the time the services are rendered, including minimum fees and additional compensation for special investment and interests in a closely-held business. Any Trustee who is also a beneficiary under the Trust shall serve without compensation.

(Emphasis added.) Our record demonstrates, however, that Ms. Burgess did not receive compensation for her service as Trustee. Rather, she received a modest monthly payment from the Trust for operating the ongoing business of Salt Creek Art Works. The payments she received were not contrary to the terms of the Trust. Indeed, the Trust allows compensation to a Trustee serving in other capacities. Section 6.4 empowers the Trustee:

[T]o employ accountants, actuaries, appraisers, attorneys, brokers, building contractors, custodians, investment managers, realtors, and other agents including any Trustee, if such employment be deemed necessary or desirable and to pay reasonable compensation for their services without diminution of any fiduciary’s commissions….

(Emphasis added.)

Finally, section 6.5 allows the Trustee to compensate a beneficiary for business management duties:

To determine in his or her discretion the manner and extent of his or her active participation in the business, and to delegate all or any part of his or her power to supervise and operate to such person or persons as he or she may select, including any associate, partner, officer or employee of the business.

To hire and discharge officers and employees, fix their compensation and define their duties; and to employ, compensate and discharge agents, attorneys, consultants, accountants and such other representatives as the Trustee may deem appropriate; including the right to employ any beneficiary or individual fiduciary in any capacity.

(Emphasis added.)

Relying on the plain language of the Trust document, we must conclude that the trial court erred in ruling that Ms. Burgess could not be compensated for managing Salt Creek Art Works.

As reported by Forbes in States Race To Clean Up Congress’ Estate Tax Mess, several states – including Florida – aren’t waiting around for Congress to get its act together on the estate tax front.

While Congress dilly dallies, the states are racing to come to the aid of families whose estate plans have been thrown into disarray by the Jan. 1 lapse of the federal estate tax. That lapse could, among other things, lead to the unintended disinheritance of spouses, which could in turn lead to expensive legal fights among family members and, ultimately, the impoverishment of some widows or widowers. It could also, ironically, force some families to pay extra state estate taxes.

Legislators in a handful of states, led by Virginia [click here], have already introduced legislation to try to head off such bad results. Virginia’s House of Delegates passed its “emergency” bill unanimously Tuesday and the state’s Senate is expected to take it up immediately [click here]. Similar bills are pending in Maryland, Nebraska, South Dakota, Tennessee and Washington. Other states, including Florida and New York, have somewhat different legislation pending.

By the way, Forbes has a very cool interactive map showing state-level estate tax laws for 2010 [click here].

Florida’s Statutory Fix

At this year’s Heckerling conference one of the giants of the Florida trusts and estates bar, Bruce Stone, reported on Florida’s statutory fix (CS/HB 361) in an excellent presentation entitled The Clock Struck Midnight: Now What Do We Do?  You can track the status of CS/HB 361 here. Full text of the bill is here.  The following is the proposed trust-code provision as reported by Bruce:

The following is a draft as of noon Monday, January 18, 2010, of a statute to be proposed for adoption in Florida, addressing the uncertainties and potential liabilities of fiduciaries caused by repeal of the estate and generation-skipping transfer taxes. The proposed statute may be submitted to the Florida legislature for its regular session which convenes on March 2, 2010.

Section I – section 736.04114 shall be created as follows:

736.04114 Limited judicial construction of irrevocable trust with federal tax provisions.–

(1) Upon the application of a trustee or any qualified beneficiary of a trust, a court at any time may construe the terms of a trust that is not then revocable to define the respective shares or determine beneficiaries, in accordance with the intention of the settlor, if a transfer occurs during the applicable period and the trust contains a provision that:

(a) includes a formula devise referring to the “unified credit”, “estate tax exemption,” “applicable exemption amount,” “applicable credit amount,” “applicable exclusion amount,” “generation-skipping transfer tax exemption,” “GST exemption,” “marital deduction,” “maximum marital deduction,” or “unlimited marital deduction;”

(b) measures a share of a trust based on the amount that can pass free of federal estate tax or the amount that can pass free of federal generation-skipping transfer tax;

(c) otherwise makes a devise referring to a charitable deduction, marital deduction, or a similar provision of federal estate tax or generation-skipping transfer tax law; or

(d) appears to be intended to reduce or minimize federal estate tax or generation skipping transfer tax.

(2) For the purpose of this section:

(a) “applicable period” means a period beginning January 1, 2010 and ending on the earlier of (i) December 31, 2010, or (ii) the date that an act becomes law that repeals or otherwise modifies or has the effect of repealing or modifying Section 901 of The Economic Growth and Tax Relief Reconciliation Act of2001.

(b) a “transfer occurs” when an interest takes effect in possession or enjoyment.

(3) In construing the trust, the court shall consider the terms and purposes of the trust, the facts and circumstances surrounding the creation of the trust, and the settlor’s probable intent. In determining the settlor’s probable intent, the court may consider evidence relevant to the settlor’s intent even though the evidence contradicts an apparent plain meaning of the trust instrument.

(4) This section does not apply to a transfer that is specifically conditioned upon no federal estate or generation skipping transfer tax being imposed at the time of the transfer.

(5) Unless otherwise ordered by the court, during the applicable period and without court order, the trustee administering a trust containing one or more provisions described in subsection (1) may (a) delay or refrain from making any distribution, (b) incur and pay fees and costs reasonably necessary to determine its duties and obligations (including compliance with provisions of existing and reasonably anticipated future federal tax laws), and (c) establish and maintain reserves for the payment of these fees and costs and federal taxes. The trustee shall not be liable for its actions as provided in this subsection made or taken in good faith.

(6) The provisions of this section are in addition to, and not in derogation of rights under the Florida Trust Code or the common law to construe a trust.

Foster v. Estate of Gomes, — So.3d —-, 2010 WL 322170 (Fla. 5th DCA Jan. 29, 2010)

Prenuptial agreements limiting themselves solely to spousal inheritance rights are governed by F.S. § 732.702. All other prenuptial agreements are governed by the more burdensome requirements of Florida’s Premarital Agreement Act, found at F.S. § 61.079.

Generally speaking, inheritance-rights prenup’s are a whole lot simpler to draft, less costly for clients, and easier to enforce. Why? One big reason is that these agreements (if executed prior to the marriage) don’t require prospective spouses to go through all of the financial disclosure normally needed to make prenup’s governed by Florida’s Premarital Agreement Act stick. This distinction is often lost on attorneys used to litigating prenup’s in divorce proceedings, and was at the heart of the court’s ruling in the linked-to opinion.

Prior to their marriage, Lora Foster and Edward Gomes entered into an antenuptial agreement in which Ms. Foster waived all right to Mr. Gomes’s property, including her right to an elective share. Although not required by Florida law, Mr. Gomes disclosed the bulk of his assets when they entered the agreement, omitting one asset valued at approximately $10,000.

*     *     *

Florida law does not require prior disclosure of assets for an antenuptial agreement. § 732.702(2). Recognizing this, Appellant argues that a disclosure, once made, albeit voluntarily, if inaccurate or fraudulent, invalidates the antenuptial agreement, citing Stregack v. Moldofsky, 474 So.2d 206 (Fla.1985) (Ehrlich, J., dissenting). Unfortunately for Appellant, that dissenting opinion has not garnered a consensus either within the Florida Legislature or Florida courts. We prefer, instead, to rely upon the binding majority opinion which stated, “[n]ondisclosure, whether fraudulent or not, is precisely what the legislature intended to eliminate from consideration on the validity of antenuptial agreements.” Stregack, 474 So.2d at 207. In so holding, the law continues to accommodate the desires of older Florida residents to marry again without risking an unwanted disposition of a lifetime’s assets due to a partial disclosure. See id.

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We’ve all been there: you’ve been locked in mediation for hours and an unreasonable/ irrational litigant refuses to settle, even if – given the risks and benefits – it’s plain to everyone that he ought to accept the settlement offer on the table. The linked-to case addresses this type of situation.

Since most working probate lawyers will find themselves on both sides of this conundrum at one point or another in their career, I thought the best way to think about this case was from both perspectives.

What if I represent the side that refuses to settle, no matter how reasonable the offer?

No matter how frustrating this situation may be, you have to fight the temptation to subtly “lean” on your client until he accepts a deal you know – without question – is in his best interest. When the dust settles and your unhappy client re-reads the settlement agreement he never really wanted to sign in the first place, you may find yourself on the receiving end of a malpractice lawsuit. Based on the following excerpt from the linked-to opinion, it looks like that’s where this case may be headed:

Here, Rachid does not claim that any party misled or induced her to enter into the settlement agreement. Rather, she contends that her attorney misled or induced her.

Blogger and mediator Victoria Pynchon expands here on the likely consequences of those cases where a litigant believes his lawyer “mislead or induced” him to accept a settlement offer.

Here’s the bad news. If a litigant is unhappy with the outcome of mediation, he or she is far more likely to bring a complaint (or lawsuit) against his or her own attorney.

In a 2006 article in the Ohio Journal on Dispute Resolution TAKE IT OR LEAVE IT. LUMP IT OR GRIEVE IT: DESIGNING MEDIATOR COMPLAINT SYSTEMS THAT PROTECT MEDIATORS, UNHAPPY PARTIES, ATTORNEYS, COURTS, THE PROCESS, AND THE FIELD Paula M. Young, Assistant Professor at the Appalachian School of Law cites Mel Rubin on “settle and sue” cases which Rubin suggests are on the rise among clients unhappy with the outcome of a mediation. Rubin “also suggests that if a client is unhappy with the outcome of mediation, he or she is more likely to sue his or her attorney for malpractice. Id.

The gist of Victoria’s advise – which I agree with – is to make sure your client feels he was treated fairly in mediation, that he wasn’t “ganged up on” by the mediator (or you), and that he walks away feeling he was ultimately in control of the final outcome. To that advice I would add: if you think your client is being irrational, the right thing to do may be to tell him to find a new lawyer. As the 3d DCA pointed out not too long ago in a case involving an out-of-control probate litigant, “’just say no’ applies to some clients and matters, just as to drugs” [click here].

What if I represent the side that’s trying to enforce a settlement agreement?

Rachid v. Perez, — So.3d —-, 2010 WL 173776 (Fla. 3d DCA Jan 20, 2010)

If you’re counsel for the good guy, the last thing you want is protracted litigation to enforce a settlement agreement. To nip this sort of challenge in the bud, you’ll want to point the other side to the linked-to opinion and let him or her know that in the absence of truly outrageous circumstances, Florida law forces litigants to live with the deals they’ve struck . . . no matter how badly they may be suffering from buyer’s remorse.

First, Rachid’s burden when seeking rescission of a settlement agreement on this legal theory is a particularly difficult one. See Tilden Groves, 816 So.2d at 660 (“[C]ases settled in mediation are especially unsuited for the liberal application of a rule allowing rescission of a settlement agreement based on unilateral mistake.”); see also Sponga v. Warro, 698 So.2d 621, 625 (Fla. 5th DCA 1997).

Second, Rachid’s argument is without merit as the record does not support the legal remedy of rescission on the basis that the settlement agreement was the product of a unilateral mistake. Under Florida law, the party seeking rescission based on unilateral mistake must establish that:

(1) the mistake was induced by the party seeking to benefit from the mistake, (2) there is no negligence or want of due care on the part of the party seeking a return to the status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust.

Lechuga v. Flanigan’s Enters., Inc., 533 So.2d 856, 857 (Fla. 3d DCA 1988). Here, Rachid does not claim that any party misled or induced her to enter into the settlement agreement. Rather, she contends that her attorney misled or induced her. Thus, her claim fails as a matter of law. Rachid also cannot demonstrate that there was “no negligence or want of due care” on her part because she had an obligation to read and know the legal parameters regarding the validity and application of the prenuptial agreement prior to mediation. Leff v. Ecker, 972 So.2d 965 (Fla. 3d DCA 2007) (holding that where the plaintiff entered into a mediated settlement agreement with a limited knowledge of the relevant facts, the plaintiff bore the risk of mistake). Additionally, Rachid was represented by counsel at mediation, and she failed to demonstrate that denial of rescission would be inequitable or that granting relief would be unjust. Thus, we conclude that even if Rachid had properly preserved her claim of unilateral mistake, on appellate review her claim would have failed on the merits.

We . . . address the argument that Rachid did raise-that there was no meeting of the minds. As to the trial court’s rejection of this argument, we find no abuse of discretion. See Tanner v. Tanner, 975 So.2d 1190 (Fla. 1st DCA 2008) (holding that “ ‘[b]uyer’s remorse’ is not a sufficient basis for overturning a marital settlement agreement freely and voluntarily entered into”); see also BMW of N. Am., Inc. v. Krathen, 471 So.2d 585 (Fla. 4th DCA 1985) (rejecting BMW’s appeal to set aside a judgment based on BMW’s failure to include a condition in its settlement offer). We therefore affirm the order under review.

The WSJ’s Wealth Report Blog posted here on litigation swirling around the trust/estate of billionaire mall magnate Mel Simon. What I found especially interesting was the implication of possible undue influence by his surviving spouse, Bren Simon. Here’s an excerpt:

Months before he died of cancer last September, billionaire mall magnate Mel Simon made some big changes to his will.

The changes boosted the share of his fortune left to his wife, Bren Simon. Originally she was to get a third. After the changes, she was to half.

The changes also cut out Melvin’s three children from his first marriage—Deborah, David Simon and Cynthia Simon-Skjodt—and left charitable giving to Bren’s discretion. The earlier will earmarked one-third of the estate for charity.

Mr. Simon’s estate is valued at somewhere from $1 billion to $2 billion, and it has increased since his death since the stock in the company he founded–Simon Property Group–has rebounded.

The changes to the will sparked an escalating Simon-family feud, as this Chicago Tribune article lays out.. Mr. Simon’s daughter Deborah is suing her stepmom, Bren Simon, alleging she persuaded Mel Simon to change his will to reduce the children’s inheritances. The suit claims her dad was suffering from dementia at the time and needed help signing the document.

Now, Bren Simon’s latest court filing [click here] says Mr. Simon “voluntarily and of his own free will signed a valid will and trust in February.” She acknowledges that Mr. Simon needed help with his signature, but said Parkinson’s symptoms in his right hand were to blame.

Spousal Undue Influence Claims in Florida:

I have no idea what the law is on spousal undue-influence claims in Indiana (where Mr. Simon’s estate is being litigated), but in Florida they’re very tough to prove. For starters, you can’t rely on the “confidential relationship” between spouses to trigger the presumption of undue influence. There’s a solid, common sense reason for this rule: in its absence every will benefiting a spouse could potentially be challenged on undue influence grounds. Here’s how the 3d DCA explained Florida’s approach in Tarsagian v. Watt, 402 So.2d 471 (Fla. 3d DCA 1981):

The holding of Goertner v. Gardiner, 125 Fla. 477, 170 So. 112, reh. den., 126 Fla. 412, 170 So. 844 (1936), that the confidential relationship which exists between a husband and wife is not one which may be considered in the law governing will contests, accord, In re Estate of Knight, 108 So.2d 629 (Fla. 1st DCA 1959), is, in our view, still extant. Since a confidential relationship is one necessary requirement which must be met before a presumption of undue influence arises, under Goertner the presumption cannot arise in the case of a husband and wife. Were the confidential relationship between spouses not exempted from that presumption of undue influence rule, the presumption would arise in nearly every case in which the spouse is a substantial beneficiary, since the required active procurement would almost always be present. One would naturally expect to find a spouse to be present at the execution of the will, present when the testator expresses a desire to make a will, knowledgeable about the contents of the will prior to its execution, involved in its safekeeping, and perhaps even involved in the recommendation of an attorney-preparer and consultation with an attorney-preparer. These, of course, are among the criteria for determining if one is engaged in active procurement. See In re Estate of Carpenter, supra.

On the other hand,  I don’t think this means a spousal undue influence claim is impossible in Florida; you just can rely on the presumption. Instead, you’ll need to prove your case directly. A case that suggests a finding of undue influence against a surviving spouse, although not based on a presumption, is In re Auerbacher’s Estate, 41 So.2d 659 (Fla. 1949). 

But what if the marriage itself is procured by fraud, undue influence, or duress?

By the way, if someone is intent on preying upon another’s wealth, the best way to go about doing it isn’t mucking around with estate planning documents, it’s marrying the guy. The mother of all inter-spousal estate grabs is the marriage itself. Once you’re hitched, you’re automatically entitled to all sorts of goodies as a surviving spouse, no matter what the estate planning documents may say.

This is where we hit a brick wall in Florida: the current state of the law seems to be that marriages procured by fraud, undue influence or duress can’t be challenged after a person’s death. Click here for an excellent white paper prepared by über probate litigator William (“Bill”) T. Hennessey and his team over at Gunster summarizing Florida law on this issue and a proposed legislative fix. Here’s an excerpt:

The mere status of surviving spouse affords a myriad of significant financial benefits under Florida law, including the right to homestead property (at least a life estate in the decedent’s homestead residence), an’ elective share (30% of the decedent’s augmented elective estate), to take as a pretermitted spouse (up to 100% of the estate under the laws of intestacy), family allowance, exempt property, and priority in preference in selecting a personal representative. In addition, Florida courts have held that a presumption of undue influence in a will contest “cannot arise in the case of a husband and wife” because the requirement of active procurement would almost always be present. Jacobs v. Vaillancourt, 634 So. 2d 667, 672 (Fla. 2d DCA 1994); Tarsagian v. Wall, 402 So. 2d 471, 472 (Fla. 3d DCA 1981).

Most of these benefits are well deserved. It has often been said that Florida has a strong public policy in favor of protecting a decedent’s surviving spouse. See, e.g., Via v. Putnam, 656 So. 2d 460, 462 (Fla. 1995). However, what happens when a marriage is procured by undue influence, fraud or exploitation? Is Florida’s public policy furthered, in such an instance? This report will discuss the current state of Florida law on the ability to challenge the validity of a marriage after the death of one of the parties to the marriage. It will also examine how other states have addressed this issue.
. . . . .

In sum, Florida follows the common law and majority rule which only allows void marriages to be challenged after death. In most instances, Florida courts have held that marriages procured by fraud, duress, and undue influence are merely voidable, affording potential heirs no ability to challenge a marriage after death. Given the extensive rights available to a surviving spouse, a wrongdoer can profit significantly by simply inducing or influencing an elderly person to enter into a marriage. The Subcommittee recommends that the full committee consider and discuss legislation to address this issue.

I recently worked with one of my partners on drafting the Florida Chapter of the newly released International Succession, published by Oxford University Press. The list of contributors is a “Who’s Who” of prominent probate lawyers in the world today. Good place to start if you’re ever looking for expert local counsel in anyplace from Dubai to Brazil . . . and all points in between.

I’m proud of the final product and think it’s the kind of resource more and more trusts and estates lawyers will need to turn to over the coming years as everyone’s practice grows evermore multi-jurisdictional in nature. If your practice has an international flavor, this resource is a good investment. Here’s how the publisher described it:

Increasing numbers of people have connections with one country, but live and work in another, frequently owning property or investments in several countries. As such, international aspects arise in an increasing number of estates. Different countries may have separate arrangements for ownership, taxation, and succession. International Succession equips practitioners with the information necessary to navigate problems involving these different systems.

Although lawyers would often advise only on the law of the jurisdictions in which they are based, seeking advice from lawyers in other countries, this book will save the practitioner the time – and expense – of ascertaining the basics concerning the inheritance systems in different countries, offering clear and easy to use information on the laws of inheritance and succession.

Each country’s report is based on responses to a comprehensive questionnaire that considers the practical issues arising from the jurisdiction’s individual laws, making it easy for users to make specific comparisons between the laws of one country and another. The book covers over fifty countries with entries written by experts from each country, making it an invaluable resource for the busy practitioner.

This title is an improved and expanded version of International Succession , edited by Louis Garb and published by Kluwer Law International, 2004. This edition, published in hardback form, will also be supplemented annually in between editions to update the individual country entries.

Features

  • Provides a comprehensive survey of succession laws in over fifty countries
  • Enables easy cross-referencing with a questionnaire format for each country
  • Considers the practical issues arising out of inheritance across multiple jurisdictions
  • Supplemented annually in between editions to keep existing country entries fully up-to-date and include a selection of new countries
  • Entries written by experienced practitioners in the relevant jurisdiction around the world