Copeland v. Buswell, — So.3d —-, 2009 WL 2243701 (Fla. 2d DCA Jul 29, 2009)

Under Florida law the personal representative is the central figure in all things having to do with the probate estate. No matter how inconvenient that fact may be, you can’t ignore the PR in the hopes of cutting a better deal for yourself. That’s the basic take-away from this case.

In this case the estate’s largest creditor (Tampa General Hospital claimed $492,224 in unpaid medical bills) tried to cut a better deal for itself by bypassing the PR and dealing directly with a third party that owed the estate money (a tortfeasor). Under the side deal the hospital got a bigger chunk of its claim paid ($300,000) and the tortfeasor cut its liability exposure to the estate by almost $200,000. Sounds clever. Everybody wins right? Wrong!

Why is the estate the big loser in this deal?

  • First, by cutting out the PR the estate basically got nothing. Which means the PR had no funds with which to pay her own lawyers, or pay herself a PR’s fee, or basically pay any other creditor whose claim had priority over the hospital’s under Florida’s probate code.
  • Second, by cutting out the PR the estate was deprived of the full value of its claim. At the wrongful-death trial the judge ruled that the decedent had in fact incurred 100% of the $492,224 in unpaid medical bills being claimed by the hospital. In other words, the estate’s damages claim would have been for the full amount, NOT the lower figure agreed to in the side deal.

The 2d DCA said no way to the deal, and unwound the whole thing by focusing on how it basically did an end run around the priority-of-payments scheme built into Florida’s probate code:

Under section 733.707, Tampa General’s claim for medical expenses would be designated as a class 4 claim to be paid after class 1, 2, or 3 claims. See § 733.707(1)(a)-(d). In this case, by virtue of [the side deal], Tampa General’s class 4 claim for medical expenses improperly took precedence over class 1 claims for costs of administration and class 2 claims for funeral expenses, in contravention of the priorities established in section 733.707.

The majority’s opinion does a good job of explaining the law, but they don’t really comment how this deal was too cute by half. For that you need to read Judge Concurs’ concurrence. Here’s an excerpt:

[A]s the majority points out, once an estate is opened the decedent’s creditors must settle any claims with the personal representative of the estate pursuant to Florida’s probate rules and statutes. No creditor of an estate is entitled to enter into a sweetheart deal with any entity owing money to the estate that would circumvent the statutory priority of creditors set forth in section 733.707(1)(a). This prohibition on “side deals” is especially important in cases when apportionment issues among creditors could arise, such as when there are insufficient estate assets to pay all claims. Principles of equity, order, and decorum should rule the apportionment process, not insider knowledge and arbitrary favoritism.

Buettner v. Fass, — So.3d —-, 2009 WL 3446478 (Fla. 4th DCA Oct 28, 2009)

Why??!!, your clients will ask, do you have to start a new partition action in front of a new judge to adjudicate an existing dispute involving a decedent’s homestead property if everything else the decedent owned is already subject to the probate judge’s authority?

And your answer will be: “Hey, if it made sense, it wouldn’t be homestead.” Well, maybe that’s what your inside voice would say. Your outside voice would hopefully say something like: “Because that’s the law, so don’t waste your time and money litigating a dispute involving homestead property in a probate court.” At which point you can now point to the linked-to opinion as an example of what NOT to do:

Appellant .  .  .  appeals an order evicting him from the entire premises of the apartment building and directing the personal representative to recover possession of the entire premises. Although no transcript is provided, and the appellant failed to appear at the hearing on the eviction, the order is fundamentally erroneous on its face in that it purports to evict appellant from the homestead premises and place them in the possession of the personal representative. As the court had already determined that the property was homestead, and thus not part of the decedent’s estate, the personal representative had no possessory interest in it. See Herrilka v. Yates, 13 So.3d 122 (Fla. 4th DCA 2009); Harrell v. Snyder, 913 So.2d 749 (Fla. 5th DCA 2000).

We reverse the order of eviction with instructions to modify the order to exclude that portion of the property which the court has already designated as homestead. While the personal representative claims that appellant is thwarting the personal representative’s ability to maintain the remainder of the property, remedies must be sought other than to dispossess appellant from his own property where the personal representative has no ownership interest in the homestead. See, e.g., Wescott v. Wescott, 487 So.2d 1099 (Fla. 5th DCA 1986) (holding that husband could seek partition of property despite wife’s claim of homestead).

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Silvia Locascio’s brutally beaten corpse was found in her home on October 30, 2001. Eventually her husband and brother-in-law were found guilty of her murder – based in large part on the testimony of the couple’s only son. Click here for more on the back story to this tragic case.

Case study: LoCascio v. Sharpe, — So.3d —-, 2009 WL 3448111 (Fla.App. 3 Dist. Oct 28, 2009):

Eight years after his mother’s murder Edward J. LoCascio (Son) argued that under F.S. 732.802 (Florida’s “slayer statute”) his father had forfeited all property rights in the couple’s marital assets effective as of the date of the murder. The end-goal of this strategy was to claw back the hundreds of thousands of dollars in legal fees father spent on his defense prior to his murder conviction.

I recently wrote about a Georgia case where that state’s slayer statue was also cited as the basis for clawing back attorney fees paid by a surviving widow who ultimately plead guilty to murdering her husband. The slayer-statute argument didn’t work in Georgia, and according to the 3d DCA, it won’t work in Florida either.

Does a Murdering Spouse Forfeit His 50% Share in Couple’s Home? NO

When a person murders his or her spouse, under Florida law the couple’s jointly-titled residence is deemed converted into tenants-in-common property. Result: murderer doesn’t inherit the couple’s house; instead the house is deemed owned 50/50 by the murderer and the deceased spouse’s estate. In the linked-to case Son argued that under Florida’s slayer statue his father’s 50% share of the couple’s residence was forfeited to his mother’s estate as of the date of her death. Both the trial-court judge and the 3d DCA rejected this argument:

The Son commenced two appeals to this Court. In case no. 3D08-1711, the Son argues that the marital residence (the decedent’s and murderer’s homestead) passed in full to him as the mother’s sole heir. The Son bases this argument on the phrase in subsection 732.802(1) [of Florida’s slayer statute] that “the estate of the decedent passes as if the killer had predeceased the decedent.” Had [his father] predeceased [his mother], the Son argues, then [his mother’s estate] would have been vested with sole title to the residence at the time of her death, and that exclusive title would then have passed to the Son under Florida’s law of intestate succession.

We have previously rejected this argument. In Capoccia v. Capoccia, 505 So.2d 624 (Fla. 3d DCA 1987), this Court reconciled subsections (1) and (2) of the statute, explaining that “the express language of subsection (2) does not call for the complete termination of the killer’s interest in the property but merely the termination of the right of survivorship.” Id. at 624-25. Subsection (2) states that the killing “effects a severance of the interest of the decedent,” codifying a prior equitable doctrine that the property in such a case is “treated as if it had been formerly held as a tenancy in common.” Id. at 624.

Does a Murdering Spouse Forfeit 100% of All Marital Assets? NO

Son also argued that his father had forfeited 100% of his property rights in the couple’s marital assets effective as of the date of his mother’s death. Again Son lost at the trial-court level and before the 3d DCA. In the quoted-text below the focus on clawing back legal fees becomes clear.

In the second appeal, Case No. 3D09-118, the Son maintains that the then-personal representative, plaintiff in the civil lawsuit, was erroneously denied relief against Edward S. LoCascio’s property. Specifically, the personal representative sought a constructive trust over all marital property, including Edward S. LoCascio’s rights or interests in that property. Instead, the final judgment of constructive trust was limited to all assets of the decedent, including any such assets “titled or assigned in the name of the defendant Edward S. LoCascio.” The Son maintains that the significance of this alleged error-otherwise appearing moot because of the estate’s judgment liens in amounts tens of millions of dollars greater than the murderer’s known assets-is that the constructive trust over his father’s assets would relate back to the date of his mother’s death.FN6

[FN6.] During the years between the date of the murder and the entry of the judgment liens against Edward S. LoCascio for over $75,000,000, he apparently incurred substantial indebtedness to one or more law firms for his defense in the murder trial and representation in the probate and wrongful death cases.

The slayer statute is not, as presently written, a forfeiture statute awarding all of a killer’s property to the estate of the victim. Nor does the pre-statutory equitable principle that “no one shall be permitted to profit by his own wrongdoing” include any such forfeiture of the killer’s separate property. Capoccia, 505 So.2d at 624. Accordingly, we find no error in the limitation imposed by the trial judge in the final judgment of constructive trust against Edward S. LoCascio.

A year ago things looked pretty bleak for attorney Ben Kuehne here in Miami and a couple of Georgia lawyers who were arrested and apparently spent a night in jail after their client was forced to forfeit estate assets under Georgia’s Slayer Statute [click here]. All were on the receiving end of criminal prosecutions for arguably doing nothing other than getting paid for representing unpopular clients.

Fast forward a year: the Kuehne prosecution has caved in on itself [click here] and in a ruling that should warm the hearts of probate lawyers everywhere, Georgia’s Supreme Court confirmed in Levenson v. Word (No. S09G0336) that you can’t use a Slayer Statute to target lawyers for simply doing their jobs. Florida’s Slayer Statute comes up with some frequency [click here, here], so the threat of being targetted in the same way the Georgia lawyers were targetted can’t be shrugged off by probate lawyers in this state.  One day you may need to refer to the Levenson opinion.

Here’s how the Levenson opinion was reported in ‘Slayer Statute’ Doesn’t Bar Lawyers From Keeping Fees Paid by Executrix, Judges Rule:

Georgia’s defense bar on Monday welcomed a state Supreme Court decision confirming that legal fees paid to two attorneys by the executor of an estate prior to her subsequent guilty plea for murder of her husband could not be clawed back to the estate.

The court ruled that Georgia’s “slayer statute,” which forbids a murderer from profiting from the death of his or her victim, could not be used to bar access to the deceased’s assets until there has been a guilty plea, conviction or other “clear and convincing evidence in any judicial proceeding.”

“We are pleased the Supreme Court unanimously got it right,” said Christine Koehler, president of the Georgia Association of Criminal Defense Lawyers, which had filed an amicus brief and supplied additional counsel supporting attorneys Gerald P. “Jerry” Word and Maryellen Simmons as they sought to retain $75,000 in fees paid to prepare a death-penalty defense for Debra Post. Post pleaded guilty in return for a life sentence in the Oct. 25, 2001, murder-for-hire of her husband, Jerry Post, in Douglasville, Ga.

In re Barrett, Slip Copy, 2009 WL 2448153 (Bankr. S.D.Fla. Aug 06, 2009)

The ultimate ace in the hole for any debtor is bankruptcy. But the bankruptcy card isn’t full proof. Last year a Florida bankruptcy judge ruled that a probate judge’s money judgment against a former personal representative was NOT dischargeable under Bankruptcy Code Section 523(a)(4) because the state court judgment was the product of the PR’s “fraud or defalcation while acting in a fiduciary capacity.” [click here] In the linked-to case above another bankruptcy judge came to the same conclusion with respect to a probate judge’s money judgment against a former trustee.

Collateral Estoppel:

In both cases the winning side at the probate-court level was able to win its Bankruptcy Code Section 523(a)(4) argument without going through a new trial by relying on [1] its state court judgment and [2] the doctrine of collateral estoppel. How? The bankruptcy judge concluded the state court judgment was based on the trustee’s “fraud or defalcation while acting in a fiduciary capacity,” so there was no need to re-litigate that issue in the bankruptcy proceeding.

Lesson learned? Anticipate the Bankruptcy Filing

If you’re representing the party suing a trustee, you’ll want to make sure your money judgment has the kind of findings you’ll need to win a Section 523(a)(4) challenge on collateral estoppel grounds.  Just as importantly, if you’re representing a trustee who’s on the losing side of a probate judge’s money judgment, if there are legitimate grounds to do so, you want to make sure that money judgment can’t inadvertently be used against your client in a bankruptcy proceeding.  Either way, these cases demonstrate why keeping an eye on the bankruptcy issues is a good idea even in probate litigation.

For those looking for more detail, here’s how the estoppel issue was framed in the linked-to case above:

[C]ollateral estoppel clearly applies in discharge proceedings. Grogan v. Garner, 498 U.S. 279, 284 n. 11, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). When determining whether collateral estoppel applies to a state court judgment, as with res judicata, state law applies. St. Laurent v. Ambrose (In re St. Laurent), 991 F.2d 672, 673-76 (11th Cir.1993). However, “[w]hile collateral estoppel may bar a bankruptcy court from relitigating factual issues previously decided in state court, the ultimate issue of dischargeability is a legal question to be addressed by the bankruptcy court in the exercise of its jurisdiction.” Hartnett v. Mustelier (In re Hartnett), 330 B.R. 823, 829 (Bankr.S.D.Fla.2005).

“In Florida, the doctrine of collateral estoppel bars relitigation of the same issues between the same parties in connection with a different cause of action.” Topps v. State, 865 So.2d 1253, 1255 (Fla.2004).

Collateral estoppel is a judicial doctrine which in general terms prevents identical parties from relitigating the same issues that have already been decided. The essential elements of the doctrine are that the parties and issues be identical, and that the particular matter be fully litigated and determined in a contest which results in a final decision of a court of competent jurisdiction.

Dep’t of Health & Rehabilitative Serv. v. B.J.M., 656 So.2d 906, 910 (Fla.1995) (citations omitted). See also Dadeland Depot, Inc., v. St. Paul Fire & Marine Ins. Co., 945 So.2d 1216 (Fla.2006).

In the context of an action brought pursuant 11 U.S.C. § 523(a), “[a] bankruptcy court could properly give collateral estoppel effect to those elements of the claim that are identical to the elements required for discharge and which were actually litigated in the prior action.” Grogan v. Garner, 498 U.S. at 284, 111 S.Ct. 654.

The Trust Plaintiffs seek a determination that the Probate Judgment is non-dischargeable pursuant to 11 U.S.C. § 523(a)(4), and because the Probate Judgment gives rise to a claim for recoupment. Section 523(a)(4) provides that a debtor cannot discharge a debt, “for fraud or defalcation while acting in a fiduciary capacity.” Thus, in order to determine whether the parties are collaterally estopped from relitigating the issues posed herein, I must determine whether each of the elements of collateral estoppel have been met with respect to whether the Debtor: (a) committed fraud or defalcation while acting in a fiduciary capacity, which acts gave rise to a debt; or (b) whether the State Court Judgments gave rise to a right of recoupment and are therefore non-dischargeable.

Finally, to really get your arms around how the collateral estoppel doctrine works in this context, you need a contrasting example: a case involving a state-court judgment against a fiduciary that did NOT collaterally estop the fiduciary from discharging his judgment debt in bankruptcy; for that read a recent short article entitled High Court Takes Pass on Circuit Split Over Defalcation Case by Rudolph J. Di Massa, Jr. and Adrian C. Maholchic of Duane Morris discussing the U.S. 2nd Circuit’s decision in Denton v. Hyman, (In re Hyman) [click here].

Turchin v. Turchin, — So.3d —-, 2009 WL 2871564 (Fla. 4th DCA Sep 09, 2009)

If I buy an investment property with my own pre-marital funds but jointly title the property with my wife, what was my intent?  Did I intend to gift a 1/2 interest in the property to her, or did I put her name on the deed for convenience purposes only?  Especially when the person who put up all the money is dead, it’s next to impossible to establish with certainty what exactly were his intentions when the deed was signed.

We could spend years litigating each of these cases, or we could assume that most people who jointly title property intend to make a gift, and let those who believe otherwise bear the burden of proving no gift was intended.  In Florida we’ve opted for the latter approach: a gift is presumed whenever property is jointly titled. The side that benefits from this presumption in litigation has a huge advantage, which explains why these cases often turn on the evidentiary-presumption issue [click here, here, here, here].

Can a valid pre-nup’ trump the default presumptions governing joint property under Florida law?

One of the primary reasons people sign marital agreements is to reverse or otherwise alter the default presumptions applicable to property acquired before or after marriage. So it would have been a big deal if when put to the test – as in the linked-to opinion – a marital agreement’s property distribution scheme failed to work as intended; not because of some drafting error, but because it simply didn’t comport with Florida law.

Fortunately the agreement worked. As framed by the 4th DCA the question at issue in the linked-to opinion was simple:

Can a decedent’s surviving spouse rely on Florida’s “gift presumptions” to ignore the terms of her valid pre-nup’ and claim as her own the sales proceeds of jointly-titled property purchased by her deceased husband with his separate premarital assets?

According to the probate judge the answer was clearly NO. The 4th DCA agreed, here’s why:

Sharyn Turchin now appeals, arguing, among other things, that the trial court erred in failing to apply a gift presumption when the properties were jointly titled in the names of husband and wife. Although Sharyn Turchin is correct that a gift is presumed under Florida law when property is purchased by one spouse but placed in both names, this presumption does not apply when the antenuptial agreement specifically designates how the jointly held property is to be distributed. See Bowen v. Bowen, 345 S.C. 243, 547 S.E.2d 877, 881 (2001); cf. Hannon v. Hannon, 740 So.2d 1181, 1187 (Fla. 4th DCA 1999) (“As a general matter, the provisions in chapter 61 on alimony do not exist to displace nuptial agreements; rather the statutes exist to set the principles when there is no agreement.”). “A primary purpose of an [antenuptial] agreement is to modify or shrink the general discretion of [a] judge in doing equity between the parties. The agreement itself is intended to define the mutual equities, and the trial judge is not free to ignore its provisions or to render them ineffective.” Hannon, 740 So.2d at 1187. Because the antenuptial agreement in this case unambiguously provided for the manner of distribution of jointly held property based upon who funded the acquisition, the presumption does not apply. Accordingly, the trial court properly declined to apply the gift presumption. We therefore affirm.

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I’ve recently been lecturing on tax issues in play in probate and trust litigation. After giving this lecture a couple of times I noticed a pattern: the single tax question most probate lawyers were concerned with was how to limit a personal representative’s personal tax-exposure risk, which is inherent to all probate administrations.

Here’s the problem:

A personal representative (“PR”) is personally liable for paying the decedent’s remaining tax bills, be they income taxes, gift taxes or estate taxes. See 31 U.S.C. §3713(b) and IRS Manual 5.17.13.8 (10-16-2007). That’s right, when you say “yes” to being someone’s PR, you also say “yes” to personally guaranteeing the IRS that all of their taxes are paid up. But how can a PR make sure the decedent wasn’t cheating on his or her taxes? And how can a PR make sure he’s uncovered all those skeletons in the closet before distributing any assets of the estate to the heirs?

Solution:

There are three risk-management tools every probate lawyer needs to know about and incorporate into his or her practice:

  1. IRS Form 56 (Notice Concerning Fiduciary Relationship)
  2. IRS Form 4810 (Request for Prompt Assessment UnderInternal Revenue Code Section 6501(d))
  3. IRS Form 5495 (Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905)

Even if you’re working with a CPA who’s supposed to be taking the lead on all the tax issues, you need to know these protective measures exist and ensure your PR gets the full benefit of them. Here’s why.

IRS Form 56 [click here]

A Form 56 needs to be filed twice: when your PR first gets appoint to let the IRS know who your PR is and where to send all tax notices; and again when your PR finishes his job and is discharged. What you’re doing here is making sure that any correspondence from the IRS having to do with the decedent’s taxes gets to your PR right away; the last thing you want is your PR to get sued for failing to pay the decedent’s back taxes because the deficiency notices went to the wrong address. Also, the instructions to Form 56 state that the filing of a Form 56 when your PR is discharged will “relieve [the PR] of any further duty or liability as a fiduciary.”

IRS Form 4810 [click here]

Not only do you want to make sure the IRS knows your PR exists and that this is the person they need to contact for all matters related to the decedent, you’ll also want to “shake the bushes” to make sure there are no unpaid back taxes involving the decedent. You do this by filing a Form 4810 (Request for Prompt Assessment for Income and Gift Taxes). A cautious PR will wait for the IRS to respond to this assessment request prior to making any distributions to the estate’s beneficiaries. You don’t want all the cash to go out the door only to be surprised by some huge tax assessment that puts your PR in the uncomfortable position of having to ask heirs to give money back to pay back taxes.

IRS Form 5495 [click here]

At the same time your PR files a Form 4810, he’ll also want to simultaneously (but separately) file a Form 5495 (Request for Discharge from Personal Liability for Decedent’s Income and Gift Taxes). This is another way to make sure your PR gets the heads up on any of the decedent’s unpaid back taxes. If Form 5495 is properly filed, the IRS has nine months in which to notify the PR of any deficiency for the decedent’s applicable income or gift tax returns. If the PR pays the additional tax, or if no notice is received from the IRS within nine months from the date of filing Form 5495, the PR is then discharged from personal liability.

For an excellent in-depth explanation of all three of these forms and how they work together to minimize a PR’s personal tax-exposure risk (as well as other helpful hints), you’ll want to read Minimizing a Personal Representative’s Personal Liability to Pay Taxes, Part I & Part II, by Florida trusts and estates attorneys William C. Carroll and John “Randy” Randolph.

But what payments can you make while you’re figuring out the tax issues?

If the PR distributes any portion of the estate to the beneficiaries before all of the federal taxes are paid, he or she could be held personally liable to the extent of the distribution.  Personal liability under 31 USC § 3713(b) is the “muscle” behind the federal priority under 31 USC § 3713(a).

One way to manage a PR’s personal tax-liability risk is to not pay a cent to anyone until every conceivable tax issue is identified and taken care of. But we all know this isn’t possible. In order to properly manage an estate there are certain payments that can’t wait.  Primary examples include court costs, reasonable compensation for the PR and the PR’s attorney, and expenses incurred to collect and preserve assets of the estate. Fortunately PR’s don’t have to guess which payments they can and can’t make without exposing themselves to personal liability. If a PR follows 2009->Ch0733->Section%20707#0733.707″>F. S. §733.707, which lists the distribution priorities for in-solvent estates under Florida’s Probate Code, he’ll be alright. Why? Because the payment priorities under Florida law are, for the most part, consistent with the payment priorities under 31 USC § 3713(a), as construed by the IRS (see IRS Manual 5.17.13.6 (10-16-2007)).

The only discrepancy between Florida’s and the IRS’s list of priority payments has to do with the payment of a family allowance. Under 2009->Ch0733->Section%20707#0733.707″>F. S. §733.707, a family-allowance payment is considered a “Class 5” priority, below the U.S. Government “Class 3” priority, but the IRS considers a reasonable family allowance payment to have priority over its claims for payment of taxes (see IRS Manual 5.17.13.6 (10-16-2007)). In other words, the IRS approach is more lenient than Florida’s Probate Code.

Chin v. Estate of Chin, — So.3d —-, 2009 WL 2382326 (Fla. 3d DCA Aug 05, 2009)

Will construction litigation is supposed to be all about figuring out what the dry words on a piece of paper called a “will” are supposed to mean. We can’t ask the testator what the words mean, he’s dead. So “we” (i.e., lawyers sitting as judges or representing clients) do what we’ve been trained to do: we rely on a body of law that sets up a series of analytical tools and evidentiary presumptions aimed at hopefully delivering the most just result possible for all concerned. Florida’s rich body of law governing all aspects of how testamentary documents are supposed to be construed is a frequent topic of discussion on this blog [click here, here, here, here, here].

But by focusing too much on the “law” can we end up missing the forest for the trees?

Will Construction Litigation as Morality Play:

The lesson to draw from the linked-to case is that we shouldn’t lose sight of the fact that no matter what the law may say, at the end of the day we’re all human, which means we’re all swayed by an inherent sense of justice and fair play. The result that seems most “just” and “fair” always has a better chance of persuading the one-person jury that decides every Florida probate case: your probate judge; this is true no matter what the law may say is the correct doctrinal result. Here’s how this point was made in an ABA Journal piece entitled When the Judge Is the Jury:

“The first lawyer to make the facts come alive in a bench trial has a tremendous advantage. .  .  .

“You are talking directly to a fellow human being about the ‘gut stuff’ of life. What’s right and what’s wrong. Fair and unfair. Just and unjust. This is all about the power of a story to grab the heart of a fellow human—not something that is going to be measured for its adequacy by a professor who is checking to see if you found all the possible legal theories in the case. You already did that weeks ago with your pleadings.

“Remember, the power of persuasion lies in creating a sense of injustice. Judges—like juries—want to right wrongs. If you represent the plaintiff, show—don’t tell—your jury how the defendant hurt the plaintiff. And if you represent the defendant, your point is, it’s wrong for him to pay for what he didn’t do.

“Facts—not arguments, legal conclusions or academic pedantry—are what have the power to persuade.”

With this (long!) introduction in mind, read how the 3d DCA summarized the key facts of the linked-to case and the rationale underlying its ruling.

On April 12, 1989, Adolph Chin drafted a Will in Jamaica. When he died in 1997, he co-owned property in Miami-Dade County as tenants in common with his sister, Mary Chin. Adolph and Mary both lived on this property. David Chin, Adolph’s son, was named personal representative of Adolph’s estate. . . .

Paragraph seven of the Will states:

I direct that property held by me in co-ownership with my brother the said Earl Anthony Chin and with my sister, Mary Victoria Chin, shall not be sold as long as my said brother or sister desires to occupy same.

David Chin argues that paragraph seven only applies to property which was co-owned by Adolph, Earl, and Mary concurrently. Mary argues that Adolph devised a life estate to each sibling with whom he co-owned property. If a court finds the language of a will ambiguous, “[t]he Testator’s intent is the guiding and dominating factor in the construction of a Will.” See In re Roger’s Estate, 180 So.2d 167, 170 (1965). When interpreting ambiguous provisions of a will, courts may look upon the situation of the parties, such as ties and affection between the testator and his or her legatees. Id.

On de novo review, we agree with the trial court’s finding that paragraph seven grants a life estate to Mary Chin. Adolph shared a separate residence with each sibling. The trial court found this to be strong evidence that he did not have the intent to dispossess his siblings of their homes after his death. Additionally, to construe paragraph seven to apply only if there were co-ownership of property by all three individuals asks the Court to adopt the notion that Adolph Chin inserted a restriction into his Will with full knowledge that it had no meaning. This Court simply cannot adopt this explanation.

Thus, we agree with the lower court that Mary Chin has a life estate in the property and we affirm the lower court’s Amended Order of Summary Administration.

A bitter chapter in the litigation swirling around Brooke Astor and her estate – worth more than $180 million when she died two years ago – came to a close this week when Anthony Marshall was found guilty on criminal charges that he defrauded his mother and stole tens of millions of dollars from her as she suffered from Alzheimer’s disease in the twilight of her life.

As reported by the NY Times in Brooke Astor’s Son Guilty in Scheme to Defraud Her:

The jury’s verdict means that Mrs. Astor’s son, Anthony D. Marshall, 85, faces a sentence of at least a year and as many as 25 years. A co-defendant, Francis X. Morrissey Jr., a lawyer who did estate planning for Mrs. Astor, was also convicted of a series of fraud and conspiracy charges, as well as one count of forging Mrs. Astor’s signature on an amendment to her will.

And it won’t be long now before round two of this litigation heats up: a direct challenge to Brooke Astor’s last will, again as reported by the NY Times:

Because many of the convictions were related to changes to Mrs. Astor’s will that prosecutors said the defendants procured through fraud, Mr. Marshall would seem to be compromised when the battle over Mrs. Astor’s estate — worth more than $180 million when she died two years ago — shifts to Surrogate’s Court in Westchester County.

Of the changes to the will, prosecutors vigorously objected to one executed in January 2004 that gave Mr. Marshall outright control of $60 million of his mother’s estate upon her death.

Paul Saunders, a lawyer for Mrs. de la Renta, said the main defense argument — that Mrs. Astor understood and consented to what her son was doing — had been undermined by the criminal verdict. “The jury clearly found that she did not,” he said. “That’s important because her mental capacity is the central issue in the will contest.”

Lesson learned?

This is only the latest development in a case that’s been grabbing headlines for years [click here, here, here, here]. Will contests rarely have lasting significance beyond the families directly caught up in them, and this case is no exception. But I think those of us who make our living in the trusts and estates world may come to remember the Astor case as a very high profile example of a trend I predict we’ll see more of in years to come: inheritance disputes morphing into criminal prosecutions.

Whether trusts and estates lawyers think this is good or bad public policy is almost beside the point; it’s a fact of life we’ll have to deal with. Which means probate litigators will need to start teaming up with criminal defense attorneys much more frequently, advise their clients to “plead the 5th” at the first hint of trouble [click here], and consider what steps they as lawyers need to take to avoid becoming prosecution targets themselves [click here].

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I previously wrote here about the so-called “Jewish Clause” at the heart of an Illinois probate battle that’s received a good amount of national attention. The first time around an intermediate appellate court ruled the clause was not enforceable. In Estate of Max Feinberg, the Illinois Supreme Court has now reversed that court in a unanimous ruling upholding the clause.

In a 24-page opinion, Justice Rita Garman wrote that “Max and Erla were free to distribute their bounty as they saw fit and to favor grandchildren of whose life choices they approved” even though their decision might be “offensive” to other family members or to outsiders.

As reported by the LA Times in Jewish disinheritance upheld by Illinois high court:

Steven Resnicoff, co-director of the DePaul College of Law’s Center for Jewish Law & Judaic Studies, hailed the court decision as consistent with Illinois public policy.

“It’s not just a Jewish clause. It’s a Catholic clause. It’s a Muslim clause,” Resnicoff said. “It’s not uncommon that people want to encourage children to follow in their footsteps. [The] decision emphasizes the principle that, with some exceptions, a person is free to allocate his or her assets as the person sees fit.”

For those looking to dig a little deeper, Ft. Lauderdale estate planning attorney David Shulman provides an excellent in-depth analysis of the case on his blog, the South Florida Estate Planning Blog, here and here.

Special thanks to Miami estate planning attorney Lucelly Dueñas for bringing this story to my attention.