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Daniel Wise of the New York Law Journal reports in Disbarred Lawyer Sentenced After Admitting to Stealing From Grandparents on yet another case involving the theft of estate funds by the person who was supposed to be the estate’s primary protector.  Here’s the linked-to report in its entirety:

A disbarred Westchester County, N.Y., lawyer has admitted in court that he stole $310,000 from his grandparents.

Chase Caro of White Plains pleaded guilty Monday to grand larceny and has been sentenced to 2 1/2 to 7 1/2 years in prison by County Court Judge Susan Cacace.

A spokesman for Westchester District Attorney Janet DiFiore said Caro, 49, admitted stealing money meant for his grandparents’ trust fund. He already had pleaded guilty to another theft of more than $470,000 from another elderly client. He was sentenced to 2 to 6 years on that count.

Caro agreed to pay restitution of $1.1 million, which also includes funds from a third theft. His sentences will run at the same time.

Caro, who was disbarred in November, is the son of Robert Caro, the Pulitzer Prize-winning biographer of Robert Moses and Lyndon Johnson.

Two points came to mind when I read this report. First, no matter who the fiduciary is or how trustworthy that person may appear, systemic, structural safeguards against malfeasance are ALWAYS needed. I’ve written about this point before and given specific examples of the types of safeguards I’m referring to [click here and here].  Second, if someone is accusing the fiduciary of taking money that didn’t belong to him or her, that claim may morph into a criminal prosecution against the fiduciary. Which means that if you’re representing the fiduciary you need to be thinking about whether or not your client should refuse to answer deposition questions or file an accounting based on his or her Fifth Amendment constitutional right against self-incrimination [click here for recent example of this point].

In re Estate of Woodward, — So.2d —-, 2008 WL 942044 (Fla. 2d DCA Apr 09, 2008)

A basic rule under Florida’s probate code is that specifically-devised property is inherited subject to any existing mortgages or other encumbrances unless the decedent’s will specifically directs otherwise. Here’s the governing rule:

733.803 Encumbered property; liability for payment.–The specific devisee of any encumbered property shall be entitled to have the encumbrance on devised property paid at the expense of the residue of the estate only when the will shows that intent. A general direction in the will to pay debts does not show that intent.

In the linked-to case the personal representative (PR) was managing several farms that were part of a single probate estate.  The estate-administration process stretched out for several years.  During that time the PR sold one of the farms and used the sales proceeds to pay off some debt, thererby satisfying a $241,805.81 mortgage on farm property that had been specifically devised to one of the heirs.  The decedent’s will did NOT state that the specifically-devised property was to be distributed debt-free.  Oops!

One of the residuary beneficiaries cried foul, arguing that under F.S. 733.803 the PR should have set aside the sales proceeds for the residuary beneficiaries of the estate, rather than paying off debt on the specifically devised property.  The PR said this rule only applied if the debt was in place at the time of distribution, but didn’t stop her from paying off debt encumbering specifically devised property during the course of the probate proceeding.  Wrong answer!

No matter how long the estate-administration process takes, you can’t re-write the testator’s will.  Which is effectively what the PR did in this case when she paid off the debt on the specifically devised property at the expense of the residuary estate. Here’s how the 2d DCA explained the rule:

The trial court’s rejection of Brian’s objection to the satisfaction of the encumbrance is inconsistent with the governing provision of the Florida Probate Code. Section 733.803, Florida Statutes (2002), provides that “[t]he specific devisee of any encumbered property shall be entitled to have the encumbrance on devised property paid at the expense of the residue of the estate only when the will shows that intent ” and that “[a] general direction in the will to pay debts does not show that intent.” (Emphasis added.) This statute makes clear that Jay was to inherit his father’s interests in the three encumbered farms free of debt only if the will or codicil specifically expressed the decedent’s intent that Jay would inherit the interests free of debt. Neither the will nor the codicil shows the intent required by the statute. Cf. In re Estate of Sterner, 450 So.2d 1256, 1257 (Fla. 4th DCA 1984) (holding that section 773.803 required residue of estate to pay encumbrances on property where codicil leaving life tenancy in property to specific devisee specifically stated that life tenancy was to be “free of rent and of any encumbrance of any nature whatsoever, such as taxes, liens, pledges, etc., except utilities and telephone”). Although the will states that all the decedent’s legal debts should be paid, the statute plainly provides that such a general direction for the payment of debts does not evidence an intent that encumbrances on devised properties be paid at the expense of the residuary estate.

We reject the personal representative’s argument that section 733 .803 only applies to encumbrances that remain unsatisfied at the time of distribution and that she had unfettered discretion to pay debts of the estate during the period of administration. Such an interpretation is inconsistent with the design of section 733.803 to carry out the testator’s intent with respect to the devise of encumbered property.

Bud Newman of the Daily Business Review reported in Attorney Unlicensed in Florida Still Awarded $1 Million in Fees in Messy Probate Case on a case I first wrote about last year [click here].  Here’s an excerpt:

A Palm Beach Circuit judge has awarded a North Carolina attorney $1 million in fees for representing a wealthy Palm Beach, Fla., widow in a messy probate case even though the attorney was not licensed to practice law in Florida.

Judge Jeffrey Winikoff ruled Winston-Salem, N.C., solo practitioner William West was entitled to the fee for his work protecting and improving the financial interests of Palm Beach resident Carla Morrison in a complex probate case in 2004 and 2005.

Morrison is the widow of Pedro Morrison, who died of a heart attack in 2003 at 49 shortly after filing for a divorce, leaving an estimated $100 million estate, according to court documents. His three beneficiaries were his widow, his brother Carlos Morrison and Carlos’ son Tommy.

*     *     *     *     *

Winikoff also ruled West should get his fee despite the fact the paperwork he submitted to practice law in Florida had not yet been approved. The judge said West’s failure to get his paperwork certified on time made him an unlicensed practitioner on the date the financial settlement was signed.

Even though West "engaged in the unlicensed practice of law" throughout his representation of Morrison, "the public policy of the state of Florida would not be compromised by allowing West recovery" of his fee, the judge wrote.

Four months after the probate settlement was approved in 2005, Winikoff noted the Florida Supreme Court changed the rules on appearances by out-of-state lawyers in disputes in Florida. The Florida Bar had already recommended the change, and "the American Bar Association had authorized conduct similar to West’s since 2002," the judge wrote.

For those reasons, the judge ruled "there was no public policy violation that would justify" denying the fee to West.

The complicated case has another potentially bizarre twist that could have two big-name law firms battling each other over who should pay West.

West Palm Beach attorney Gerald Richman of Richman Greer Weil Brumbaugh Mirabito & Christensen, who represented West, said the total award with interest would be about $1.15 million after deducting the $41,000 he has already received. However, Richman said he may sue the Edwards Angell firm to collect some or all of West’s $1 million award.

Morrison authorized $1 million to be set aside for West and held in an Edwards Angell trust account until the fee dispute with West was resolved, Richman said. Instead, he claimed the law firm returned the money to Morrison before the dispute was resolved and she spent at least $250,000 of it on a diamond bracelet and may have spent all of it.

Palm Beach Circuit Judge Karen Martin, who presided over the probate settlement, ordered Morrison in 2006 to return the money to the Edwards Angell trust account. Richman said she has not yet done so. Richman said he will first try to get West’s money from Morrison, but if her assets — including a $90,000 monthly payment from her late husband’s estate — are legally protected from being attached, "obviously we’re going to look at the Edwards Angell firm" to try and collect the money.

"They made a mistake here," Richman said of Edwards Angell.

Lesson learned?

There are two sets of lawyers sweating bullets in this case. 

First, I was surprised to learn that an otherwise very astute out-of-state attorney (he apparently was instrumental in crafting a settlement agreement involving a complex $100 million estate) put his own $1 million fee at risk by apparently failing to file a timely pro hac vice motion.  Although these motions "should" be perfunctory in nature, as another out-of-state attorney recently learned, even something as simple as a pro hac vice motion can trip you up when you least expect it [click here].

I think everyone involved in this case probably assumes the fee-order reported on above will be appealed, so Mr. West’s $1 million pay day remains uncertain.  This poor guy is probably kicking himself for not getting that darn pro hac vice motion filed when he first stepped into the case.

Second, the Edwards Angell attorneys are probably wishing someone in accounting had stood up and said "are you kidding me??!!" before they released the $1 million in estate funds they were supposed to retain in their escrow account pending final resolution of the fee dispute.  You can just imagine how upset the trial-court judge must have been when he learned these funds had been released to the client and she in turn testified that she blew $250,000 of those funds on a diamond bracelet and "may have spent all of it."  Oops!!

Stay tooned for more . . .

Chaffin v. Overstreet, — So.2d —-, 2008 WL 678664 (Fla. 5th DCA Mar 14, 2008)

In contested probate proceedings involving larger estates things can quickly get messy from a jurisdictional and civil procedure perspective because people don’t order their lives into nice neat categories labled "probate" and "non-probate" assets.  Heirs inevitably get in front of the probate judge and ask the court to rule on all sorts of issues that simply have nothing to do with administering the decedent’s probate estate, although they may have a huge impact on the economic well being of the decedent’s heirs.  A prime example of this type of hodgepodge approach to litigation is the intermixing of contested trust actions with completely unrelated probate proceedings.

In the linked-to case the personal representative of "Wife’s" estate was also co-trustee of a trust established by her husband ("Husband’s Trust"), a trust established by Wife and a trust referred to as the "Family Trust."  The PR filed a petition within the probate proceeding seeking to remove the co-trustee of the Family Trust.  At a hearing involving the Family Trust litigation all of sudden the probate court started entering rulings having to do with Husband’s Trust.  Here’s how the 5th DCA described this part of the case:

On 12 September 2006, Chaffin, acting as the personal representative of [Wife’s] estate, filed a Petition to Remove Robert Clay Overstreet as Co-Trustee of the [Family Trust]. Chaffin alleged that Clay was “presently ‘unable’ to serve as Co-trustee of the [Family Trust].”  .  .  .

.  .  .

During the hearing, the trial judge also inquired about the sale of the Ham Brown Road property, which was fifty acres given in trust to Cole in [Husband’s Trust]. Because the property was not part of the [Family Trust], Chaffin argued that the probate court lacked jurisdiction to rule on this issue. Nevertheless, the probate judge found that Chaffin did not have authority under the language of [Husband’s Trust agreement] to sell the property. Shortly thereafter, the probate judge announced that he was requiring yearly accountings on everything that goes through the trust or probate estate.

The 5th DCA agreed with the trustee’s jurisdictional objection, reversing the probate court as follows:

We .  .  .  find that Chaffin’s due process rights were violated when the probate court considered issues other than the Petition to Remove Clay. The only matter noticed for hearing was whether Clay should be removed as the co-trustee of the [Family Trust]. Thus, the probate court lacked jurisdiction over the [property owned by Husband’s Trust] because the issue was not sufficiently raised by the pleading and noticed for hearing. See Alvarez v. Singh, 888 So.2d 159 (Fla. 5th DCA 2004).

In addition, we find that Chaffin was before the court solely in his capacity as co-trustee of the [Family Trust] and the probate court lacked jurisdiction over any other trusts. Although Chaffin sought the appointment of the guardian ad litem and the attorney ad litem in his capacity as trustee of [Husband’s Trust] and [Wife’s Trust], this was insufficient to constitute a general appearance by Chaffin in these capacities. See McKelvey v. McKelvey, 323 So.2d 651, 653 (Fla. 3d DCA 1976) (holding that a general appearance will ordinarily be effected by making any motion involving the merits of a plaintiff’s claim and his or her right to maintain the suit and secure the relief sought); Snipes v. Chase Manhattan Mortg. Corp., 885 So.2d 899 (Fla. 5th DCA 2004). Accordingly, we find that, while Clay is entitled to the use of [Family Trust] money to obtain counsel to defend against attacks brought by Chaffin, the probate court lacked jurisdiction to award Clay trust money from any other trusts. See In re Estate of Stisser, 932 So.2d 400, 402 (Fla. 2d DCA 2006) (holding that trustees are indispensable parties and the probate court must have jurisdiction over the trustees in order to enter a ruling affecting the corpus of the trust); McLendon v. Smith, 589 So.2d 410 (Fla. 5th DCA 1991) (holding that presence in one capacity does not subject a party in another capacity to the jurisdiction of the court).

Lesson learned?

If you’re already in front of a probate court and it looks like a related trust may be affected by the probate litigation, you need to anticipate the jurisdictional issues and make a choice: either file a petition getting your trust in front of the same probate judge or file a separate trust action in the general-jurisdiction division of the circuit court and get your trust in front of a different judge.  There are pros and cons to either choice, but at least you’ve dealt with the jurisdictional issues head on (and hopefully plead the separate trust action in a way that makes sense from a procedural view point).

Clemons v. Thornton, — So.2d —-, 2008 WL 624863 (Fla. 1st DCA Mar 10, 2008)

When an appellate opinion comes along dissecting a discombobulated homestead deed and explaining “who” gets “what” when the dust settles, it’s gold because it’s like getting the answers to your final exam in advance.  The linked-to case serves up one of those opinions.

The linked-to case addressed the following common estate-planning scenario:

Widowed father wants to make sure his second wife has the right to live in the house he purchased and paid for years prior to the second marriage, but also wants to make sure that when he and second wife die, the house goes to his children, not second-wife’s children from a prior marriage.

This estate plan is simple enough, and if done properly, works all the time.  In the linked-to case the “widowed father” apparently decided to save a few bucks in legal fees by doing his own legal work.  The following facts of the case are all you need to know to see that by being “penny wise” he was setting his estate up for litigation from the get go (which is exponentially more expensive than simple estate planning).

2d DCA describes discombobulated deed:

The preprinted form warranty deed Mr. Clemons executed described the homestead property and named himself and “Ruth Clemons his wife” as grantees. But the deed contained a typewritten provision immediately following the property description, entitled “Addition to This Instrument,” which stated:

The parties of the second part, W.C. Clemons Jr. and Ruth Clemons Witness that the death of the last surviving party of the second part [sic] shall be cause to convey and confirm and assign forever all that certain parcel of land described above to Joyce M. Thornton.

Mr. Clemons died intestate some seven years later, survived by his widow and lineal descendants, including Joyce M. Thornton. By deed dated January 6, 2004, Mrs. Clemons purported to convey the property to herself and Lloyd Gilpin, Jr., her grandson. Ms. Thornton then sued for declaratory and other relief.

The key facts to note are: deed was executed after second marriage, and second wife did not sign the deed. When this deed eventually became the subject of litigation (surprise?!), the 2d DCA unwound the deal by addressing the following 4 questions.

1st Question: Did the deed validly convey a life estate to grantor and his wife? YES

The trial court and 2d DCA both said “yes.” Here’s how the 2d DCA explained the Florida homestead law governing this point:

Mr. Clemons’s grant of a life estate to himself and Mrs. Clemons as tenants by the entireties was a valid conveyance. See Matthews v. McCain, 125 Fla. 840, 170 So. 323, 325 (Fla.1936) (holding husband and wife may hold life estates as tenants by the entireties). Like the provision on the books today, section 689.11, Florida Statutes (1993), allowed conveyances of real property, including homestead property, between spouses, and did not require the grantee spouse to join in such conveyances. The summary judgment correctly confirms the existence of a life estate in Ruth Clemons, widow of her erstwhile cotenant by the entireties.

2d Question: Did the deed validly convey a remainder interest to the daughter, in the absence of joinder by the wife? NO

The trial court concluded that the grantor clearly “intended” to convey a remainder interest in his home to his daughter, and ruled that the deed accomplished the grantor’s stated intent.  For those of us who follow Florida’s homestead laws (and aren’t embarrassed to admit it), it’s no surprise to see once again that what people “want” to do with their homes often bears no relation to what Florida law requires.  That’s what happened in this case, and the 2d DCA reversed the trial-court on this point as follows:

But Mr. Clemons’s attempt to convey the remainder interest to Joyce M. Thornton was ineffective without Mrs. Clemons’s joinder. Florida’s Constitution requires that both spouses join in alienating homestead property in favor of any third party. See Art. X, § 4(c), Fla. Const. Interpreting the constitutional provision, our supreme court has noted that “it is clear that both [spouses] must join in a conveyance of a homestead owned by one spouse to a third party.” Jameson v. Jameson, 387 So.2d 351, 353 (Fla.1980) (quoting Note, Our Legal Chameleon is a Sacred Cow: Alienation of Homestead under the 1968 Constitution, 24 U. Fla. L.Rev. 701, 705-07 (1972)). A purported transfer of the homestead, not in compliance with constitutional requirements, is void. See Robbins v. Robbins, 360 So.2d 10, 11-12 (Fla. 2d DCA 1978), appeal dismissed, 365 So.2d 714 (Fla.1978); Gotshall v. Taylor, 196 So.2d 479, 481 (Fla. 4th DCA 1967), cert. denied, 201 So.2d 558 (Fla.1967). Mr. Clemons’s attempt to convey the remainder interest in the homestead to Ms. Thornton by the deed he executed on February 23, 1993, did not succeed, because Mrs. Clemons did not sign the deed.

3d Question: If the deed is invalid as to the conveyance of a remainder interest, was the life-estate conveyance to second wife also invalidated? NO

This third point makes clear that a deed can be partially valid, and partially invalid.  In other words, it’s not an all or nothing proposition.  Here’s how the 2d DCA explained this point:

The fate of the intended grant of the remainder interest has no bearing on the validity of the grant of the life estate. See generally W.W. Allen, Annotation, Prior estate as affected by remainder void for remoteness, 168 A.L.R. 321, 322 (1947) (“[P]rovisions of a … deed, valid in themselves, are as matter of course to be given effect notwithstanding the invalidity of other provisions, unless … to permit the valid to take effect without the invalid would produce results presumably objectionable to … [the] grantor.”); see also Leffler v. Leffler, 151 Fla. 455, 10 So.2d 799, 804 (Fla.1942) (en banc) (“Where the will provides for successive estates the invalidity of one may not affect the others as for example, the invalidity of a trust in remainder may not affect the validity of a trust for the life tenant ….”) (quoting Schouler on Wills, Executors and Administrators, Vol. 2, 6th ed., par. 902, pp. 1039-41).

4th Question: What happens to invalidly conveyed homestead property?

This last issue is probably of most interest to probate counsel.  Here’s the “estate plan” Florida law imposes on your homestead property in the absence of a legally-effective deed/will.

Mr. Clemons retained the remainder interest as his sole property, because the deed was ineffective to convey it. When the fee owner of homestead dies intestate “survived by a spouse and lineal descendants, the surviving spouse shall take a life estate in the homestead, with a vested remainder to the lineal descendants in being at the time of the decedent’s death.” § 732.401(1), Fla. Stat. (2000). The failure of Mr. Clemons’s attempt to convey the remainder interest to Ms. Thornton redounded to the benefit, not of Mrs. Clemons, but of Mr. Clemons’s lineal descendants, including Ms. Thornton. Only if Ms. Thornton (and her descendants, if any, see § 732.104, Fla. Stat. (2000) (“Descent shall be per stirpes ….”)) had been Mr. Clemons’s sole survivor(s), would the summary judgment be affirmable in toto-and she has pleaded the existence of other survivors. Upon his death, the remainder vested in his lineal descendants, per stirpes, pursuant to sections 732.104 and 732.401(1), Florida Statutes (2000).

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The Associated Press just reported in Sperm Donor Case Heads for U.S. Supreme Court that a Topeka, Kan., man seeking parental rights to children conceived with sperm he donated is petitioning the U.S. Supreme Court to take his case.  For those of you who like your news served up on TV, [click here] for a local-news piece reporting on the same story.

The case reported on in the AP piece arises out of a Kansas Supreme Court ruling holding that a Kansas state law that doesn’t give sperm donors any parental rights unless there’s a written agreement is indeed constitutional.  As I noted when I first wrote about this case, the result would have been the same under Florida law [click here].

From a probate/inheritance-law viewpoint, I see this case as yet another example of the challenges our society (and by extension probate courts and lawyers) will have to confront as technology races ahead in the development of new forms of assisted reproductive technology, a point I’ve written about before and that is receiving quite a bit of academic/media attention lately [click here].

My bet is that the U.S. Supreme Court will take a pass on this case opting to allow more state courts to take a crack at the issue before weighing in with it’s own conclusions.  But then again, you never know.  If the U.S. Supreme Court does take this case the ramifications could be huge, and not just with respect to inheritance rights.  Although I can’t point to them exactly, I would imagine that somewhere in this case lurking in the underbrush are issues relevant to the abortion debate.  Any time the U.S. Supreme Court steps into that minefield (no matter how obliquely), the stakes are always sky high.

Brooks v. AMP Services Ltd., — So.2d —-, 2008 WL 373423 (Fla. 4th DCA Feb 13, 2008)

The prior opinion dated February 13, 2008 was withdrawn and substituted with the following in its place: Brooks v. Amp Services Ltd., — So.2d —-, 2008 WL 1806204 (Fla.App. 4 Dist. Apr 23, 2008)

At issue in the linked-to case was whether a probate court could vacate its prior order granting a NY attorney’s pro hac vice motion for purely technical reasons that had nothing to do with intentional misconduct by the NY attorney and in no way adversely impacted that administration of justice here in Florida.  Although the answer should be an obvious "no", the probate court ruled the other way.  Here’s how the 4th DCA explained its rationale for quashing the probate court’s order:

Here, the judge revoked Brooks’ admission based only on his failure to corroborate his good standing [in NY] before applying [in FL], an act which did not affect the administration of justice or disrupt any proceedings.  .  .  .

*     *     *     *     *

“The right of an attorney of another state to practice is permissive and subject to the sound discretion of the court to which he applies for the permission. The right to revoke this permission is inherent in the right to grant it.” Parker v. Parker, 97 So.2d 136, 137 (Fla. 3d DCA 1957). Certainly a trial court’s discretion to deny a motion to appear pro hac vice, or to revoke such admission, is quite broad. See Huff v. State, 569 So.2d 1247, 1249 (Fla.1990); Jernigan, 751 So.2d at 681. Nevertheless, it is not absolute, and must be balanced by a party’s right to representation by counsel of choice.  .  .  .

The trial court apparently accepted Brooks’ explanation that he had no reason to believe he did not continue to be in good standing; it did not find he had committed any intentional misconduct, refusing to sanction him even with the imposition of a fine. Its vacation of his status was merely for a technical reason which in no way adversely impacted the administration of justice. Even if it was appropriate technically to vacate Brooks’ prior admission due to his lack of good standing on July 11, the trial court should have accepted his ore tenus motion to appear pro hac vice on August 29, when that deficiency no longer applied. The trial court’s refusal to do so did not serve the ends of justice and we conclude that it constituted a departure from the essential requirements of law under the facts of this case.

As a bonus point to this blog post, readers should note that that the Florida Supreme Court has provided a suggested form of pro hac vice motion in Fla. R. Jud. Admin. 2.510.  Counsel should always use the court-suggested form.

Mark Fass of the New York Law Journal reported in N.Y. High Court Finds Adopted-Out Child Has No Claim to Jell-O Fortune on an interesting case determining the inheritance rights of a woman given up for adoption by her birth mother.  I’ve written about this case before [click here].  In Florida the answer when it comes to adopted-out children is clear: subject to a few specific exceptions, an adopted-out child is not considered an heir of the birth mother.  Here’s the relevant Florida statute:

732.108 Adopted persons and persons born out of wedlock.–

(1) For the purpose of intestate succession by or from an adopted person, the adopted person is a descendant of the adopting parent and is one of the natural kindred of all members of the adopting parent’s family, and is not a descendant of his or her natural parents, nor is he or she one of the kindred of any member of the natural parent’s family or any prior adoptive parent’s family, except that:

(a) Adoption of a child by the spouse of a natural parent has no effect on the relationship between the child and the natural parent or the natural parent’s family.

(b) Adoption of a child by a natural parent’s spouse who married the natural parent after the death of the other natural parent has no effect on the relationship between the child and the family of the deceased natural parent.

(c) Adoption of a child by a close relative, as defined in s. 63.172(2), has no effect on the relationship between the child and the families of the deceased natural parents.

For me the inheritance rights of adopted-out heirs are relatively easy to figure out.  What is much more difficult for courts to figure out are the inheritance rights of heirs conceived as a result of new developments in assisted reproductive technology [click here], or inheritance rights based on advanced DNA testing [click here].  Now that’s hard.

Coming back to the linked-to story out of N.Y.  When reading the following excerpt, aside from the substantive-law issues regarding inheritance rights of adopted-out heirs, I was struck by the roller coaster ride that litigation can be for clients and counsel alike.  The poor woman at the center of this case went from a trial-court ruling holding that she didn’t get a dime of the fortune created by her biological great grandfather, to an intermediate appellate decision reversing the trial court and ruling she was entitled to an approximately $3.5 million share of the estate, to a final appellate ruling swinging back to the original ruling that gave her nothing.  I think there’s a lesson in here somewhere about litigation in general, but that’s for a later day.  OK, so here’s the excerpt from N.Y. High Court Finds Adopted-Out Child Has No Claim to Jell-O Fortune:

The daughter of an heir to the Jell-O fortune, who spent 14 years looking for her birth mother, is not entitled to a multimillion-dollar share of two disputed trusts, the New York Court of Appeals ruled Thursday.

In a separate ruling Thursday involving two joined cases, Matter of Adult Home at Erie Station, 21, and Regional Economic Community Action Program v. Bernaski, 22, the state’s highest court ruled that an Orange County city improperly denied tax exemptions to a home for the elderly and a social work organization devoted to the poor.

In the disputed trusts decision, Matter of the Accounting by Fleet Bank, 27, the court reversed the Appellate Division, 4th Department, finding that the law in effect at the time of the execution of the trusts, in 1926 and 1963, does not imply the right for an adopted-out child to share in a class gift.

The unanimous court also found that public policy precludes office manager Elizabeth McNabb, 52, from receiving shares of two trusts created to benefit her birth mother’s "descendants" and "living children."

Citing the court’s own 1985 decision Matter of Best, 66 NY2d 151, Chief Judge Judith S. Kaye wrote, "As the Court noted, the finality of judicial decrees would be compromised if adopted-out children were included in such class gifts ‘because there would always lurk the possibility, no matter how remote, that a secret out-of-wedlock child had been adopted out of the family by a biological parent or ancestor of a class of beneficiaries.’"

McNabb was born out of wedlock, and her mother consented to her adoption by strangers. She began her quest to find her birth family in 1974, at age 19. She finally uncovered the identity of her mother, Barbara Woodward of Rochester, N.Y., in 1988, when she uncovered a copy of her birth certificate from a Salem, Ore., vital-statistics office.

McNabb then called every Woodward in a Rochester phone book, finally hitting upon a cousin of her mother who passed on Ms. Woodward’s married name, Barbara W. Piel.

Piel’s grandfather, Francis Woodward, purchased the rights to the gelatin he would soon rename Jell-O in 1899 for $450.

McNabb called Piel, and the two soon developed a relationship. Shortly after Piel’s death in 2003, McNabb received a phone call from a Fleet Bank trustee, requesting proof of her relationship to the late Piel.

After the bank determined that McNabb was not entitled to a share of the trusts benefitting Piel’s children, she intervened in the Surrogate Court’s settlement of the trusts.

In December 2005, Monroe County Surrogate Judge Edmund A. Cavalruso decreed that McNabb did not constitute a "descendant" or "child" of her birth mother and therefore was not an intended beneficiary.

Last March, the 4th Department reversed, effectively granting McNabb an approximately $3.5 million share of the two trusts.

Thursday, the Court of Appeals again reversed, holding that McNabb is in fact not entitled to any part of the trusts intended to benefit her birth mother’s children.

Perry v. Perry, — So.2d —-, 2008 WL 588901 (Fla. 4th DCA Mar 05, 2008)

4th DCA Judge Gary M. Farmer penned a thoughtful concurring opinion in this case dissecting the following question:

When a decedent’s will violates the terms of his divorce settlement agreement, as incorporated into a final judgment of divorce, what recourse do the rightful beneficiaries of the estate have?

Judge Farmer’s analysis of this question provides an excellent road map for probate counsel to follow if ever presented with a similar set of facts.

1st Theory: Breach of Contract Claim:

When a will violates the terms of a valid contract, the primary remedy is an independent action for breach of contract – not a frontal assault on the will itself.  In other words, a will can be perfectly valid and also be in breach of a contract.  The remedy then is a suit for damages resulting from the contract breach, not an order declaring the will invalid and not subject to probate.  Here’s how Judge Farmer summarized current Florida law on this point:

“Florida courts have held that … the proper remedy for an alleged breach of a contractual provision in a will is an independent civil action for breach of contract. See Johnson v. Girtman, 542 So.2d 1033, 1035 (Fla. 3d DCA 1989); In re Estate of Algar, 383 So.2d 676, 677-78 (Fla. 5th DCA 1980); Sharps v. Sharps, 219 So.2d 735, 737 (Fla. 3d DCA 1969).”

Essentially these cases stand for the proposition that a will leaving property to someone to carry out a contractual duty is revocable even though the revocation breaches the contract, and so the remedy is an independent action for breach of contract.

2d Theory: Challenge the Will on the Grounds of Illegality:

What if the will-contract at issue is incorporated into a final judgment, as is common in divorce proceedings?  This is where Judge Farmer’s analysis is most interesting.  According to Judge Farmer a will that violates a final judgment is analogous to a will containing a illegal clause, and thus the offending clause may be ignored.  This is a will-construction argument that is very different from the breach-of-contract theory I’ve always thought was primarily at issue in these cases.  Here’s how Judge Farmer explained this point:

[A] bequest in violation of the rule against perpetuities is in opposition to the law of descent and distribution.FN3 Probate courts have a long tradition of refusing to carry out will provisions involving some attendant illegality in the distribution of decedent’s property. Another example-much beloved of the jurisprudes FN4 is Riggs v. Palmer, 115 N.Y. 506, 22 N.E. 188 (1889), which held that the laws governing probate of wills and the distributions of estates, even though plainly requiring otherwise, will not be enforced to secure the benefit of a will to a legatee who has killed the testator in order to prevent a revocation of the will.

FN3. The common law rule against perpetuities has been replaced in Florida by statute. See § 689.225(7), Fla. Stat. (2007).

FN4. These legal philosophers cite Riggs as one of the chief examples of the incoherence of law-that is to say that opposing outcomes in legal disputes may both be justified by the legal corpus and that, contrary to the positivists, law is not a prediction of what a judge will do in a given case.

In this case, a substantial issue might be raised as to whether the probate court could properly enforce a will provision made in direct violation of a permanent injunction in a final judgment commanding the decedent to dispose of another person’s property in a certain way. If a court of competent jurisdiction has already determined by permanent injunction that decedent may name only his children by an earlier marriage under the power of appointment, by what theory may the Probate Judge enforce a willful violation of that injunction? After all, a violation of a permanent injunction is as much a violation of the law as a bequest extending beyond the period of perpetuities.