The man who spent more than a decade battling former Playboy playmate Anna Nicole Smith over his father’s oil fortune (see here) has died unexpectedly.  Here is an excerpt from this on-line report:

E Pierce Marshall, 67, died of an "extremely aggressive infection", family spokesman David Margulies wrote in a statement, the Houston Chronicle reported today.

Marshall’s death comes before his long-running battle with Smith reached a conclusion.

The fight went all the way to the US Supreme Court, which last month sided with the ex-stripper, saying the matter was not the exclusive jurisdiction of a Texas court that had ruled in favor of the younger Marshall.

Smith met J Howard Marshall II at the club where she worked as a topless dancer when she was 26 and he was 89.

He died 14 months after they wed. Smith claimed Marshall verbally promised her half of his estate, worth millions, but E Pierce Marshall claimed to be the only beneficiary.

The Supreme Court ruling gave Smith another chance to collect some of her dead husband’s riches.

CNN also reported on Marshall’s death here.

Wachovia Bank, N.A. v. U.S., — F.3d —-, 2006 WL 1912805 (11th Cir.(Fla.) Jul 13, 2006)

For trust and estates lawyers this case is a good example of how NOT keeping track of minor details — like a client paying federal income tax on a tax-exempt charitable trust for 10 years — can lead to lively appellate opinions (interesting for lawyers, probably less appreciated by clients paying the legal bills).

After 10 years of paying federal income tax for the George C. Nunamann Trust, a tax-exempt charitable remainder trust, someone at Wachovia apparently figured out this wasn’t a good idea and kindly asked the IRS to refund $111,823 in gratuitously-paid income taxes (OOPS!!).  The IRS denied the refund request citing the three-year limitations period for tax refunds (26 U.S.C. 6511(a)).  Wachovia sued for the refund arguing that the general six-year statute of limitations period for claims against the U.S. applied (28 U.S.C. 2401(a)), and won that argument in a summary judgment ruling at the trial court level.  On appeal the 11th Circuit reversed in an opinion that starts off by quoting . . . The Beatles!

The Beatles’ taxman told us what we’d see:
“There’s one for you, nineteen for me.”
But if we really want some funds to free,
how soon does asking have to be?

Doggerel aside, the issue presented in this case is whether the statute of limitations period set forth in 26 U.S.C. § 6511(a) applies to claims for refunds made by those who have mistakenly filed a return and paid tax when they were not actually required to file a tax return. And as the Beatles probably would have guessed, the lamentable answer is yes.

I thought that was clever.  On a more substantive note, the 11th Circuit goes on to provide the following excellent discussion on how "context is king" in all matters involving statutory construction:

Well-established and soundly based rules of statutory construction require us to consider the provisions of § 6511(a), and its language, in context. The Supreme Court has described statutory construction as “a holistic endeavor.” Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 60, 125 S.Ct. 460, 466-67, 160 L.Ed.2d 389 (2004) (citations and quotation marks omitted). In doing so, the Court explained: “A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme-because the same terminology is used elsewhere in a context that makes its meaning clear, or because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.” Id. at 60, 125 S.Ct. at 467.

The Supreme Court has also warned us against slicing a single word from a sentence, mounting it on a definitional slide, and putting it under a microscope in an attempt to discern the meaning of an entire statutory provision: The definition of words in isolation ··· is not necessarily controlling in statutory construction. A word in a statute may or may not extend to the outer limits of its definitional possibilities. Interpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis.  Dolan v. U.S. Postal Serv., 546 U.S. —-, 126 S.Ct. 1252, 1257, 163 L.Ed.2d 1079 (2006). Characteristically, Holmes put it best when he explained in another tax case about ninety years ago that, “[a] word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used.” Towne v. Eisner, 245 U.S. 418, 425, 38 S.Ct. 158, 159, 62 L.Ed. 372 (1918).

Many of the topics touched on in this blog will be the subject of the following upcoming seminar:

Discouraging Family Estate Litigation Through Proper Planning and Administration
August 28, 2006
West Palm Beach, FL

In addition to yours truly, the speakers lined up for this seminar are all solid trust-and-estates litigation practitioners.  One of my co-presenters is Amy B. Beller, whose recently published article "New York vs. Florida: A Forum Selection Guide for Will Contests" I previously wrote about here.  Another is a personal friend, Liz Consuegra, who recently joined one of the top trust-and-estates litigation shops in Miami (other than my firm, of course!).  Another presenter to take note of is John C. Moran, who is lucky enough to work with one of the top trust-and-estates litigation shops in Palm Beach County (and the first law firm I ever worked for), Gunster Yoakley.

An interesting article entitled N.Y. High Court Says Mistaken Avowal of Fatherhood Imposes an ‘Equitable Paternity’ addressed a recent New York appellate decision ratifying the "equitable paternity" doctrine.  This doctrine can come up in the Florida probate litigation context in that the class of persons potentially deemed to be "heirs" of an intestate estate may include a child that was raised by the decedent but never legally adopted.  Here are a few excerpts from the linked-to article:

He who acts like a father, is a father — if not biologically than at least legally — the Court of Appeals said Thursday in imposing "equitable paternity" on a man who wrongly assumed he had fathered a girl and acted accordingly.

The court in Matter of Shondel J. v. Mark D., 40, upheld the trial court and the Appellate Division, 2nd Department, in ordering a man to pay child support on behalf of a child he did not father. In doing so, it recognized the legislatively endorsed concept of "equity paternity," or paternity by estoppel (see Family Court Act §§ 18 [a] and 532 [a]).

The "virtual adoption" doctrine in Florida was articulated in Williams v. Dorrell, 714 So.2d 574, 23 Fla. L. Weekly D1580 (Fla. 3d DCA 1998), as follows:

Virtual adoption is an equitable doctrine created to “protect the interests of a person who was supposed to have been adopted as a child but whose adoptive parents failed to undertake the legal steps necessary to formally accomplish the adoption.” Miller v. Paczier, 591 So.2d 321, 322 (Fla. 3d DCA 1991); see also Sheffield v. Barry, 153 Fla. 144, 14 So.2d 417 (1943). Virtual adoption does not create a parent-child relationship. It is invoked when the adoptive parents die intestate “in order to allow the supposed-to-have-been adopted child to take an intestate share” and to prevent unfair results created by intestacy statutes. Miller, 591 So.2d at 322; see also Tarver v. Evergreen Sod Farms, Inc., 533 So.2d 765, 766 (Fla.1988); Laney v. Roberts, 409 So.2d 201, 203 (Fla. 3d DCA 1982).

In a recent National Law Journal article entitled "A New Twist: Divorce After Death" there was an interesting discussion regarding posthumous divorces in light of recent probate law changes and a handful of unusual lawsuits that deal with spouses who died during divorce proceedings. I have written before about the often close connection between probate litigation and divorce proceedings (see here and here).  The linked-to article simply underscores how high the stakes can be in the probate context when estate planning issues are not immediately addressed after a divorce (better yet, during the divorce proceeding).  Here is an excerpt from the linked-to story:

In Pennsylvania, an attorney is seeking a first-of-its kind posthumous divorce settlement following the death of her client — a dentist who was killed in his home in April, the night before he was to sign divorce papers. Yelenic v. Yelenic, No. 10944 (Indiana Co., Pa., Ct. C.P. 2003).

 In Connecticut, divorce proceedings are still alive in the case of Andrew Kissel, a millionaire developer who was found murdered in his Greenwich home in April, nearly a year after his wife filed for divorce. Millions of dollars are at stake. Kissel v. Kissel, No. FST-FA-05-4003907-S (Stanford, Conn., Super. Ct.).

Posthumous divorce litigation and revised probate laws has prompted family law expert Jonathan W. Wolfe to issue a word of warning to his clients.

"If you have a will, it has to be changed immediately. And if you don’t have a will, you need to have one … because you are now in a position in your life where you don’t want your separate assets to go to the person you’re trying to divorce," said Wolfe, who chairs the family law committee for the American Bar Association’s General Practice, Solo and Small Firm Division.  

FSU Law Professor David F. Powell was the scrivener for the Ad Hoc Trust Law Committee of the Florida Bar that drafted Florida’s new trust code.  In this month’s Florida Bar Journal he published an article entitled The New Florida Trust Code, Part 1, that provides a detailed discussion of the new trust code.  Here’s the introduction to his article:

An important event occurred this past legislative session. Ch. 736 was added to the Florida Statutes. For estate, family law, elder law, and tax practitioners; for clients, their beneficiaries, accountants, and trustees; for regulated trust companies and for Florida courts, this promises to be a big deal!

A long time in the making, new Ch. 736 and some conforming amendments made to the Probate Code and other Florida statutes are the product of a five-year effort by the Ad Hoc Trust Code Revision Committee1 to codify Florida trust law. When it takes effect, the new Florida Trust Code (FTC or the Code) will replace Florida’s existing statutory trust law, most of which is found in Ch. 737.

As will soon be apparent, the new Code contains numerous changes and additions. As a consequence, it has a delayed effective date of July 1, 2007. Between now and then, practitioners and other interested persons have a window of time in which to familiarize themselves with the new Code. This two-part article is intended to facilitate that process. Part 2 will be published in the October issue of The Florida Bar Journal.

Meyer v. Meyer, __ So.2d __, 2006 WL 1708155 (Fla. 5th DCA June 23, 2006) 

Venue rulings can be powerful tools in litigation. Requiring parties to drop their lawsuit in one state and re-file in another (in this case New York) may sound like a minor inconvenience, but the real life implications are significant. A party seeking to enforce his or her rights under a Florida-law governed trust in another state must now hire two sets of lawyers: local counsel to file the initial complaint and navigate the civil procedure requirements of that jurisdiction plus Florida counsel to educate a probate judge in another state regarding what can be very complicated and state-specific Florida trust laws.

In this case an alleged beneficiary of the trust filed a petition in Florida seeking construction of a Florida-law governed trust. The trial court denied a motion to dismiss on venue grounds under F.S. § 737.203. The trial court was reversed by the Fifth DCA. The most significant aspect of the Fifth DCA’s opinion is that it basically maps out the factual allegations a party seeking to keep an action involving a Florida-law governed trust in this state should prove.

Here, the trust is being administered in New York where the trustee resides. None of the parties has any connection with the state of Florida, and we note that the petition filed by Laurie does not contain any factual allegations showing that venue properly lies in this state. Because a proper objection has been filed by parties who are beneficiaries of the trust protesting the proceedings by the Florida court concerning a trust registered or having its principal place of administration in New York, the trial court should have properly applied the dictates of section 737.203. We are unable to determine whether this is what the trial court did because it simply denied the motion to dismiss without revealing the basis for its denial. Accordingly, we reverse the order denying the motion to dismiss and remand for the purpose of allowing the trial court to determine whether all interested parties could be bound by litigation in New York. Perry. If the trial court finds the parties may be bound by New York litigation, “the court shall continue, stay, or dismiss the suit” filed by Laurie. Perry, 903 So.2d at 377. If the parties are not bound, the court may deny the motion to dismiss.

We note, parenthetically, that although the trust agreement contains a choice of law provision, it does not designate Florida as the principal place for administration of the trust. Unless specified in the trust agreement, the “principal place of administration of a trust” is “the trustee’s usual place of business where the records pertaining to the trust are kept or, if he or she has no place of business, the trustee’s residence.” § 737 .101(1), Fla. Stat. (2005). Accordingly, New York is the principal place for administration of the trust because the trustee is a resident of that state and the trustee’s attorney for legal matters pertaining to the trust is also in New York.

University of Miami v. Wilson, __ So.2d __, 2006 WL 1687685 (Fla. 3d DCA June 21, 2006)

The doctrine referred to in the headline for this blog post comes up most often in wrongful-death cases. For whatever reason the plaintiff is unable to be appointed personal representative of the estate prior to the statute-of-limitations period expiring. So he or she files the wrongful-death lawsuit before being appointed personal representative. Defendant responds by seeking to have the lawsuit dismissed arguing (a) that the named plaintiff lacked authority and (b) that since the statute-of-limitations period has since expired, the lawsuit is barred.

That’s essentially what the University of Miami, as defendant, argued in this case. UM lost at the trial court level and again before the Third DCA, which held that because the named plaintiffs were in fact ultimately appointed personal representatives their powers as personal representative “relate back” to the time they filed their lawsuit. Here’s an excerpt from the Third DCA’s opinion:

Ms. Wilson and Ms. Salmon argue that, because they were ultimately appointed personal representatives, their powers as personal representatives should relate back, thereby validating the actions they took prior to their appointment. We agree as there is both statutory and case law support for such a finding. Chapter 733 of the Florida Statutes is the Probate Code and deals with the administration of estates. Section 733.601, Florida Statutes (2002), specifically provides that

The duties and powers of a personal representative commence upon appointment. The powers of a personal representative relate back in time to give acts by the person appointed, occurring before appointment and beneficial to the estate, the same effect as those occurring after appointment. A personal representative may ratify and accept acts on behalf of the estate done by others when the acts would have been proper for a personal representative.

(Emphasis added in 3d DCA opinion).

Even early Florida jurisprudence recognized that acts of a personal representative prior to his/her appointment may be validated upon appointment. See Griffin v. Workman, 73 So.2d 844 (Fla.1954)(acknowledging the “ancient doctrine” which validates the acts of a personal representative prior to his appointment and noting that “a wide variety of acts and conduct” have been validated by subsequent qualification of an administrator, including an advancement to a distributee, the sale of estate property, the execution of a deed, and the institution of a wrongful death action); see also Talan v. Murphy, 433 So.2d 207, 208 (Fla. 3d DCA 1983)(holding that, although Talan brought a wrongful death action without having been appointed as personal representative, his subsequent appointment related back and his acts were thereby validated insofar as they were acts he could have performed had he been qualified as a personal representative, and finding that it was not necessary for him to allege in his original complaint that he was the personal representative).

(Emphasis added.)

Lesson Learned:

The general concept at issue here is whether a presumptive personal representative can act on behalf of the estate before being appointed. As the Third DCA pointed out in its opinion, this question comes up in various contexts, not just wrongful death claims. Probate lawyers should be aware of the “relation back” doctrine – you never know when it might just get your clients out of a jam.

I thought this Boston Globe article was interesting in that it tied Warren Buffett’s history-making charitable gift (see here) to the current debate on estate tax repeal.  Here are a few excerpts from the Boston Globe article:

Asked about recent efforts to repeal the estate tax, Buffett said he would “hate to see the estate tax gutted." Thursday, the House voted 269-156 to abolish the tax for all but the wealthiest Americans; the Senate is to take up the issue this week.

“I can’t think of anything that’s more counter to a democracy that dynastic wealth," he said. “The idea that you win the lottery the moment you’re born: It just strikes me as outrageous." Buffett, along with Bill Gates’s father, William H. Gates, a Seattle-based lawyer, have been among some of the most outspoken — and well-heeled — critics of repealing the estate tax.

Owens v. Estate of Davis, ex rel. Holzauser, __ So.2d __, 2006 WL 1716786 (Fla. 2d DCA June 23, 2006) 

In this case the decedent’s surviving wife claimed her statutory “elective share” (30%) of the estate. So the question then became: after wife gets her 30%, who gets the remaining 70% of the estate? The decedent’s will did not address this scenario, so what the probate court should have done is simply order that the remaining 70% of the estate pass according to Florida’s intestate succession law (F.S. § 732.103). That is not what happened. Instead one of the heirs apparently convinced the probate court that to figure out the most "equal or equitable" way of distributing the rest of the estate he should consider extrinsic evidence regarding what the decedent would have wanted to happen. The probate court went along with that approach and was reversed by the Second DCA. Here’s how the Second DCA summed up its rationale for reversal:

"The terms of Mr. Davis’s will are clear and unambiguous; however, the will does not specify how the probate court should distribute Mr. Davis’s residuary estate if his wife claims her elective share. When Mr. Davis’s wife claimed her elective share, rather than let the residuary estate pass according to the law of intestate succession, the probate court considered extrinsic evidence to determine how to distribute those assets. The trial court’s consideration of extrinsic evidence to “rewrite” the will was error:

The court may not alter or reconstruct a will according to its notion of what the testator would or should have done···· It is not the purpose of the court to make a will or to attempt to improve on one that the testator has made. Nor may the court produce a distribution that it may think equal or more equitable. In re Estate of Barker, 448 So.2d 28, 31-32 (Fla. 1st DCA 1984) (quoting 18 Fla. Jur.2d Decedent’s Property § 358, at 216)."

(Emphasis added.)