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ESTATE LITIGATION | PROBATE LITIGATION | TRUST LITIGATION | GUARDIANSHIP LITIGATION
ESTATE LITIGATION
a) Power of Attorney – A power of attorney is a document executed by one person (the “principal”) to give another person (the “attorney-in-fact”) the power to act on the principal’s behalf as if he were the principal. The Power of Attorney is a very powerful document and is subject to being abused by the attorney-in-fact, which can lead to litigation.
Did you know that …
• An attorney-in-fact can write checks on and withdraw funds from the principal’s bank account?
• An attorney-in-fact can execute deeds transferring title to real property, including homestead property?
• An attorney-in-fact can withdraw all of the funds from a joint account without the joint account holder's consent?
• An attorney-in-fact can change beneficiary designations on life insurance policies?
• A power of attorney is not valid when the principal dies?
• A power of attorney is not valid when the principal has been determined to be incapacitated by a court of competent jurisdiction unless it is a “durable” power of attorney?
Powers of Attorney can be challenged on various grounds. The validity of the document itself can be attacked on the basis of improper execution, undue influence, or lack of capacity. If the document itself appears to be valid, the attorney-in-fact can be charged with breach of fiduciary duty or tortious interference with an expectancy, among other causes of action.
b) Homestead/Real Property Disputes – Deeds can be prepared incorrectly or in a manner that does not comply with the intent of the individual transferring the property. Litigation can be used to correct either honest mistakes in execution and conveyance or deliberate fraud.
c) Forged Instruments – Sometimes instruments that leave property to beneficiaries outside of the probate process, like deeds, beneficiary designations, pay-on-death accounts, and joint accounts, have been created improperly through manipulation or outright deceit. Litigation can be used to undo the damage done by someone who is effectively stealing from a person (often an elderly person) or from that person’s intended beneficiaries.
PROBATE LITIGATION
a) Will Contest - a will contest is a form of litigation conducted in the probate court. There are several bases for contesting a decedent’s Last Will & Testament:
i) Mistake in Execution – Florida Statute §732.502 sets forth the execution requirements for a Will to be valid.
ii) Undue Influence – an undue influence claim challenges whether the person making the Will did so freely and without being coerced by a person who was in a position of trust and control.
iii) Lack of Testamentary Capacity - a lack of capacity claim is asserted based upon the belief that at the time the Will was executed the person making the Will did not have the requisite mental ability to understand a) the amount and nature of his property, b) the family members and loved ones who would ordinary receive such property, and c) how the Will disposes of such property. The standard for “testamentary capacity” is not as high as general competency. A person need only understand the nature and extent of his assets and the natural objects of his bounty (his family). Lack of capacity can be the result of the natural aging process or the result of a person being on a substantial amount of medication, e.g. heavy morphine to treat end-stage cancer. Lack of capacity litigation relies on medical records and the irrational conduct of the testator prior to executing the Will.
b) Will Construction – sometimes Wills are vague, beneficiaries have died or disappeared, or the document does not properly dispose of the entire estate. In these instances, the assistance of the court is sought to determine how a decedent’s estate should be distributed.
c) Determination of Heirs – sometimes a decedent leaves no will and had little contact with his family and the heirs (as defined by the intestacy statutes) need to be determined by the court. Sometimes, the decedent has formerly unacknowledged children who wish to prove paternity/maternity and make a claim in the estate.
d) Elective Share Litigation – the surviving spouse of a person who dies domiciled in Florida has the right to a share of the elective estate. In general terms, absent a valid pre-marital agreement, a surviving spouse has the right to claim 30% of the elective estate. See Florida Statute §732.2035 for a description of the property that enters into the elective estate. You might be surprised to learn that pay-on-death accounts and gifts made within one year of death can be included when determining the value of the elective estate.
e) Breach of Fiduciary Duty – a person appointed by the courts to administer a decedent’s estate has duties and responsibilities with which they are charged. Failure to properly administer an estate, either by overt act or by omission, can be actionable. Sometimes the remedy sought is removal of the fiduciary, but sometimes, when funds have been wasted or mismanaged or excessive fees have been taken, the remedy is a surcharge action. For a list of the duties and powers of the personal representative, see Florida Statute §733.601-619.
f) Removal of Fiduciary – a fiduciary may be removed by the court for cause.
g) Surcharge Action - The purpose of a surcharge against a fiduciary is to restore the losses sustained by the fiduciary’s breach of duty.
h) Accounting – Beneficiaries have the right to an accounting. If one has not been provided, then a beneficiary may seek the court’s assistance to compel the fiduciary to account for the estate assets. If an accounting has been provided and is objectionable for any reason, then the beneficiary may object to the accounting.
TRUST LITIGATION
a) Trust Contest
i) Mistake in Execution – an express trust is one that is written. An express trust must be executed in conformance with Florida Statute §737.111.
ii) Undue Influence - an undue influence claim challenges whether the person making the Trust did so freely and without being coerced by a person who was in a position of confidence (trust) and control.
iii) Lack of Capacity - a lack of capacity claim is asserted based upon the belief that at the time the Trust was executed the person making the Trust did not have the requisite mental ability to understand a) the amount and nature of his property, b) the family members and loved ones who would ordinary receive such property, and c) how the Will disposes of such property. The standard for “testamentary capacity” is not as high as general competency. A person need only understand the nature and extent of his assets and the natural objects of his bounty (his family). Lack of capacity can be the result of the natural aging process or the result of a person being on a substantial amount of medication, e.g. heavy morphine to treat end-stage cancer. Lack of capacity litigation relies on medical records and the irrational conduct of the testator prior to executing the Trust.
b) Trust Construction – Mistakes can be made or ambiguities can arise when Trusts are prepared and Florida has specific statutes that allow trusts to be revised or reformed, even after the Grantor’s death. Alternatively, sometimes a Trust is properly prepared, but circumstances have left portions of the trust ambiguous. For example, all of the trustees named in the trust have died and the trusteeship is left vacant. In all of these cases, the assistance of the court may be sought to resolve matters.
c) Breach of Fiduciary Duty - a person nominated by a trust document to serve as trustee has duties and responsibilities with which they are charged. Failure to properly administer a trust, either by overt act or by omission, can be actionable. Sometimes the remedy sought is removal of the fiduciary, but sometimes, when funds have been wasted or mismanaged or excessive fees have been taken, the remedy is a surcharge action. For a list of the duties and powers of a trustee, see Florida Statute §737.301-309.
d) Removal of Fiduciary – a fiduciary may be removed by the court for cause.
e) Surcharge Action - The purpose of a surcharge against a fiduciary is to restore the losses sustained by the fiduciary’s breach of duty.
f) Accounting - Beneficiaries have the right to an accounting. If one has not been provided, then a beneficiary may seek the court’s assistance to compel the fiduciary to account for the trust assets. If an accounting has been provided and is objectionable for any reason, then the beneficiary may object to the accounting and seek judicial intervention.
GUARDIANSHIP LITIGATION
a) Less Restrictive Alternative Means – guardianships are personally intrusive and expensive. Sometimes guardianships result from lack of planning. Sometimes, even when a person has the proper estate planning documents in effect, someone institutes a guardianship proceeding. Law firms can be hired to defend against an unwanted and unnecessary guardianship proceeding. Even if a person is found to be incapacitated, if he has done the property estate planning, the court is bound to chose the “least restrictive alternative means” if there are some available. A good example is when an incapacitated person has a revocable trust that holds his assets and a health care surrogate to allow an individual to make medical decisions on his behalf. In that scenario, even if the individual has severe dementia, a guardianship may not be necessary.
b) Breach of Fiduciary Duty – a guardian has certain duties and responsibilities, which are set forth in Florida Statute §744.361-462. If the guardian fails to comply with those duties, he may be sanctioned or removed.
