Undue Influence Florida

When can you get a summary judgment in Florida when there’s been undue influence? Not often.

RBC Ministeries filed a lawsuit to revoke probation of the will of Lewis Simoneau, and Barbara Topkins filed for summary judgment to allow the will to go forward, and won.  RBC Ministeries appealed, arguing that there was undisputed evidence establishing a legal presumption that Barbara Topkins exerted undue influence over Lewis Simoneau, who lacked testamentary capacity.  It was urged that the will was void, and a prior 1977 Will was legal (which named RBC Ministeries, not Barbara Topkins, as its residual beneficiary).

Undue influence is the overpersuasion, coercion or force that destroys or hampers the free agency and willpower of the testator.  If a main beneficiary has a confidential relationship with the person who signs the will, and is actively involved in that person finalizing that will, then the law will assume that the beneficiary unduly influenced the person making out their will.  Evildoing will be legally presumed, although the facts of each situation of “undue influence” are different.

Here, Barbara Topkins was present at the execution of the will by Lewis Simoneau.  She was present when Mr. Simoneau expressed a desire to make a will.  Barbara Topkins did not recommend an attorney to draft the will — she drafted the will herself, on her home computer – and obviously knew the contents of the will before it was signed by Mr. Simoneau.  She also found the witnesses to the will; they were neutral parties.  After the will was signed, Barbara Tompkins held onto it.

The appellate court reversed and remanded for further proceedings.  Under Florida law, Tompkins argument that evidence was needed to show that Simoneau’s will power was compromised fails – the undisputed evidence of undue evidence creates a legal presumption that Simoneau was not acting of his own free will.  Instead of summary judgment, Tompkins must return to the trial court and offer evidence to prove she had a reasonable explanation for her active role in his affairs.  Once the presumption of undue influence was established, summary judgment was no longer an option for Tompkins.

Practitioner Point: Burdens of proof may be litigation technicalities, but their importance cannot be underestimated when considering courtroom time and expense.  Here, the key issue is whether or not Lewis Simoneau’s true intent is expressed in his latest will – but who has the burden of proving that, and how they go about it – is obviously a complicated one.

Real World Point: It’s always a good idea to keep yourself at arm’s length when dealing with someone’s will.  No matter how close your relationship may be, it is best to avoid even the appearance of influence and this is easily done by hiring a probate practitioner to draft your will for you.

RBC Ministeries, Appellant, v. Barbara Tompkins, as personal representative of the Estate of Lewis A. Simoneau, Appellee, , 33 Fla. L. Weekly D 523 (February 15, 2008)

Appeal from Polk County Circuit Court Judges Ronald A. Herring and John F. Laurent, to Second District Court of Appeals (Opn: Justice Canady, Justices Fulmer and Casanueva concurring)

When is a Guardian barred from suing the doctors that allegedly caused her daughter’s brain damage?

Mrs. Thomas was named as plenary guardian for her daughter, Tammy, after Tammy suffered a heart attack and brain damage while giving birth to her baby.  Mrs. Thomas claims that Tammy wouldn’t have been hurt, except for the doctor taking too long to deal with Tammy’s high blood pressure.  On Tammy’s behalf, and she sued the doctor, the hospital, and others.

The trial court ruled that Mrs. Thomas took too long to bring the lawsuit, and it was barred as a matter of law by the Florida Medical Malpractice Statute of Limitations.  Under that Florida law, Mrs. Thomas has two (2) years to file suit.  Calculating  that deadline is key: on what date does time begin to run for the plenary guardian?

The appellate court answered that question by sending the case back to trial, ruling: (1) Guardians have a special limitations statute (744.394, Florida Statutes (2003)) that needs the exact date that the cause of action accrued for calculation; (2) when someone is incapacitated, the limitations deadline is put on hold so the defendant cannot unjustly benefit; (3) when an adult is incapacitated, it cannot be assumed that anyone else acts for them until they are legally appointed to do so; and (4) it becomes a question of fact in these situations as to when the adult’s legal guardian should have known or discovered with reasonable diligence that there was a possibility of a doctor’s error or medical negligence.  Back in the courtroom, Mrs. Thomas would have to prove that the date she knew or should have discovered the medical errors was within the limitations period.

Practitioner Point: Statutes of limitations are complicated, and suits over when that time bar truly exists are expensive for all involved.  From a probate litigation standpoint, the faster that investigations begin and facts are accumulated, the better the chances of victory in any limitations fight.

Real World Point: Guardians like Mrs. Thomas, acting on behalf of a loved one’s best interests, deal with such a burden: there’s the emotional toll, as well as the decision-making, record-keeping, and other details and duties.   Still, the adage is true:  the earlier the better when it comes to filing suit.

Sarah Thomas, as Plenary Guardian, etc., Appellant, v. Fernando Lopez, M.D., et al., Appellees, 33 Fla. L. Weekly D 1072 (April 18, 2008) Appeal from Orange County Circuit Court Judge Reginald Whitehead, to the Fifth District Court of Appeals (Opn: Justice Orfinger, Justices Torpy and Lawson concurring)

Trust Language Isn’t Set in Stone — Should the Nurse Get the Apartment? Maybe. The Trustee Has Standing to Argue She Should Via Reforming the Language of the Trust.

Cecilia Reid was Edgar Sonder’s nurse for several years.  Being a responsible man, Edgar Sonder created a “pour over” trust in May 2000, naming himself as trustee.  (A “pour over” trust is a trust that is funded by assets “pouring over” from an estate, and is a common vehicle used in estate planning.)

Later, Mr. Sonder amended the trust, naming Nurse Reid as its sole successor trustee.  The trust in its final version (Edgar Sonder amended the document twice before he died) included instructions on how his assets were to be distributed; several gifts were itemized.

First, $31,000 was to be distributed among ten different charities (Art. II, section 1); second, and importantly, after the first gifts were completed, $125,000 was to be given to the Hebrew Union College Jewish Institute of Religion (Art. II, section 2); and third, again after the prior gifts were given, various assets were to be distributed as gifts to certain, named individuals (Art. II, section 3).  Among those listed in this third round of gifts was nurse Cecilia Reid, with the trust dictating that Nurse Reid was to receive $25,000 and the apartment Mr. Sonder resided in at the time of his death, together with its furnishings.  The residue of his estate was likewise given to Cecilia Reid.

Edgar Sonder died on May 12, 2005.  His will was admitted to probate, and Cecilia Reid was accordingly appointed personal representative.  An inventory revealed that there were not sufficient assets within the estate to complete the gifting desires of Mr. Sonder, as described in the three sections of Article II of the pourover trust.

Cecilia Goes to Court

So, Cecilia Reid went to court and asked that these enumerated, financial gifts be abated proportionately and that the apartment itself be legally deemed as a devise, and not subject to abatement at all.  She was unsuccessful; the lower court denied her motion for abatement and the appellate court affirmed that decision in Reid v. Hebrew Union College-Jewish Institute of Religion, 947 So. 2d 1178 (Fla. 3d DCA 2007).

Cecilia Goes to Court, Again

Cecilia Reid’s next step was to approach the court in her role as sole trustee, petitioning for the trust to be reformed and arguing that the trust instrument did not evidence Edgar Sonder’s intent, which was to give his apartment to his nurse, Cecilia Reid, and not have it be subject to abatement.

The Same Attorney for the Settlor in Drafting and the Trustee in Court: a Man with Many Hats

To bolster her argument, Nurse Reid attached handwritten notes that Edgar Sonder had given his estate planning attorney describing how he wanted his assets distributed after his death.  Reid also filed the sworn affidavit of the attorney who had prepared both the trust and its two amendments for Edgar Sonder.

There, the estate planning attorney swore that Edgar Sonder intended to devise as a specific gift, not subject to any priorities, the apartment and its contents to his nurse, Cecilia Reid.  He also swore that the court’s decision to convert the apartment, and its contents, to a general gift subject to abatement violated the intent of Edgar Sonder due to the error of the scrivener.

Interestingly, this same attorney, William Palmer, was also representing Cecilia Reid as she made her arguments before the court.  The fact that Mr. Palmer was a man wearing many hats was a situation that did not go unrecognized by Reid’s opponents.

The Nurse is Challenged by Fellow Beneficiaries – and so is her Attorney

Two beneficiaries of Mr.Sonder’s benevolence, the Temple Judea (Art. II, section 1) and Hebrew Union College (Art. II, section 2), vigorously challenged Cecilia Reed and William Palmer.

First, they fought to remove Attorney Palmer from the proceedings, moving the court to disqualify him because he had been the attorney who prepared the underlying documents.  The trial court denied their request.

Second, they argued that Trustee Cecilia Reid lacked standing to bring a lawsuit seeking to reform the trust, because (1) she was “not an ‘interested person,’ instead she was a volunteer and stakeholder in the Trust, having no personal stake in the outcome;” (2) as trustee, she owed a fiduciary duty of loyalty to all the beneficiaries to act impartially; and finally, (3) that the appellate court had already affirmed the decisions of the lower court on how the trust’s distribution provisions (Article II, sections 1, 2, 3) were to be read and carried out.  The trial court agreed with this argument, and dismissed Reid’s suit because she lacked legal standing to bring it.

So, Reid appealed again.

With Edgar Sonder’s trust again before the Florida appellate court, the reviewing court held that Cecilia Reid did have standing to petition the court to reform the trust. The trial court’s decision was reversed, and the case remanded for further proceedings.

The basis of their decision was not only the law in place at the time Mr. Souder signed the trust documents and its amendments, but current statutes and precedent, as well as that incorporated into the trust by its own language. (The Edgar Sonder Trust expressly states, “the Trustee has the powers now or hereafter provided by law.”)

Equitably, Cecilia Reid has standing because a trustee has standing to seek reformation of a trust as part of the trustee’s general obligations to follow the settlor’s true intent and purposes in discharging his/her duties in managing the trust. Here, the trustee acts as an indispensable party in all proceedings affecting the estate, and “clearly has standing to seek reformation.”

Statutorily, Cecilia Reid has standing because Florida statutory law has consistently allowed a trustee to change or modify the terms of a trust when complying with the trust’s existing terms will frustrate the settlor’s purpose.  The rationale behind this power to modify necessarily encompasses the power to reform, the appellate court held, and in support of its opinion quoted the legislative history of § 736.0415, Fla. Stat. (2007).

Bottom line, the appellate court held that the trustee had legal standing to seek reformation of a trust either before or after enactment of section 736.0415, and Cecilia Reid has been given the right to proceed in the lower court in her attempts to prove that the true intent of Edgar Sonder was to give her his apartment, and its furnishings, outright.

Practitioner Point: This case is far from over – and curious by its absence is any discussion by the appellate court on the argument to disqualify the attorney who is effectively in the courtroom advancing his own affidavit as key evidence to prove his position.  This is a textbook example of why our firm acts as experienced probate litigation co-counsel with probate practitioners across the state.

Real World Point: Even though your trust is an official document which legally controls, those notes and memoranda that you write, detailing your intent and wishes regarding your assets and estate, can be very important.   They can be truly invaluable to a probate litigator if what you really wanted to happen with your estate even comes into question.

Cecilia Reid, as Trustee of the Edgar Sonder Trust, Appellant, vs. Temple Judea and Hebrew Union College Jewish Institute of Religion, Appellees, 33 Fla. L. Weekly D 1546 (June 11, 2008) Appeal from Miami-Dade County Circuit Court Judge Arthur L. Rothenberg, to the Third District Court of Appeals (Opn: Justice Wells, joined by Justices Rothenberg and Salter)

A Lesson in the Power of a Florida Joint Tenancy with Right of Survivorship (JTWROS) Bank Account

Boy meets Girl; Boy puts Girl’s name on his bank accounts; Girl kills Boy: can Girl get the cash? Broward County Circuit Court tells Girl no, Fourth District Court of Appeals reverses, says answer is yes.

John Russo and Michelle Julia never married, but their romantic relationship lasted several years.  In June 2005, John opened an account at Bank of America in his own name and less than two weeks later, he added Michelle’s name to that account.  In March 2006, John opened an investment account as well as a bank account with Charles Schwab; six weeks later, John added Michelle to those two accounts, too.

On May 19, 2006, Michelle Julia shot and killed John Russo.  Less than one month had passed since her name had been added to the Schwab accounts. Read the rest of this entry

Deadbeat Dad Can’t Use Last Mom’s Last Minute Will Change to Escape Payment to Ex-Wife:

CALIFORNIA COURT USES CONSTRUCTIVE TRUST THEORY TO DEFEAT LAST MINUTE WILL CHANGE BY MOTHER INTENDED TO HELP SON AVOID CHILD SUPPORT LIEN ON HIS INHERITANCE.

In an interesting opinion that could have implications in Florida, a California Appellate Court recently used the legal remedy of a constructive trust to allow a testator’s ex-wife to sue her ex-husband and his sister after they allegedly coerced their mother into changing her will just prior to her death, to give to her daughter the share of the estate given to her son in a prior will so that he could avoid child support obligations.

In Cabral v. Soares, 69 Cal.Rptr.3d 242 (Ct.App.2007) Tammy Cabral, the Plaintiff, filed a Complaint alleging that as of November 2005 her ex husband James was delinquent in paying court-ordered spousal and child support in the approximate amount of $134,000, and that since 1998 he had “on several occasions been found in contempt” for the failure to pay his support obligations. The complaint alleged that James had taken various steps to avoid enforcement of the support obligations, including “not having a regular job with wages . . . and working in a way that he would be paid in a manner that prevented plaintiff from enforcing the support obligations.” The complaint alleged, “Until shortly before her death, the will of Edwina Cabral provided that her three children would each receive a one-third interest in her estate,” which included the family home in Newark, California with a free and clear market value in excess of $500,000, so that James “would have received enough money to pay the past due support obligations in full.” ” Tammy sued Mary Soares and James E. Cabral, who she alleged realized that the one-third interest of James E. Cabral would end up getting used to pay the past due support owed to plaintiff. In order to prevent that from happening, those defendants, according to Plaintiff, conspired and agreed to have the will modified shortly before Edwina Cabral died. The modification was to have the one-third interest of James E. Cabral instead get paid to Mary Soares so that she would end up with a two thirds interest. Plaintiff alleged that the intent of this arrangement . . . was that Mary Soares would take the one-third interest of James E. Cabral, that Mary Soares would then hold that money, and that Mary Soares would then later get that money to James E. Cabral in a manner to prevent plaintiff from receiving it for the past due support obligations.”

The complaint further alleged that Edwina’s will was so modified on May 10, 2005 (with a bequest to James of “the paltry sum of $1,000″), that Edwina died less than two months later. Finally, the Complaint alleged that “the last minute change in the will of Edwina Cabral very shortly before her death was probably done at a time when Edwina Cabral was not aware of what she was doing, was not mentally competent, was subject to undue influence by Mary Soares and James E. Cabral, and was not the true expression of her intent since she had always previously expressed that she wanted to leave her estate to her three children in equal shares of one-third each. The change was therefore not really a knowing and intelligent change by Edwina Cabral, but was a manipulation by Mary Soares and James E. Cabral. Alternatively, the Complaint alleged that “if Edwina Cabral was aware of what was being done, then she also was doing it for the purpose of defrauding plaintiff and of manufacturing a charade to have the money go to James E. Cabral through Mary Soares in a way that was designed to keep plaintiff from being paid what the court ordered James E. Cabral to pay for support.”

Tammy Cabral sued her former husband, James Cabral and his sister, the executrix of Edwina Cabral’s estate, under five different legal theories: (1) the last minute change to the will of Edwina Cabral” was a fraudulent transfer within the meaning of the California Uniform Fraudulent Transfer Act; (2) the family home should be held in a constructive trust for plaintiff’s benefit up until and to the extent required to pay the past due support obligations in full; (3)the property should be held in a resulting trust; (4) declaratory relief as to the rights and liabilities of the parties, including the rights of plaintiff to be paid from the one-third interest that James E. Cabral has in the estate and the property; (5) conspiracy.

The trial court dismissed Tammy Cabral’s claims, explaining that her action constituted a will contest and must be brought in probate court before she could bring her claims sounding in tort.

The ruling was appealed and the California Appeals Court for the First Appellate District reversed the trial court. In its opinion, the Appellate court highlighted that there was a domestic relations court order which had been previously entered in earlier proceedings. That Court order The court assigned to plaintiff “until such time as the judgment herein is fully satisfied or this order is amended” “[a]ll rights to payment that [James] has from any third party” including “any right to payment that [James] may have now or in the future from Mary Soares or from Joseph Cabral or from any other source that relates to the will of Edwina Cabral, the estate of Edwina Cabral, and/or any assets or funds from the will and/or estate of Edwina Cabral.”

The domestic relations, or sometimes called family court, court ordered assignment, and the alleged agreement between the Decedent and her two children to change the will in an effort to avoid the court ordered assignment of inheritance funds to plaintiff, served as the logical predicate for the California Appeals court to conclude that plaintiff could proceed under a constructive trust theory. The court held that plaintiff could request that the trial court impose a constructive trust on one-half of what Mary receives under Edwina’s will, that is, upon the one-third of Edwina’s estate received by Mary that allegedly was intended for James.

In the view of the California Appeals Court, what was significant was that James and Mary allegedly were parties to an agreement, and that Mary and Edwina so agreed and that Edwina allegedly changed her will in reliance on that agreement. Quoting Bogert, the California Court held that “[W]here A is induced to make a will in favor of B . . . by the oral promise of B to hold for C, the courts are nearly unanimous in England in decreeing that B must hold in trust for C, and the same is true as to the courts of the United States.” (Bogert, Trusts and Trustees (2007) Constructive Trusts, § 499, fns. & italics omitted.)”

This is also the rule in Florida. Florida Courts have consistently held that a constructive trust will arise by operation of law against one who, by actual or constructive fraud, by duress or abuse of confidence, by mistake, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, has acquired the legal right to property he or she ought not, under equitable principles, hold and enjoy. Picallo v. Picallo, 443 So. 2d 190 (Fla. Dist. Ct. App. 3d Dist. 1983); Turturro v. Schmier, 374 So. 2d 71 (Fla. Dist. Ct. App. 3d Dist. 1979); Staples v. Battisti, 191 So. 2d 583 (Fla. Dist. Ct. App. 3d Dist. 1966); Small Business Admin. v. Echevarria, 864 F. Supp. 1254 (S.D. Fla. 1994).

Further, in Florida, Tammy Cabral may in fact have been able bring a direct challenge to the last minute will. The California Court suggested that the will of Edwina Cabral that was in effect until the change just before her death provided that her three children would each receive a one-third interest in her estate, which included the family home so that James would have received enough money to pay the past due support owed to plaintiff. Depending on the exact language of the will, it may well be found that Tammy Cabral was a prior beneficiary under the prior will who would be able to bring a direct challenge to the will admitted to probate, even though she was not specifically mentioned in the challenged will, and was not a blood relative of Edwina Cabral.

The Florida Probate Code’s definition of “interested person” would probably include Tammy Cabral. “Interested persons” can participate in probate proceedings and are defined “any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved.” Fla. Stat. § 731.201(21). Also, it is possible that Tammy Cabral, under Florida law, and under the circumstances presented in the California opinion, could achieve a favorable result by challenging only the gift provision of the last minute will, thereby leaving the revocation clause in effect. This is because Fla.Stat. § 732.5165 provides that “a will is void if the execution is procured by fraud, duress, mistake, or undue influence. Any part of the will is void if so procured, but the remainder of the will not so procured shall be valid if it is not invalid for other reasons.” Thus, under Florida law, Tammy Cabral’s successful challenge of only the gift provisions of the last minute will, leaving the revocation clause in effect, would have the effect of revoking all prior wills and forcing Elwina Cabral’s estate to pass by intestacy. Since James would take 1/3 of Edwina’s estate under the laws of intestacy, James would receive the inheritance that was subject to assignment and attachment under the prior domestic relations child support obligation order. See generally, Wehrheim v. Golden Pond Assisted Living Facility, 905 So.2d 1002 (Fla. 5th DCA 2005).

Florida Homestead Law

About Face by Third District Court of Appeals Advances Creditors Claims to Constitutionally-Protected Homestead Property:  General Direction to Pay Estate Taxes Trumps Constitutional Homestead Protections.

In a surprising reversal, the Third District Court of Appeals on Tuesday, September 3, 2008, reheard and reversed its own opinion issued almost 19 months ago in Cutler v. Cutler, In Re:  The Estate of Edith Alice Cutler, 2008 WL 4057751, 33 Fla.L.Weekly D2103a (3rd DCA, No. 3D07-3070, Sept. 3, 2008).

The opinion is significant for probate administration and litigation attorneys, and estate planning professionals for at least two reasons: (1) The Third District Court of Appeals joins the Fifth District in expanding the types of interest in land that may qualify for homestead protection; (2) a general direction in the administrative language at the end of a Will may now trump constitutional homestead protections.

Cutler involved a Decedent, Edith Cutler, who created a land trust naming herself and her two children, Edward and Cynthia as co-trustees.  Edith, by deed, conveyed her residence and an adjacent vacant lot to the trust, subject to a life estate in herself.  Edith was the sole beneficiary of the trust and she retained the right to withdraw and appoint the principal of the trust to or for her benefit at any time.  The trust provided that the remainder interests in these properties, which were titled to the trust, would be distributed to Edith’s estate upon her death.

Edith also executed a will, in which she specifically devised the residence titled to the trust to Cynthia and the adjacent vacant lot to Edward.  She also directed that her debts be satisfied equally from both properties should the funds in her estate be insufficient to satisfy those debts.

After Edith’s death, Edward sought to have the two parcels devised to Edith’s estate for equal abatement to satisfy all of Edith’s creditors since the estate funds were insufficient to pay Edith’s debts.  The trial court concluded that the residence retained its homestead status while titled in the trust and passed outside of the estate and vested in Cynthia upon Edith’s death retaining its exemption from Edith’s creditors after her death.

Edward appealed and the Third Circuit originally decided, on February 28, 2007, (“Cutler I“) that because Edith both had a life estate in the residence property and occupied it continuously before her death pursuant to the right provided to her in the irrevocable land trust, she was an “owner” of her residence for purposes of devising the homestead protection on that residence on her death.  Further, the Court joined other Districts in expanding the types of interest in property to which the homestead exemption applies.  Specifically, Edward argued that because the property was titled in an irrevocable trust at Edith’s death, it was not owned by a “natural person” and therefore, the constitutional protections did not apply.  The Third District held:

“This court and other district courts of appeal consistently have found that properties held in trust can be impressed, legally speaking, with the character of homestead. Callava v. Feinberg, 864 So. 2d 429, 431 (Fla. 3d DCA 2003)(“[t]he constitutional provision does not designate how title to the property is to be held and it does not limit the estate that must be owned”) (internal citations omitted) rev. denied, 879 So. 2d 621 (Fla. 2004); HCA Gulf Coast Hosp. v. Estate of Downing, 594 So. 2d 774, 776 (Fla. 1st DCA 1992) (devise of house to spendthrift trust irrelevant for purposes of homestead under Article X, section 4 of the Florida Constitution (2003)). Although these cases involve revocable trusts, we find no reason to limit the holdings of these cases to revocable trusts. Accordingly, we find it immaterial that legal title to the residence in this case was held in an irrevocable trust during Edith’s lifetime. The conveyance to Cynthia fulfills all of the legal requirements entitling her to claim that it is “protected homestead” in her.”

The Cutler I Court also held that “strict legal propositions” and “settled law” in Florida required it to deny Edward’s argument to attach the homestead property for purposes of payment of estate debts.  The Cutler I Court, relying upon long standing precedent, reasoned that since the homestead property vested in Cynthia “in the twinkle of an eye” immediately upon Edith’s death, it passed outside of the estate.  Since the homestead property was never part of Edith’s estate and was never a probate asset, the property, nor the proceeds from the sale of the property, were subject to creditor’s claims due to the Florida Constitutional Homestead Protections.

Fast forward nineteen months to Wednesday, September 3, 2008.  The Third Circuit turns about face 180 degrees and reverses itself.  While the Court affirmed the part of its order confirming the property at issue retained its homestead character, even though it was titled in an irrevocable trust at the time of death, it reversed the part of its February 28, 2007 Order finding the property exempt from the payment of decedent’s debt!

Relying upon legal principals of testamentary construction, the Court looked to the plain language of the administrative provisions of Edith’s Will, and found that she directed that her debts be satisfied equally from both properties should the funds in her estate be insufficient to satisfy those debts.  Essentially, the Court treated Edith’s decision to use boilerplate language in the administrative payment portion at the end of her Will as the equivalent of her choosing to devise her homestead property while she was alive in a manner that terminates the protections accorded by the Florida Constitution (i.e., if Edith had sold her property during her life and distributed the proceeds to Cynthia, those proceeds would unquestionably lose their homestead character.)  While the Court recognized that “the benefits of homestead protections vest in a qualified beneficiary at the moment of a testator’s death, the property in this case passed into the beneficiary’s hands impressed with the obligation to pay the testatrix’s debts, and obligation that deprived the property of homestead protection under article X, section 4.”  Cutler II at p.10.

This fascinating and alarming decision should send a message to all probate practitioners to be wary of using boilerplate language in estate planning documents.  The language in Cutler, which the Court relied on to strip Edith’s residence of its homestead protection, was that seen in everyday practices:

[Article XII:  I direct that] [a]ll claims, charges and allowances against, and costs of administration of []my Estate…shall be paid out of the residuary portion of my Estate to the extent that gift suffices.  The balance of such items shall be paid out of and shall reduce equally the gifts under Article VI (the gift to my home to Cynthia…) and Article VII (the gift of the vacant real property next to my home to Edward…) herein.

Justice Shepherd issued a blistering dissent pointing out the break with long standing precedent, and the clear language of the Constitution, that the exemption from forced sale of Edith’s property to satisfy her debuts that inured to Edith’s benefit during her lifetime “inure to [the] heirs of the owner” upon her death.

The lesson to be learned from this case, in my view, is to not put too much stock in stare decicis et quieta non movere in matters that implicate creditors’ rights in Florida, and to be extra careful when drafting general directions to pay estate taxes.  My feeling from reading the opinion is that had Edith simply chosen language that allowed her estate to pay her debts, without specifying that debts were to be paid equally from each property, the decision would have remained in the form in which it originally appeared in February, 2007.