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Capacity to Create a Trust in Florida

Written by on Sep 21, 2012| Posted in: Guardianship Litigation

Florida guardianship lawyers frequently encounter disputes in connection with what rights a vulnerable adult should have judicially delegated to a guardian.  Those disputes often develop into contests regarding the duration of those delegated rights and whether and to what extent the rights can and should be restored to the alleged incapacitated person.  Many factors and variables enter the legislatively created mechanism for determining these issues.

Sometimes, prior to, during, and even after incapacity proceedings, the Florida guardianship lawyer will discover that a family member or other person has orchestrated the execution of a will or trust by the alleged incapacitated person.  These situations present difficult legal and ethical issues for the Florida guardianship attorney.

The Florida Trust Code contains a section providing that “a trust is created only if: (a) the settlor has capacity to create a trust.”  §736.0402(1)(a).  Proceedings to determine the competency of a person are controlled by statute and where a statute prescribes a certain method of proceeding to make that determination, the statutes must be strictly followed. Under Florida Statutes, before depriving an individual of all of their civil and legal rights an individual must be incapable of exercising his rights at all, whether wisely or unwisely.  However, the Fourteenth Amendment of the United States Constitution in Article I, Section 9 of the Florida Constitution provides that no person shall be deprived of their fundamental rights without due process of law.  Procedural due process under the Florida Constitution guarantees to every citizen the right to have that course of legal procedure which has been established in the Florida judicial system for the protection and enforcement of private rights applied in his or her case.

These principles were addressed recently in In Re: Karim H. Saadeh, 37 Fla.L. Weekly D1696 (4th DCA), Case Number 4D09-3974, 4D09-4879, 4D10-149, 4D10-1193, and 4D10-3991 (July 18, 2012).

In Saadeh, a man in his 80’s had children who he discovered had drained his bank account.  Ultimately, the children consulted a lawyer and petitioned through a professional guardian for incapacity for the appointment of a guardian to exercise all delegable rights of Mr. Saadah.  At the same time, the professional guardian also filed a Petition for an Emergency Temporary Guardian and scheduled a hearing six days after the filing of the Petition.

At the hearing, the court found that the evidence showed Saadeh was diagnosed with high state Alzheimer’s and was in danger of financial abuse.  The court removed all of Saadeh’s rights except his right to vote and the order also appointed the professional guardian as an emergency temporary guardian and delegated to her the power to exercise all delegable legal rights and powers of the ward with the exception of Saadeh’s right to vote.

Subsequently, in what appears to be an effort by the children to “settle” the guardianship, the professional guardian/emergency temporary guardian had Mr. Saadeh sign a new trust agreement.  Thereafter at a hearing to determine incapacity, the court considered the examining committee reports and based upon the unanimous determination of the examining committee that Mr. Saadeh was competent the court dismissed the Petition for Incapacity.

As the 4th DCA pointed out, however, “Unfortunately, this did not end the litigation, far from it.”  Saadeh had already filed the Petition to Revoke the Trust.  In his Petition, he claimed the following:

  1. He had executed the trust upon undue influence, coercion and duress without understand its terms;
  2.  His children participated in the coercion and duress imposed on him and stood to gain substantially through the provisions of the trust;
  3.  He was denied the right to consult with counsel of his choice;
  4.  The trust was inconsistent with the terms he previously discussed he would be willing to enter;
  5.  He did not agree to a trust that he could not revoke; and
  6.  Because he had never agreed to the trust when the settlement was presented to the trial court, a fraud on the court had been committed.

The Fourth District Court of Appeal found that the attempted amendment to the trust during the pendency of the incapacity proceedings was irregular, illegal and rendered the trust amendment invalid.  The trust amendment was invalid because neither the emergency temporary guardian (ETG) nor even the court-appointed counsel for Mr. Saadeh intended to restore any right to Mr. Saadeh during the period of the temporary guardianship.  In fact, the same guardian/counsel made statements to the court that all Mr. Saadeh’s rights had been removed at a hearing on the same day he had executed the trust agreement.  The Fourth District Court of Appeal affirmed the trial court’s ruling that once the ETG assumes the rights for the ward, those same rights are thereby removed from the ward and both cannot simultaneously exercise those rights.  Because the original order had delegated to the ETG all legal rights reserving only the right to vote in the ward, the right to contract (for example sign the trust amendment) by Mr. Saadeh had been removed at the time the trust was executed.  Therefore, because Mr. Saadeh did not have the right to contract at the time the trust was executed, it was invalid pursuant to §736.0402.

This case demonstrates the necessity of strict compliance with all guardianship statutes and underscores the importance of the procedural and substantive due process safeguards built into Chapter 744, Florida Statutes.  It is important reminder that citizens and Florida attorneys who handle contested guardianships to remain mindful of strict compliance with the procedural’s framework for contested guardianships in Florida.

If you have a question about whether someone has the capacity to create a trust in Florida, call the Florida guardianship lawyers at Adrian Philip Thomas, P.A. for a consultation.

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