What is a Trustee?  Who is a personal representative?

Is a Florida trustee’s fiduciary duty different from a Florida personal representative’s?  To answer this question, you must first ask what is the difference between a trustee and a personal representative.

A trustee is someone or some entity appointed in a trust to perform the tasks listed in the trust, which typically include the distribution of assets to the beneficiaries and handling any other issues that may arise in the administration of the trust.  A trust is a private document and is usually prepared for tax purposes, creditor protection and avoiding probate.  A personal representative is someone or some entity list in a Will or appointed by the probate court to administer the estate of a deceased person. 

The duties and responsibilities of a trustee and a personal representative are listed in different sections of the Florida Probate Code (Fla. Stat. §§736 and 733, respectively), but Fla. Stat. §733.602(1) states as “a personal representative is a fiduciary who shall observe the standards of care applicable to trustees.”

Although the duties of a Florida trustee and personal representative are listed in different sections of the Code and Florida law goes into much further detail regarding the duties and responsibilities of a trustee, ultimately the law provides that the duties and responsibilities of a trustee and a personal representative are essentially the same and may be used interchangeably.  The Florida law makers believed that because a trustee and a personal representative are appointed with the important job of administering assets and have been trusted with great power and responsibility, it makes sense that each one should be held to similar standards.

For further information regarding the differences between a trustee and a personal representative and whether either one is fulfilling its fiduciary duties, it may be in your best interest to contact a Florida trust and estate lawyer or probate attorney.                 

Personal Injury Gainesville, Florida crashes:  Interstate 75 Alachua County.   

In a series of overnight accidents in northern Florida, blamed on poor visibility from smoke from a nearby brush fire, authorities said at least ten people were killed in the crashes.  Most of the collisions were on Interstate 75, in Northern Florida according to the Alachua County Sheriff’s Office. Crashes also occurred on U.S. Highway 441 near Gainesville, Florida.  The National Weather Service in Jacksonville had issued a dense smoke advisory due to nearby fires which cut visibility to less than a mile.

Car crashes, motorcycle accidents, medical malpractice, and other tragic events that form the basis of many personal injury lawsuits in Florida.  Where death is involved, they usually include the filing of a claim for damages resulting from the victim’s wrongful death against the negligent person.   Damages based upon wrongful death can include a wide variety of things, from seeking reimbursement for funeral expenses to the long-term loss of parental guidance and support for the decedent’s children. 

Wrongful death litigation can be complicated.  Calculating the monetary damages, including estimating the number of years the decedent otherwise would have lived, is difficult.  Determining what individuals are the proper parties in the wrongful death lawsuit can also be problematic.  For example, a personal representative is the person authorized to file a lawsuit in a wrongful death case.  But who is the proper personal representative?  Sometimes a surviving spouse from a second marriage will file a wrongful death lawsuit and not include the correct beneficiaries. Other times a dispute will exist as to who will serve as the personal representative and thus who will control the decisions and the money from any award of the wrongful death lawsuit.

In an attempt to insure justice when someone’s life has been taken due to the wrongful act of another, specific statutes have been established in the State of Florida.  The Florida law regarding wrongful death has been entitled “the Florida’s Wrongful Death Act” by the Florida legislature, and the Act itself can be found as part of the Florida statutes, in Sections 768.16-768.26 of the Florida statutes’ chapter dealing with Negligence.

Those who may sue under the Florida Wrongful Death Act for compensation under its tenets are defined in the Act as “survivors” under Section 768.20 and are limited to the following people:

• the decedent’s spouse;
• the decedent’s children born of a marriage;
• a decedent mother’s children born out of wedlock;
• a decedent father’s children born out of wedlock if the father, prior to his death, recognized a responsibility for the child’s support;
• the decedent’s parents; 
• any blood relatives partly or wholly dependent on the decedent for support or services;
• any adoptive brothers and sisters partly or wholly dependent on the decedent for support or services.

What monetary awards are available under the Wrongful Death Act have been detailed in the law, as follows (in Section 768.21):

(1)  Each survivor may recover the value of lost support and services from the date of the decedent’s injury to her or his death, with interest, and future loss of support and services from the date of death and reduced to present value. In evaluating loss of support and services, the survivor’s relationship to the decedent, the amount of the decedent’s probable net income available for distribution to the particular survivor, and the replacement value of the decedent’s services to the survivor may be considered. In computing the duration of future losses, the joint life expectancies of the survivor and the decedent and the period of minority, in the case of healthy minor children, may be considered.

(2)  The surviving spouse may also recover for loss of the decedent’s companionship and protection and for mental pain and suffering from the date of injury.

(3)  Minor children of the decedent, and all children of the decedent if there is no surviving spouse, may also recover for lost parental companionship, instruction, and guidance and for mental pain and suffering from the date of injury. For the purposes of this subsection, if both spouses die within 30 days of one another as a result of the same wrongful act or series of acts arising out of the same incident, each spouse is considered to have been predeceased by the other.

(4)  Each parent of a deceased minor child may also recover for mental pain and suffering from the date of injury. Each parent of an adult child may also recover for mental pain and suffering if there are no other survivors.

(5)  Medical or funeral expenses due to the decedent’s injury or death may be recovered by a survivor who has paid them.

(6)  The decedent’s personal representative may recover for the decedent’s estate the following:

(a)  Loss of earnings of the deceased from the date of injury to the date of death, less lost support of survivors excluding contributions in kind, with interest. Loss of the prospective net accumulations of an estate, which might reasonably have been expected but for the wrongful death, reduced to present money value, may also be recovered:

1.  If the decedent’s survivors include a surviving spouse or lineal descendants; or

2.  If the decedent is not a minor child as defined in s. 768.18(2), there are no lost support and services recoverable under subsection (1), and there is a surviving parent.

(b)  Medical or funeral expenses due to the decedent’s injury or death that have become a charge against her or his estate or that were paid by or on behalf of decedent, excluding amounts recoverable under subsection (5).

(c)  Evidence of remarriage of the decedent’s spouse is admissible.

(7)  All awards for the decedent’s estate are subject to the claims of creditors who have complied with the requirements of probate law concerning claims.

(8)  The damages specified in subsection (3) shall not be recoverable by adult children and the damages specified in subsection (4) shall not be recoverable by parents of an adult child with respect to claims for medical negligence as defined by s. 766.106(1).

Florida Trust Decanting:  Phipps v. Palm Beach Trust Co., 196 So. 299 (Fla. 1940) and Florida Statute §736.04117

“Decanting” is the legal term used to describe the distribution of trust property from one trust to another trust pursuant to the trustee’s discretionary authority to make distributions to or for the benefit of one or more beneficiaries.  Common law provides authority for trust decanting, but several states – including Florida – have codified the common law.  Florida Statute §736.04117 became effective on July 1, 2007.

Under common law, a trustee with absolute power to invade principal is the equivalent of a donee of a special power of appointment.  Restatement (Second) of Prop.: Donative Transfers §11.1  Absent a contrary provision in the governing document, a donee of a power of appointment may exercise such power in a manner which is less extensive than authorized by the instrument creating the power.  Thus, “the rationale underlying decanting is that if a trustee has the discretionary power to distribute property to or for the benefit of one or more current beneficiaries, then the trustee, in effect, has a special power of appointment that should enable the trustee to distribute the property to a second trust for the benefit of such beneficiaries.”  William R. Culp, Jr. & Briani Bennett Mellen, Trust Decanting: An Overview and Introduction to Creative Planning Opportunities, Real Property, Trust and Estate Law Journal, Spring 2010, p. 3. The theory is that if there is authority to distribute outright, then there is authority to distribute in further trust. Alan Halperin and Michelle R. Wandler, Decanting Discretionary Trusts:  State Law and Tax Considerations, 29 Tax Management Estates, Gifts & Trusts Journal, 219, 221 (2004).

In 1940, the Supreme Court of Florida considered whether a trustee, who was specifically authorized by the trust document to appoint the trust property among beneficiaries in whatever proportions he desired in his sole discretion, could create a second trust for the benefit of the beneficiaries funded with property distributed from the first trust.  Phipps v. Palm Beach Trust Co., 196 So. 299 (Fla. 1940).  In Phipps, the settlor, Margarita Phipps, created a trusts for the benefit of her four children.  She named Palm Beach Trust Company and her husband as co-trustees.  Her husband was given a personal power of appointment, exercisable during life by written instrument delivered to the corporate trustee or at death in his Last Will & Testament, in favor of the four children and/or their descendants in whatever proportions as he shall determine.  In compliance with the express terms of the trust, Mr. Phipps provided written directions to the corporate trustee to create a second trust for the descendants.  The corporate trustee, in an abundance of caution, brought a suit in equity praying for construction of the original trust. 

The Phipps court held that the creation of the second trust was permissible because the trustee had both a lifetime and a specific testamentary power to direct distributions to trust beneficiaries.  Ergo, the trustee’s power was a power of appointment instead of a discretionary power to distribute trust property.  The Phipps holding does not provide authority for the position that a trustee with a purely discretionary power held in a fiduciary capacity can transfer assets to a new trust.  Florida Statute §736.04117 codifies the principal holding in Phipps. 12 Fla.Prac., Estate Planning §6:41 (2010-2011 ed.).  In summary, the statute provides that a trustee who has absolute power under the terms of the trust to invade principal may make distributions to a second trust if those beneficiaries include only those beneficiaries of the first trust without reducing any fixed income interest.  The exercise of the decanting power is to be done by an instrument in writing, signed and acknowledged by the trustee and filed with the records of the first trust.  Additionally, the trustee shall notify all qualified beneficiaries of the first trust, in writing, at least 60 days prior to the effective date of the trustee’s exercise of the power to invade the principal and must set forth the manner in which the trustee is planning to exercise the power.  The trustee’s notice under this section shall not limit the right of any beneficiary to object to the exercise of the trustee’s power to invade the principal.  Fla.Stat. §736.04117.

Procedurally, the documents employed for a trust decanting should be similar to those used with respect to a resolution to distribute property.  A written document providing the terms of the trustee’s discretionary exercise of the power to decant should set forth the terms of the exercise of the power to appoint trust property further in trust.  It should set forth background information or recitals identifying (1) the current trustees of the original trust and the trustees that are exercising the decanting power (2) when the original trust was formed and by whom (3) the relevant terms of the original trust (4) the trustee’s authority for the decanting, whether pursuant to statute or the trust instrument, and (5) the appointee trust that will receive trust property from the original trust.  The decanting document should also include trustee resolutions designating and appointing assets of the original trust to the appointee trust and directing the appointed assets be held in accordance with the appointee trust.  William R. Culp, Jr. & Briani Bennett Mellen, Trust Decanting: An Overview and Introduction to Creative Planning Opportunities, Real Property, Trust and Estate Law Journal, Spring 2010, p. 43.

Recognition of a German Will in the USA (formal validity)

by Jan-Hendrick Frank, Esq.

This article provides an introduction to the recognition of German Wills in Florida.

German Wills:  Formal requirement under German law

Under the German Civil Code (“BGB”), the testator can choose between two forms of traditional wills (§2231 BGB): 1) The public or notarized will (§2232 BGB), and 2) the holographic or handwritten will (§2247 BGB). Witnesses are not required for the validity of a holographic or notarized will under German law. Unlike the U.S., witnessed wills are uncommon in Germany.  

State of Florida

According to 732.502 (2), Fla.Stat., a will must be in writing, signed by the testator and authenticated by two witnesses. A holographic will is without force or effect under Florida law. There is no regulation with regards to foreign wills. However, if the decedent died domiciled in Germany, it may be valid under the applicable terms of the German civil code. Additionally, from the perspective of a German court it may be valid (see decision of the German supreme court, BGH IV ZR 135/03) and, thus, it may be advisable to sue in Germany.

Recognition of a German hand-written will (holographic will): A German hand-written will not authenticated by two witnesses is therefore to be considered formally invalid in the state of Florida (Schuler v. Salathe, 703 So.2d 1167 (1997)) as far as Florida law applies.

Recognition of a German notarial will (notarized will):  A German notarized will not authenticated by two witnesses is therefore to be considered formally valid in the state of Florida as far as Florida law applies.

Here are some tips to locate a good probate lawyer in Florida:

Look at the experience level of the attorney. Does the lawyer focus their area of legal practice to probate, trusts and estates?

Review the information on the firm’s Web site.  Does the information look relevant and focused?

Ask for referrals…especially former clients.

Contact The Florida Bar to confirm the lawyer is in good standing.

Investigate whether the law firm has good infrastructure.  Ask about support staff, technology, billing practices and procedures for attorney/client communication.

Probate Attorney-Palm Beach County, Florida

The lawyers of Adrian Philip Thomas, P.A. represent clients throughout the State of Florida, including Palm Beach County, Florida.  Palm Beach County, Florida is the largest county in the state of Florida in total area and third in population. As of 2010, the county’s estimated population was 1,320,134.  Palm Beach County is one of three counties comprising the South Florida metropolitan area. Its largest city and county seat is West Palm Beach.  Boca Raton is the second largest, having a population approaching 90,000 and Boynton Beach is the third largest city, with a population nearing 70,000 residents.

With a large retirement population and wealthy coastal towns such as Palm Beach, Jupiter, Manalapan, and Boca Raton all within the Palm Beach County limits, it is Florida’s wealthiest county which makes it a haven for exploitation of the elderly, undue influence and fraudulent last will and testament cases. 

If you are looking for a Palm Beach County, Florida probate litigation attorney, call Adrian Philip Thomas, P.A. at 1-800-249-8125

Florida Elder Abuse Attorney

An elder abuse attorney in Florida can mean many different things.  An elder abuse lawyer can refer to an elderly person being harmed in a nursing home or an elder abuse lawyer can mean a probate lawyer who is hired after or before death to correct an injustice done to an elderly citizen.  Our law firm receives inquires asking us to represent relatives who believed their love ones were financially exploited and they refer to this financial abuse as elder abuse.  Probate disputes perhaps always involve an old person being taken advantage of – the issue is whether a skilled probate lawyer can get the evidence to prove the financial exploitation.

THE POWERS AND LIMITATIONS OF POWERS OF ATTORNEY, AND CHANGES TO FLORIDA STATUTE 709

AS OF OCTOBER 1, 2011:  PART I.

 Nearly all men can stand adversity, but if you want to test a man’s character, give him power.  Abraham Lincoln

Recent legislation has conformed Florida’s Power of Attorney Statute 709 to the Uniform Power of Attorney Act, with certain modifications, in an attempt to achieve greater consistency among the 50 states and Washington D.C.  On May 4, 2011, the Florida legislature passed Senate Bill 670, on June 21, 2011 the Florida Power of Attorney Act was signed into law by Governor Scott, and it became effective October 1, 2011.  Florida Statute 709 applies to powers created by individuals (with four exceptions), and does not apply to powers created by entities or corporations.  Florida Statute 709 applies to all Powers of Attorney used in Florida and governed by Florida law.  Florida Statute 709.01-709.11 has now become Florida Statute 709.2101-709.2402.

When a Powers of Attorney was executed before October 1, 2011 which conferred rights to an agent (or attorney-in-fact), those rights acquired under the Power of Attorney predating October 1, 2011 will continue to apply, as follows:  Florida Statute 709.2402(3) states, “[w]ith respect to a power of attorney existing on October 1, 2011, this part does not invalidate such power of attorney and it shall remain in effect.  If a right was acquired under any other law before October 1, 2011, that law continues to apply to the right even if it has been repealed or superseded.”

Under Florida Statue 709.2104, in order for a Power of Attorney to be durable, it must contain the words:  “This durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in chapter 709, Florida Statutes,” or similar language specifically indicating the principal’s intent that the authority conferred is exercisable notwithstanding the principal’s subsequent incapacity.

For a Power of Attorney to be valid if executed after October 1, 2011, the agent (or attorney-in-fact) named in the Power of Attorney must be 18 years of age or older or a financial institution that has trust powers, has a place of business in this state, and is authorized to conduct trust business in this state.  Not just any financial institution will be permitted to take power as an agent after October 1, 2011.  The financial institution must meet the criteria as set forth in Florida Statute 709.2109(1).

What happens if the Power of Attorney was executed prior to October 1, 2011, but the agent named was a financial institution that does not meet the specific criteria as set forth in Florida Statute 709.2109(1)?  The Power of Attorney is valid if its execution complied with the law of Florida at the time of its execution pursuant to Florida Statute 709.2106(2).

Also, for the Power of Attorney to be valid if executed after October 1, 2011, it must be signed by the principal and also by two subscribing witnesses before a notary public pursuant to Florida Statute 709.2105(2).

What happens if the Power of Attorney was executed in another state which does not comply with the execution requirements in Florida?  Pursuant to Florida Statute 709.2106(3), a Power of Attorney executed in another state which does not comply with the execution requirements in Florida will be valid in Florida as long as it complied with the execution requirements of the state of execution at the time it was executed.

The new law now states that a photocopy of a Power of Attorney or an electronically transmitted copy of an original Power of Attorney has the same effect as the original pursuant to Florida Statute 709.2106(5).  This change in the law may create problems as an unscrupulous person may attempt to alter the Power of Attorney, then photocopy or electronically transmit the altered version in an attempt to utilize the powers conferred in the altered version of the Power of Attorney.  If you believe a person named as the agent or attorney in fact of a Power of Attorney is breaching their fiduciary duty, self-dealing, squandering assets, not investing the principal’s assets prudently, or utilizing an altered Power of Attorney, it is imperative that you promptly contact a skilled and competent attorney so that the appropriate action can be taken, including but not limited to the commencement of litigation against the person abusing the power of attorney.

Elder Law – Abuse of the Elderly

In the context of trust and estate litigation, clients occasionally believe the conduct of others rises to the level of criminal liability.  While filing a lawsuit for breach of fiduciary duty or undue influence can help the client collect money, there are times that a client believes that getting money is insufficient.  Short of requesting charges be filed by the police or State Attorney, there is a Florida law that is commonly referred to as the abuse of the elderly statute that goes beyond the traditional recovery of money when a senior adult is abused.

The elder abuse statute (Florida Statute §415.1111) allows for the prosecution of abuse, neglect or exploitation on behalf of a vulnerable adult against any perpetrator.  Such an action pursuant to the statute must be brought by the vulnerable adult, that person’s guardian, by a person or organization acting on behalf of the vulnerable adult with the consent of that person or that person’s guardian, or by the personal representative of the estate of a deceased victim without regard to whether the cause of death resulted from the abuse, neglect or exploitation.  The statute permits recovery of reasonable attorney’s fees, costs and damages to a party who prevails, and the remedies are in addition to other legal and administrative remedies available to a vulnerable adult.

What can make this statute challenging in the trust and estate litigation context is the threshold issue of standing.  Standing is a party’s right to make a legal claim or seek judicial enforcement of a duty or right.  For a child of an elderly (“vulnerable”) parent to be able to bring a claim under 415.1111 on the parent’s behalf, he or she must either be the guardian of the parent, have the parent’s consent, or be appointed personal representative of the parent’s estate after death.  So as far as estate (“post-death) litigation goes, to satisfy the standing issue one must be the personal representative.

In trust litigation, the elder abuse law does not apply easily.  What is the remedy for a child who is replaced as co-trustee with the parent on a revocable trust by a new acquaintance who does not have the parent’s best interest at heart?  Without consent of the parent to file an elder abuse lawsuit, the child must petition for and be appointed guardian by the Circuit Court.    It has been argued that a very comprehensive durable power of attorney may grant to the child such consent as to confer standing under Florida Statute 415.1111. 

The abuse of elderly law is an additional arrow in the quiver of the estate and trust litigation lawyer.

THE POWERS AND LIMITATIONS OF POWERS OF ATTORNEY

With Great Power Comes Great Responsibility.  Voltaire

There are important differences between standard powers of attorney and durable powers of attorney but each document is ripe for being abused.  A standard power of attorney document provides the authority for another person  (the agent or attorney-in-fact) to make decisions and take actions on the principal’s behalf when the principal is unable to do so for himself or herself.  In the event the principal becomes physically incapacitated, and not able to pay bills or banking transactions or the principal plans to travel and needs to have documents signed while away, then the ordinary or standard power of attorney document would authorize the principal’s chosen agent or attorney-in-fact to execute documents, receive and pay bills and make banking transactions on the principal’s behalf.  A standard power of attorney would become invalid if the principal became mentally incapacitated.

A durable power of attorney (even more likely to be used for improper, illegal and selfish reasons) is a document that authorizes the principal’s chosen agent or attorney-in-fact to execute documents, receive and pay bills and make banking transactions on the principal’s behalf, but would remain effective even if the principal became mentally incapacitated.  It is possible to have the power of attorney document drafted to be broad in scope, giving the agent or attorney-in-fact the authority to make any and all property, financial, medical and personal decisions for the principal; or the power of attorney document could be drafted to authorize the agent or attorney-in-fact to perform very limited, specific duties for the principal.

Florida Statute 709.08 outlines how to create a durable power of attorney, who may serve as the agent or attorney-in-fact, and provides information as to the durability of the power of attorney in Florida Statute 709.08(3)(b), which states:  “The attorney in fact may exercise the authority granted under a durable power of attorney until the principal dies, revokes the power, or is adjudicated totally or partially incapacitated by a court of competent jurisdiction, unless the court determines that certain authority granted by the durable power of attorney is to remain exercisable by the attorney in fact.”  So, if the durable power of attorney is drafted to include specific language granting the attorney in fact authority to act, even after the principal has been deemed incompetent, that authority will remain intact until the death of the principal.

A little known fact is Florida law (Florida Statute 709.08(7)) outlines the powers and limitations of the durable power of attorney.   The attorney in fact has full authority to perform, without prior court approval, every act authorized and specifically enumerated in the durable power of attorney, but may not: 

1) perform duties under a contract that requires the exercise of personal services of the principal;

2) make any affidavit as to the personal knowledge of the principal;

3) vote in any public election on behalf of the principal;

4) execute or revoke any will or codicil for the principal;

5) create, amend, modify or revoke any documents or other disposition effective at the principal’s death or transfer assets to an existing trust created by the principal unless expressly authorized by the precise language of the power of attorney because when the principal dies, the attorney in fact has no further authority to act for the principal; or

6) exercise powers and authority granted to the principal as trustee or as court-appointed fiduciary.  The attorney in fact cannot execute documents for the principal as trustee if the principal had been appointed the trustee of a trust.

The attorney in fact is held to a high standard of care pursuant to Florida Statute 709.08(8).  They must exercise a standard of care applicable to a trustee of a trust, and if the attorney in fact’s exercise of power is improper, they will be liable to interested persons for damage or loss resulting from their breach of fiduciary duty as the attorney in fact to the same extent as a trustee of an express trust.  If the power of attorney exceeds their power, exercises improper powers, breaches their fiduciary duty, self-deals, acts as a trustee for the principal, or does not invest the principal’s assets prudently, the interested persons may have standing to initiate litigation against the power of attorney.

Inevitably, relatives abuse powers of attorney.  They confuse the power granted to them with the improper use of that power by serving their own selfish financial gain.  With great power comes great responsibility to protect the person granting the power.  Far too often, my clients hear the threat “I can do whatever I want to with the power of attorney.” 

If you believe a person holding the power of attorney is breaching their fiduciary duty, self-dealing, squandering assets, or not investing the principal’s assets prudently, it is imperative that you promptly contact a skilled and competent attorney so that the appropriate action can be taken, including the commencement of litigation against the person abusing the power of attorney.