Court of Appeals Expands Reach of Genova

There is growing concern over our legislature’s inability to make laws protecting the elderly and vulnerable against having their revocable trust funds taken from them during their lives. This is a topic I have previously discussed. (See blog dated September 25, 2008, Undue Influence and Trust Revocation.) The problems addressed in my earlier blog articles arise from the Florida Supreme Court’s opinion issued twenty-five years ago in Florida National Bank of Palm Beach County v. Genova, 460 So. 2d 895 (Fla. 1984). As is evident from the Fourth District Court of Appeals ruling this week in MacIntyre v. Wedell, (Fla. 4th DCA, 08-754), 34 Fla.L.Weekly D1011a (May 20, 2009), Genova is alive and will remain so unless and until our elected officials decide to change the law. (more…)

Court Refuses to Use Merger to Disinherit Former Spouse.What is the doctrine of merger?

The doctrine of merger is set forth in the Restatement of (Third) Trusts §69, which provides that if the legal title to the trust property and the entire beneficial interest become united in one person, the trust terminates. The comments to this section of the Restatement also states that if by inter vivos transfer, will, or operation of law the entire beneficial interest in trust property passes to the trustee, the trust terminates and the trustee holds the property free of trust.

Thus, if the sole beneficiary of a trust dies intestate and his interest passes to the trustee as his heir, merger occurs and the trust terminates. Similarly, if the trustee is also the life beneficiary of the trust, and if the sole remainder beneficiary, holding an indefeasibly vested remainder interest in the trust, assigns her interest to the trustee or dies and leaves her interest to the trustee, the trust terminates. (more…)

Court holds trust instrument was effective in transferring both real and personal property to the trust.Prior to Florida’s adoption of the new Trust Code, which became effective on July 1, 2007, the common law held that in order for a trust to be created, the settlor was required to make a present and unequivocal disposition of property so that he or she is no longer vested with its full legal and equitable ownership. For example, it has been held in Florida that the failure of a settlor to execute a deed which conveyed real estate to the trustees of a trust precluded the creation of a “living trust” for the realty. Flinn v. Van Devere, 502 so.2d 454 (Fla. 3d DCA 1986). Although the new Trust Code is now effective, it provides that the common law of trusts and principles of equity supplement the Code, except to the extent modified by the Code or another law of Florida. Fla. Stat. §736.0106. This leaves a lot of “gray” area in the law of trusts, and whether certain attempts to transfer property into a trust are valid.

I’m always interested in how our sister jurisdictions handle problems in connection with attempts to transfer real and personal property into a trust that might fall short of the formalities required by the Uniform Trust Code. One such case recently surfaced in our Midwestern sister state of Nebraska in Chebatoris v. Moyer 757 N.W. 2d 212 (Neb. 2008). (more…)

In Florida, and many other states, there are protections written into the probate code which purport to protect children from unintentional disinheritance by one or both of their parents. Florida’s pretermitted child statute is codified at Fla. Stat. §732.302 and is intended avoid an unintentional or inadvertent disinheritance of a child. Florida’s statute is modeled in part after the position adopted by the Restatement of Property and the Uniform Probate Code.

The Restatement of Property provides:

§ 9.6 Protection Of Child Or Descendant Against Unintentional Disinheritance

(a) A child of the testator, or under some statutes a descendant of the testator, who was not provided for in the testator’s will may be entitled to a specified share of the testator’s estate as provided by statute. Most of the statutes, including the Original and Revised Uniform Probate Code, only protect a child who was born or adopted after the will was executed.

(b) A child of the testator who was not provided for in the testator’s will because the testator thought that the child was dead may be entitled to a specified share of the testator’s estate as provided by statute.

(c) The omitted child or descendant is entitled to the specified share unless a contrary intent or other statutory exception is established. (more…)

California Court Refuses to Allow Trust No Contest Clause to Disinherit Minor Child Who Challenges Conduct of TrusteesIt is a shame when probate courts apply the law in a manner that hurts children. I applaud a recent decision from California that refused to apply a no-contest provision contained in a trust instrument that could have resulted in a minor child being disinerhited simply by virtue of the child’s guardian asking the court to examine the conduct of the trustees. The case Safai v. Safai, 164 Cal.App.4th 233, 78 Cal.Rptr.3d 759 (2008) is a great example of a court’s careful application of the law in order to protect a child from disinheritance. The facts of the case are as follows:

Mansour Safai and Susanne Gahnstedt were married for approximately eight years and had one child, Nicolai, before their marriage deteriorated into divorce. Pursuant to the marital settlement agreement regarding property and spousal support, Mansour agreed to pay child support for Nicolai.
Mansour was diagnosed with a terminal illness in 2004, and on or about January 24, 2006, executed the Trust and a Last Will and Testament. Mansour succumbed to his illness on February 9, 2006, and was survived by his brother, Max Safai; his sister, Massoumeh Safai; and his mother, Parvaneh Assefi. (more…)

Third District Finds Miami Probate Court Erred in Requiring Litigants to Prove Undue Influence as Part of a Breach of Fiduciary Claim. Court Finds Lawyer Used Client’s Money as His Own “Piggy bank.”

On February 25, 2009, the Third District Court of Appeals released its much anticipated opinion regarding the Brigham Tree Farms Trust litigation. Brigham v. Brigham, –So.2d–, 2009 WL 454492; (Fla. 3rd DCA, Feb. 25. 2009), 34 Fla.L.Weekly D443b involved, in part, a dispute over the trust assets which originated as a the multimillion dollar tree farm encompassing around 800 acres of land in western North Carolina.
In order to understand the facts of the case, you will probably need to make a family tree outlining the various parties and there relevance in connection with EFP Brigham and his wife Marion, and the table consanguinity: (more…)

Can a joint and contractual trust be revoked by sole surviving settlor?

Florida law recognizes that parties may execute joint and mutual testamentary instruments. One Florida court held that a joint and mutual will may be the product of a contract providing that it cannot be revoked except by the mutual consent of the parties and providing that it be binding on the survivor, and where the terms of the will clearly disclose that it is the product of such a contract, the will itself is sufficient evidence to establish the contract. See, In re Estate of Rowland, 504 So.2d 543 (Fla. 4th DCA 1987). (more…)

Second District Court of Appeals Finds Old Trust Code Inapplicable to Action Based on Undue Influence and Breach of Fiduciary Duty and Notes Distinction Between Concepts of Venue and Jurisdiction

Frequently, when representing trust beneficiaries or trustees, I encounter a defensive argument that Florida isn’t the proper venue for the trust litigation. Venue is the legal concept of the appropriate location for a lawsuit to be heard by a Court.

Venue is a concept distinct from jurisdiction, which focuses on the authority of a court to hear a particular case. Venue is concerned with the geographical location of the court where a lawsuit is commenced. However, unlike personal jurisdiction, there is no constitutional requirement for proper venue in order to have a valid judgment. (more…)

Resulting trusts are a fiction of the law that arises where property is transferred or acquired by one under facts and circumstances which indicate that the beneficial interest is not intended to be enjoyed by the holder of legal title.

A case some readers may have read about in recent newspaper headlines involved a legal theory based on a resulting trust remedy. In City of Boston v. Roxbury Action Program, Inc., 68 Mass. 1101, 865 N.E2d 1140 (2007) the city of Boston became aware that a landowner, which was obligated to convey land to the city due to an inability to obtain a government commitment for housing development on property. The City went to Court claiming that the landowner was holding the property for the City under a resulting trust, since it wasn’t, in the city’s view, the parties’ intention for the landowner to hold the beneficial interest in the property. Unfortunately for the city, the court held that this awareness (of six years) repudiated any resulting trust more than six years before city brought action seeking conveyance of the property such that the statute of limitations barred resulting trust claim; any claim for resulting trust arising through city’s act in providing purchase monies for the property was inseparable from the rest of the dealings between the parties, including landowner’s obligation to re-convey the property on the date specified by agreement, and pursuant to the city’s contract with landowner, the city was to be updated monthly on landowner’s activities related to the development of the property. (more…)

Learn the Language: Fifth District Court of Appeals Reverses Probate Judge and Predicates Opinion On its Own Perception of Trust Language and “Settlor’s Intent”In Brown v. Miller, — So.2d —-, 2008 WL 4600940, 33 Fla.L.Weekly D2433c, Fla.App. 5 Dist., October 17, 2008 (NO. 5D07-1356, 5D07-1288) the Fifth District Court of Appeals reversed Orange County Judge Lawrence Kirkwood’s order which had invalidated a seven million dollar transfer from a testamentary trust to its lifetime beneficiary.

The Wife
Elinor Miller set up a trust naming her husband Bill as the trustee and lifetime beneficiary (the “Elinor Miller Trust”). After her death the assets remaining in the trust (after her charitable bequests and distributions to family members) were divided into three separate sub-trusts, designated as Trust A-1, Trust A-2 and Trust B with each serving a distinct purpose.

The Elinor Miller Trust provided that the Trustee should pay Bill the income from A-1 and A-2, in addition to “such amounts from the principal of Trust A-2 first and then liberally for his maintenance, health, and support in his accustomed manner of living, taking into account all of his other income and means of support known to the Trustee. The Trustee shall also pay [Bill] such additional amounts of principal from Trust A-2 as he may from time to time request.” Further, the Trust provided that upon Bill’s death, the “Trustee shall pay over and distribute the then remaining balance of Trust A-2, if any to such person or persons, and in such manner, as he shall appoint by his Last Will and Testament, which makes reference to said power of appointment, including in him the power to appoint to his estate. Any portion of Trust A-2 not effectively appointed by [Bill] shall continue to be held in trust for the lifetime of my son, [Tom].” Id. (more…)