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Oral Agreement to Divide Inheritance

Written by on Jun 10, 2014| Posted in: Estate Litigation

ORAL AGREEMENTS SUFFICIENT UNDER FLORIDA LAW TO DIVIDE INHERITANCE FROM PARENTS

Can siblings verbally agree to divide an inheritance prior to their parent’s or grandparent’s death?  The answer in Florida is Yes.

In is widely accepted that in order for an agreement between parties to be legally binding and enforceable by a court or judge, at least four elements must be present:  (1) offer; (2) acceptance; (3) specific terms; and (4) consideration.  What is consideration? Consideration is simply a bargained for change in legal position between the parties.    One way to describe how the element of consideration is usually viewed by courts is to look at whether or not the parties making the promises to each other are either doing something that they are not under a legal obligation to do;  or refraining from doing something that they have a legal right to do (i.e., surrender or forebear from asserting a legal claim).  The majority rule, and that followed by most states,  is that consideration is sufficient if there can be demonstrated a detriment to the promisee and that a benefit to the promisor alone will not be sufficient consideration.  Florida, however, follows the minority view (and that of the First Restatement of Contracts, which is that either a benefit to one party or a detriment to the other party will suffice to provide sufficient consideration for a court to find a valid and binding contract.

The issue of sufficiency of consideration arose recently in a case where an oral agreement to split a parent’s inheritance was found to be sufficient consideration where an oral agreement by two children to split the inheritance of their parent was found to be sufficient consideration as each child would be entitled to half a share and cannot be disinherited by their mother, who continuously threatened to disinherit one or the other.  See Ferguson v. Carns, 125 So. 3d 841 (Fla. 4th DCA 2013).  The case began by a Complaint filed to enforce an oral contract and arrived at the Fourth District Court of Appeals after Final Summary Judgment was entered against the Plaintiff’s brother and against the Defendant sister.  The brother and sister were the only living children of their wealthy mother who it was alleged had threatened at different times to disinherit each of them.  The Complaint alleged that the brother and sister entered into an oral contract where they agreed that if one was disinherited, they would divide evenly between them whatever property was received from the mother’s estate.  The mother eventually disinherited the brother and left everything to the daughter.  The sister refused to divide the inheritance and the brother filed the Complaint with a Florida Inheritance Dispute lawyer alleging breach of contract.  The sister moved for Summary Judgment claiming that the contract was an unenforceable promise because there was no consideration.  The court first looked at the elements for an oral contract which must meet the elements of a written contract: (1) offer; (2) acceptance; and (3) consideration, in sufficiently specific terms.  The court found that the promises in this case constituted a consideration, because the promises were by parties who agreed to do something that they were not legally bound to do.  The court found that consideration existed because each of the children gave up the possibility of inheriting more than the other in return for ensuring they would receive some inheritance.  The court found that these should be viewed as mutual corresponding promises.

This fact pattern appears frequently in Florida disputes involving Wills and Trusts.  If you have a question regarding the enforceability of an oral contract in connection with an inheritance dispute, you should carefully consider contacting a Florida Probate lawyer to assess your legal situation.

 

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