Florida Probate Litigation

Probate litigation often involves a will contest. Probate litigation is also a term used to describe a challenge to trust because trust disputes in Florida are litigated in the probate court.  Probate litigation, trust contests and Florida will contests are one of the most hotly-contested areas of the law, used by surviving family members to correct an array of injustices.

Probate litigation is the broad concept which may include challenging:

1. the validity of a Last Will and Testament;
2. a provision within the Last Will and Testament;
3. the terms of a Trust;
4. the validity of a person’s other estate planning documents;
5. the appointment of a personal representative (known in some states as an “executor”);
6. the actions of a personal representative; or
7. an elective share.

Our law firm concentrates its practice in Florida probate litigation.  Visit our website www.florida-probate-lawyer.com for a detailed reference on most probate and trust litigation topics.

Florida Probate Blog

My law firm contributes relevant topics to our law firm’s Florida probate blog which are designed to educate and inform both lawyers and non-lawyers.  Blogs dealing with probate and trust issues are not designed to legal advice concerning estates, probate, guardianship or trust litigation issues, but are intended as a general introduction to the specific area of concern.

Our previous blogs include topics dealing with:

• Probate Litigation
• Estate Litigation
• Trust Litigation
• Guardianship Litigation
• Wrongful Death Litigation
• Undue Influence
• Lack of Mental Capacity
• Probate Administration
• Probate for Resident Aliens / Non-US Citizens
• Ancillary Probate Matters
• Elective Share Option
• Power of Attorney
• Will Contests
• Breach of Fiduciary Duty/ Heir & Beneficiary Rights

If you would like to subscribe to our Florida Probate Blog, you can input your email address under “subscribe” or click on the RSS feed button.

Let’s say your father passed away with $200,000 in his estate and you are the only heir.  If your father had owed money on the date of his death, the estate would be obligated to satisfy that creditor prior to you obtaining your inheritance.  Florida law provides that a devise (distribution) owed to a beneficiary is subject to charges for debts, expenses, and taxes.  In our example, if the creditor claim was for $100,000, it would be paid first, and you would then inherit the $100,000 remaining in the estate. 

However, what if your father only had $90,000 on the date of his death, yet still had the $100,000 creditor?  Unfortunately, your father’s estate would be insolvent and your inheritance may be completely wiped out. 

Now suppose that the person who owes the estate is a child who convinced his father to make a quick change to his last will and testament specifically forgiving the debt that is owed by the son to the decedent.  What if the only funds in an estate available for distribution to the other children are to come from the child who owe money to the estate but whose obligation is now forgiven?

Prior to April of this year, no Florida court had addressed the issue of whether the release and forgiveness of an obligation (debt) in a will operates to defeat the payment of obligations and expenses of an estate.  In other words, are debt forgiveness clauses in wills enforceable?  The court in Lauristen v. Wallace—So.3d.—2011, WL 1195873 (Fla. 5^th DCA Apr 01, 2011), addressed the issue when the will of a father had a provision that forgave the debt of his son.  However, the only estate asset was this debt owed to the decedent; the estate was otherwise insolvent and could not pay for other debts and expenses.  The court held that a decedent can release a debt owed to the decedent through a will only to the extent that the decedent’s estate is solvent to pay all debts and administrative costs of the estate.  Therefore, such clauses may not be enforceable when the estate lacks the funds to pay its debts and expenses but may be enforceable if debts and expenses are paid but still leaving nothing to disburse to the beneficiaries. 

 You must always be wary of the solvency of the estate when making decisions on strategy and how expenses and distributions are to be made from the estate.  Florida courts have made yet another distinction between solvent and insolvent estates and all parties, especially the personal representative, must be aware of these distinctions.

Can I fire my trustee?

We receive numerous inquiries from clients asking, “How can I fire my Trustee?”  In Florida, “firing a Trustee” is called a trustee removal action, through which an interested party may seek to remove a trustee of a trust, sometimes for reasons other times for no cause.  Florida Trust law contains specific statutes which address the removal of trustees.

According to Florida Statute §736.0706, removal of a trustee may be sought by the settlor, a co-trustee, or any beneficiary. In addition, a court may remove a trustee on its own. Grounds for removal include a serious breach of trust, lack of cooperation among co-trustees, and unfitness, unwillingness, or persistent failure to effectively administer the trust. Any action to remove a trustee on these grounds would be considered a removal “for cause.”

Florida Statute §736.0706, also permits the removal of a trustee without cause at the request of all of the qualified beneficiaries, or upon a showing of substantial change in the circumstances. Removal on these grounds does not require proof of any breach of fiduciary duty, malfeasance or other grounds for removal. It requires only that the removal of the trustee (or firing of the trustee as some like to say) best serves the interests of all beneficiaries, that it not be inconsistent with a material purpose of the trust, and that a suitable co-trustee or successor trustee be available.

So whether your trustee is treating the trust like his own personal checking account, repeatedly failing to provide accountings or reasonable information regarding the assets of your Trust, failing to invest prudently, or any other grounds which could constitute a serious breach of trust, or you just don’t feel the trustee is providing any benefit and a suitable replacement trustee is ready and willing to take over at a lower cost, you as a beneficiary, co-trustee, or settlor, has the ability to seek removal through the Court.

Florida Homestead Law Update

On October 1, 2010, Florida Statute 732.401(2) was added to update Florida Homestead law, as least partially in response to the escalating insurance and property tax rates in recent years.

Under the old Florida Homestead law, if a decedent did not devise his  homestead property pursuant to the requirements of the Florida Constitution and was survived by a spouse and at least one lineal descendant, then the surviving spouse would receive only a life estate with the remainder passing to the descendant(s).

A life estate might sound great, but it comes with many financial responsibilities, including: property taxes, insurance, special assessments (if applicable), mortgage interest, etc.  Furthermore, if the remainder beneficiaries refused to agree to sell the property, there was not much recourse for the surviving spouse.

The new Florida Homestead law allows a surviving spouse to elect to receive a tenant-in-common, one-half interest in the decedent’s homestead property instead of a life estate.   This interest allows the surviving spouse and the lineal descendants to have separate and – most importantly – severable interests in the property.  The election must be made within six months after the decedent’s death and must be made during the surviving spouse’s lifetime.  The election is irrevocable once made.

The new Florida Homestead law provides some much needed relief to surviving spouses who were being burdened by the very laws created to protect them.

Elder Law Concepts is not always for the Elderly.

In some cases, a parent may see their child go through a sudden, unexpected fight with cancer; a brother may be trying to take advantage of his wealthy but impaired sibling by stealing his financial assets; or a daughter might have witnessed the advisors of her mentally incompetent mother conspiring to misappropriate her assets.   There may be circumstances where immediate action is necessary in order to protect the health and/or financial welfare of such a person.  In these cases, an adult interested in the welfare of a loved-one may wish to petition the court for an emergency temporary guardianship (ETG).  While, the typical ETG is used for incapacitated senior citizens, there are scenarios with teenagers and other young adults who may be abusing drugs and/or alcohol as to warrant the imposition of an emergency temporary guardianship. 

 §744.3031 (1), Florida Statutes, states as follows regarding the requirements for the appointment of an emergency temporary guardian:

The court must specifically find that there appears to be imminent danger that the physical or mental health or safety of the person will be seriously impaired or that the person’s property is in danger of being wasted, misappropriated, or lost unless immediate action is taken. 

If appointed with the task of being the emergency temporary guardian, this guardian would be required to take an oath to faithfully perform the duties of a regular guardian.  This temporary guardianship will last for 90 days or until a permanent guardian is appointed, whichever comes first.  Such duties would include the handing of the ward’s finances, the making of medical decisions if no healthcare surrogate had been nominated, and the overall maintenance of the ward’s affairs.  Additionally, the emergency temporary guardian must file a final report of the ward’s financial status no later than 30 days after the expiration of this appointment.    

The most important factor for the court to assess in deciding whether an emergency temporary guardian is necessary is how apparent the “imminent danger” actually is to the person in question.   

The interpretation and application of “imminent danger” is extremely subjective and varies on a case-by-case basis.  Although case law is rather bare on the subject, the court in Batzle v. Baraso, 776 So.2d 1107 (Fla. 5^th DCA, 2001) approved the appointment of an emergency temporary guardian when the ward was diagnosed with a progressive form of cancer.  In this case, the appointment was approved even though there was no adjudication that the ward was mentally incompetent.  The court in Borck v. Borck, 906 So.2d 1209 (Fla. 4^th DCA, 2005) authorized the appointment of an emergency temporary guardian after finding that the ward was suffering from Alzheimer’s disease, was legally blind, and was hearing impaired.  In addition, the petitioner made allegations that the ward was being abused by the respondent and that this abuse was interfering with the nursing staff’s ability to properly care for the ward.

It is always difficult to see a loved-one who is physically or mentally suffering; and it is even worse to see others trying to take advantage of that illness for their own personal or financial gain.  Depending on the specific circumstances, the appointment of an emergency temporary guardian can be a very useful tool to help prevent such a misappropriation of a love-one’s assets and/or protect the ward’s physical health and well-being.

How can a minor child inherit from an estate? 

In Florida probate,  money and property is often left  to minors.  These gifts to minor can be through  a will or trust, or a child can take through intestacy (where there is no will).  However, Florida probate laws often requires that a guardian ad litem be appointed to represent the minor child’s financial interest. 

While Florida has laws for guardians of persons and property, oftentimes a minor only needs to have a Guardian Ad Litem appointed.  For all civil matters generally, a court must “appoint a guardian ad litem for an infant or incompetent person not otherwise represented in an action or…make such other order as it deems proper for the protection of the infant or incompetent person.”  Fla. R. Civ. P. 1.210(b).  Recently my office represented a client is a trust termination case which came from an undue influence contest.  Through mediation the matter was able to be resolved by all of the parties, however, the trust was to provide to the minor’s mother, the minor child and final beneficiaries.  Through actuarial tables we were able to determine the percentages due to the minor, her mother, and the ultimate residual beneficiary. 

Despite all the parties to the underlying action agreeing upon the settlement amounts calculated, Courts are very sensitive to the rights of minors.  To ensure transparency, compliance with the Florida probate laws, and justice, I petitioned the Court to appoint a Guardian Ad Litem to review and recommend the most advantageous receipt of the funds for the minor even though the minor is living with her mother and father.  The purpose of a guardian ad litem is to investigate and protect the rights of the person he or she is appointed to represent.  In my recent case, the court appointed guardian met with the minor and her mother and father to hear about their hopes, goals and plans.  He further met with them and a financial planner in his investigation.  Upon completion of his investigation, he issued a report to the Court where he advised the settlement amount was fair to the minor, as well as a plan as to how the assets were going to be held for the benefit of the minor. 

 The failure to appoint a guardian ad litem generally means the proceedings are voidable as to the minor’s interests.  This means that, if an ad litem had not been appointed and issued a report, the minor could come back and potentially challenge the settlement of the Florida probate litigation we were able to conclude at mediation.

CAN A PERSONAL REPRESENTATIVE OF AN ESTATE BE REMOVED?

Pursuant to Florida Statute 733.302, any person who is over the age of 18 years old, and is a resident of Florida at the time of death of the person whose estate is to be administered is qualified to act as personal representative in Florida.

You may receive a copy of the Notice of Administration of an estate, which will indicate who is the acting Personal Representative of that estate.  Pursuant to Florida Statue 733.212, a copy of the notice of administration should be served on the following persons who are known to the personal representative:  the decedent’s surviving spouse, beneficiaries, the trustee of any trust and each qualified beneficiary of the trust, persons who may be entitled to exempt property, and interested persons.  Florida Statute 731.201(23) defines an interested person as “any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved.  Under Florida Statute 731.201(2), a beneficiary means an heir at law in an intestate estate (estate without a Will) and devisee in a testate estate (estate with a Will).

In the event you receive a Notice of Administration, and believe that the person who was named as Personal Representative is not qualified to hold that position, it is possible to have a personal representative removed and a successor personal representative appointed. 

Florida Statute 733.504 states that a personal representative may be removed and letters revoked for any of the following causes, and the removal shall be in addition to any penalties prescribed by law:

(1) Adjudication that the personal representative is incapacitated.

(2) Physical or mental incapacity rendering the personal representative incapable of the discharge of his or her duties.

(3) Failure to comply with any order of the court, unless the order has been superseded on appeal.

(4) Failure to account for the sale of property or to produce and exhibit the assets of the estate when so required.

(5) Wasting or maladministration of the estate.

(6) Failure to give bond or security for any purpose.

(7) Conviction of a felony.

(8) Insolvency of, or the appointment of a receiver or liquidator for, any corporate personal representative.

(9) Holding or acquiring conflicting or adverse interests against the estate that will or may interfere with the administration of the estate as a whole. This cause of removal shall not apply to the surviving spouse because of the exercise of the right to the elective share, family allowance, or exemptions, as provided elsewhere in this code.

(10) Revocation of the probate of the decedent’s will that authorized or designated the appointment of the personal representative.

(11) Removal of domicile from Florida, if domicile was a requirement of initial appointment.

(12) The personal representative would not now be entitled to appointment.

Also, it is important to note that pursuant to Florida Statute 733.303, a person is not qualified to act as a personal representative if the person:

(a)  Has been convicted of a felony;

(b)  Is mentally or physically unable to perform the duties; and

(c)  Is under the age of 18 years.

The personal representative has specific fiduciary duties and obligations to the beneficiaries of an estate.  If a beneficiary believes that there has been mismanagement, self-dealing, divided loyalties, conflict of interest, or a breach of fiduciary duty by the personal representative of an estate, it is imperative that the beneficiary retain skilled and competent counsel to discuss their rights as the beneficiary of an estate to ensure that the beneficiary receives the appropriate distributions and to ensure that the personal representative is performing all of their fiduciary duties according to the Florida Statutes.  If the personal representative has breached their fiduciary duties, then competent counsel could have the personal representative removed, and request that the Court appoint a successor personal representative.

Adoption:  Inheriting From Both Sets of Parents.  Can You Really Have It Both Ways?

Every year, thousands of orphaned children are adopted by foster families nation-wide.  Most of them lead normal lives with their adoptive families, not giving much thought about their natural parents.  After all, in most cases, the adoptive family is the only family they ever knew. 

Now, for just a moment imagine that you are one of those children.  You live in Oregon where you were born (out of wedlock), adopted and raised; and you just discovered the shocking reality that your natural father never knew of your existence because your natural mother withheld the news of your birth from him resulting in your adoption without his consent.  Suddenly, the pre-conceptions you had about your real father (that he abandoned you) have vanished and are now replaced with questions about what would have been.  Then, you set out on a search for your natural father and found that he is living in Florida.  You make contact with him and he is overwhelmed with joy over meeting you, so much so that he regularly travels between Florida and Oregon to visit you.  The two of you establish a father-daughter relationship over the next twenty years when your natural father dies suddenly, leaving no last will and testament.  Naturally, the question begs at you, “Can I inherit from him, even though I was adopted?” 

Historically, if a child was illegitimate, most jurisdictions in the United States required only the consent of the child’s natural mother to the adoption of the child.  The right to grant or withhold such consent was not extended to the fathers of illegitimate offspring, since they were not considered to have sufficient interest in the benefits and obligations of raising a child to determine whether the child should be released for adoption.

In 1979, this trend was reversed in Caban v. Mohammed, 441 U.S. 380, 99 S. Ct. 1760, 60 L. Ed. 2d 297 (1979).  The key issue was whether the consent of an unwed biological father need be obtained before an adoption could be finalized.  In Caban, a mother of illegitimate children and her husband filed a petition for adoption.  The children’s natural father filed a cross-petition to adopt.  The New York Surrogate’s Court granted the mother’s petition, and the natural father appealed.  The decision was affirmed by the Supreme Court, Appellate Division, and subsequently affirmed by the New York Court of Appeals.  On appeal, the United States Supreme Court ruled that a law depriving all unwed fathers of the right to decide against adoption, whether or not they actually took care of the children in question, was unconstitutional and a form of Sex Discrimination. 

Consistent with the Caban case, the State of Florida now requires the consent of all unwed fathers of minor children prior to the termination of parental rights pending adoption, unless the father does not acknowledge paternity or participate in the rearing of the child.  Fla. Stat. § 63.062(1)(b)(5) (2008); La Follette v. Van Weelden, 309 So. 2d 197 (Fla. 1^st DCA 1975).  The effect of the subsequent adoption is that, for the purpose of intestate succession, the adopted child is no longer a descendant of his or her natural parents.  Fla. Stat. § 732.108(1) (2008). 

 At least until recently, Florida courts were required to give full faith and credit to foreign adoptions, unless the decree from the other state was repugnant to the laws or policies of this State.  Mott v. First Nat’l Bank of St. Petersburg, 124 So. 36, 37 (Fla. 1929); Kupec v. Cooper, 593 So. 2d 1176, 1178 (Fla. 5^th DCA 1992); Tsilidis v. Pedakis, 132 So. 2d 9, 11-12 (Fla. 1^st DCA 1961).

Getting back to our hypothetical, arguably your biological mother procured your adoption fraudulently by withholding certain crucial information from your natural father (i.e., your birth).  Therefore, in theory, your real father was prevented from acknowledging paternity, participating in your rearing, and/or objecting to your adoption because of your mother’s fraudulent actions.  If so, the Florida probate court need not recognize your Oregon adoption and could theoretically allow you to inherit from your biological father. 

Things got muddier, however, in May of 2009 when the Second District Court of Appeal decided the case of Embry v. Ryan, 11 So. 3d 408 (Fla. 2d DCA 2009).  The Court held, for apparent public policy reasons, that Florida Courts should recognize all foreign adoptions without regard to whether the adoption was procured in a manner that was contrary to Florida law.  Apparently, the Court felt that the State has a compelling interest to preserve the family unit, and was concerned that to rule otherwise would open the floodgates for adopted children to begin attacking the validity of their adoptions. 

To date, no other Florida Court has ruled on the issue of whether adoptions procured by fraudulently preventing unwed natural fathers from asserting their parental rights should be recognized in this State, so the law remains unsettled in that area.  But, there certainly appears to be a mechanism by which one can have their cake and eat it too. 

To be continued…   (maybe).

Power of Attorney Abuse is on the Rise.

A power of attorney is a document that transfers legal authority to another person. The person granting the power of attorney is called a principal who gives another, known as the attorney-in-fact, the written legal authority to make decisions on a specific, narrow or broad range of topics.

The potential for wrong doing exists in the power of attorney relationship through fraud, theft, improper transfers, self-dealing, improper gifting and retitled accounts and beneficiaries. Power of attorney holders can change beneficiary designations and account titles so the heirs are left with little to no inheritance. A power of attorney can also be abused when dealing with life insurance, annuities, bank accounts, joint accounts or pay on death accounts. 

Typically, an attorney-in-fact has full authority to perform, without prior court approval, every act authorized and specifically enumerated in the power of attorney. An attorney-in-fact, however, may not amend or modify any document or other disposition effective at the principal’s death unless expressly authorized by the power of attorney to do so.  Therefore, an attorney-in-fact may not change the named beneficiary on an insurance policy unless expressly authorized to do so by the power of attorney.  The law provides that construction of a durable power of attorney is a matter of law. In construing a power of attorney, the court must look at the language of the instrument in order to ascertain its object and purpose. Powers of attorney are strictly construed and only the principal’s intent is considered when construing the power of attorney, not the agent’s intent.

Because many powers of attorney are so broad in scope, challenging the actions taken through the power of attorney may be frustrating when the face of the document seemingly allows almost any conduct including self-dealing and making gifts to themselves.  Thus, focus of challenging the creation of a power of attorney should be based on lack of capacity, undue influence or improper signing formalities. If a power of attorney has been abused by the agent, a basis may exist to sue the agent for the return of money, property assets or for possible monetary damages.