Articles Posted in Trust & Probate Litigation

What happens when a person writes a new will, revokes his or her previous valid will, and the probate court later determines that the new will is invalid?  Usually, the person will be considered to have died intestate, i.e., without a will, and his or her property will be distributed according to the Florida intestate succession statutes.  However, there is a way to “revive” the revoked valid will.  The doctrine of dependent relative revocation (“DRR”) allows a revoked will to be revived when revocation of that will was conditioned upon the validity of the new will.

The DRR doctrine creates a presumption that the decedent would have preferred to revive his earlier will rather than die without a will and let his or her property pass through Florida’s intestate succession statutes.  Essentially, the DRR doctrine is based on two presumptions: (1) the decedent did not intend to die without a will, and (2) the decedent revoked his or her previous will on the condition that the new will is valid.  Courts are more likely to apply these presumptions when the provisions of the revoked valid will and the new invalid will are similar.

In Stewart v. Johnson, 142 Fla. 425, 428 (Fla. 1940), the Florida Supreme Court applied DRR to revive a revoked will.  Lott Johnson had his attorney draft a will in 1937.  One year later, Mr. Johnson revoked his will and made a new one, but he did not have his attorney draft it.  Instead, Mr. Johnson dictated the provisions of his new will to his secretary who then signed the new will as the sole witness.  Both wills made substantial bequests to a woman who lived with Mr. Johnson.  Because Florida law requires that two witnesses sign a will, Mr. Johnsons’ new will was invalid.  The Court found that Mr. Johnson’s revocation of his previous will was conditioned on the validity of the new will.  Applying the DRR doctrine, the Court revived the revoked will.

Florida law allows a decedent to forgive certain debt upon his or her death.  For example, a holder of a promissory note who wishes to forgive the outstanding debt that has not been paid upon his or her death may do so through his will.  Problems arise, however, when the estate is insolvent.

In Lauritsen v. Wallace, 67 So. 3d 285 (Fla. 5th DCA 2011), William Wallace issued a promissory note to his son.  Eleven days before his death, Mr. Wallace signed a will clearly and unambiguously forgiving his son’s debt.  Upon his death, Mr. Wallace’s estate had significant debt and insufficient assets to pay off that debt.  The court found that because Mr. Wallace’s estate was insolvent, he could not forgive his son’s debt.

To understand this outcome, one must first understand a few concepts of Florida law.  First, a promissory note is an asset of the holder.  Thus, when a decedent holds a promissory note that has not been paid, that promissory note will be considered an asset in the decedent’s estate.  Second, when a decedent attempts to forgive a debt in his will, that forgiveness is considered a bequest.  Finally, the estate’s assets must be used to pay the estate’s costs and other expenses before the assets are devised to beneficiaries according to the decedent’s will.

A spendthrift trust protects the trust assets against most creditors.  To be valid under Florida law, a spendthrift trust must restrain both voluntary and involuntary transfers of the beneficiary’s interest.  In other words, one cannot validly set up a trust to keep creditors out while simultaneously allowing the beneficiary to freely transfer his interest in the trust.  However, once the trustee makes a payment to the beneficiary of a spendthrift trust, creditors could make a claim on that payment.

Discretionary trusts give the trustee discretion in making payments to the beneficiary.  Under Florida law, a discretionary trustee who refuses to make payments to the beneficiary generally cannot be forced to make those payments by a creditor.  Therefore, when a trust includes a spendthrift clause and a discretionary clause, creditors may be lawfully excluded from ever reaching the trust assets.  However, spendthrift and/or discretionary trust are susceptible to some creditors’ claims, e.g., alimony or child support.

Miller v. Kresser, 34 So. 3d 172 (Fla. 4th DCA 2010), is an example of the protection that Florida law offers to spendthrift trusts.  Elizabeth Miller established a trust naming her son, James Miller, as the beneficiary and naming her other son, Jerry Miller, as trustee.  The trust included a valid spendthrift clause and gave Jerry, as trustee, full discretion to make payments to James.  In 2007, a creditor obtained judgment against James for $1,019,095.82.  The creditor then sought to recover on his judgment from James’ trust.

In interpreting a will, Florida law holds that the intention of the testator is the controlling factor in the analysis.  However, Florida law also provides that the testator’s intention should be gleaned from the four corners of the will.  Aldrich v. Basile, 2014 Fla. LEXIS 1027, at *12 (Fla. Mar. 27, 2014) (“The testator’s intention as expressed in the will controls, not that which she may have had in her mind”).  If the will is not valid under Florida law, Florida courts generally will not consider it.

Ann Aldrich wrote her will on an EZ Legal Form that she bought online.  She listed all her possession on the will and handwrote instructions directing that all of her “possessions listed” should go to her sister.  Ms. Aldrich further wrote that if her sister dies before her, “all listed” possessions should go to her brother.  Having listed all her possession on the will and devising them as she wished, Ms. Aldrich signed the will and had two witnesses sign the will in accordance with Florida law.  Had her story ended here, Ms. Aldrich’s intent would have been properly reflected on a valid will.

Three years after Ms. Aldrich wrote her will on the EZ Legal Form, her sister died leaving about $122,000 in cash to Ms. Aldrich as well as land.  Following her sister’s passing, Ms. Aldrich handwrote an additional document.  The handwritten document stated as follows: “This is an addendum to my will .… Since my sister … has passed away, I reiterate that all my worldly possessions pass to my brother.”  Aldrich, 2014 Fla. LEXIS 1027, at *6.  Ms. Aldrich signed the handwritten document and her daughter signed it as the sole witness.  Shortly thereafter, Ms. Aldrich passed away.  Ms. Aldrich’s handwritten document shows that her intent in drafting her will was to pass all her worldly possession to her brother if her sister died before her.  The Florida Supreme Court, however, held that the cash and land that Ms. Aldrich inherited after drafting her will was not disposed of by her will and must pass by intestacy.

Under Florida law, if a person wishes to contest the validity of a legal instrument, i.e., a will or trust, he or she cannot simultaneously benefit from that instrument.  The “renunciation rule” requires that an individual challenging the validity of a legal instrument return the payments or benefits that he or she received under that instrument.  The renunciation, however, is qualified, not absolute.  In other words, the party challenging the validity of the legal instrument would be entitled to those payments he or she received should the challenge be unsuccessful and the legal instrument declared valid.  The bottom line is that a person cannot unfairly hold inconsistent positions regarding a legal instrument, i.e., a person cannot accept and keep payments from a will or trust while simultaneously challenging the validity of that will or trust.  Like all rules, however, there are exceptions.  One such exception was recently articulated by a Florida district court in Fintak v. Fintak, 120 So. 3d 177 (Fla. 2d DCA 2013).

Edmund Fintak created a trust for his own benefit that was entirely funded by his own assets (a “self-settled” trust).  The self-settled trust was created to provide regular payment to Mr. Fintak for his health, education, and support.  In addition to the regular payments, the self-settled trust included a provision requiring payment from the trust upon Mr. Fintak’s written demand.  The self-settled trust also provided that upon Mr. Fintak’s death, the trust assets were to be divided into equal parts and distributed to his six children.  Two of Mr. Fintak’s children served as co-trustees.

After executing the trust, Mr. Fintak accepted and kept several payments from the self-settled trust.  However, when the co-trustees refused to pay Mr. Fintak the $30,000 that he demanded, Mr. Fintak filed a complaint challenging the validity of the trust.  The co-trustees argued that under the renunciation rule, Mr. Fintak could not challenge the validity of the trust because he accepted and kept trust payments.  The court disagreed.

Before drafting a will, the testator, i.e., the person who owns the assets that will be distributed after his or her death, must fully understand any restriction placed on the alienation of his or her assets.  A testator might erroneously believe he or she has the power to devise an asset as he or she wishes and be left with an unenforceable bequest.  Such was the case of Sally Christiansen.

In Cessac v. Stevens, No. 1D12-5834, 2013 Fla. App. LEXIS 18525 (Fla. 1st DCA November 20, 2013), the decedent, Ms. Christiansen, devised the remainder of her estate to Joanne Cessac.  Through her will, Ms. Christiansen essentially disinherited her two children.  When she died, Ms. Christiansen was the beneficiary of three trusts all of which were created by her father.  Normally, the assets in those trusts would be devised to whomever Ms. Christiansen wished in compliance with her will.  In this case, Ms. Christiansen intended that the assets in those trusts be devised to Ms. Cessac.  The district court, however, found that the assets in those trusts must be distributed to Ms. Christiansen’s children, not to Ms. Cessac.

A person creating a trust may place restrictions on the disposition of the trust’s property.  Ms. Christiansen’s father included the following restriction on the trusts:

The right to testamentary disposition of property is a right protected by the Florida Constitution.  To be valid under Florida law, a will must satisfy certain formalities: the will must be (1) in writing, (2) signed by the testator at the end of the will (or at the direction and presence of the testator), and (3) signed by two attesting witnesses in the presence of the testator and in the presence of each other.  However, Florida law will generally recognize a foreign will as valid if the will is valid under the laws of the state or country where the will was executed even if it does not strictly conform to the Florida formalities.  One major exception of this general rule is in the case of holographic wills.

A holographic will is a will that is hand-written by the testator and is not signed by witnesses.  Some states recognize holographic wills as valid under certain conditions particular to each state.  For example, Colorado will recognize a holographic will as valid if the signature and material portions of the document are in the testator’s handwriting.  Whereas, North Carolina will only recognize a holographic will as valid if the entire will is hand-written by the testator.

However, Florida law will not admit a holographic will into probate if it does not satisfy the required formalities under Florida law even if such will is valid in the state in which it was executed.  Florida law requires two witnesses to a will to assure the will’s authenticity and avoid fraud.  Under Florida law, holographic wills are not as reliable as wills that are executed in the presence of two witnesses.