The Florida Probate Blog

Trustee Compensation

2012-01-27T13:43:00.000-08:00

By: David M. Garten, Esq.

ARTICLE: Trustee Compensation

Sec. 736.0708, Fla. Stat. reads:

736.0708 Compensation of trustee.

(1) If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to compensation that is reasonable under the circumstances.

(2) If the terms of a trust specify the trustee's compensation, the trustee is entitled to be compensated as specified, but the court may allow more or less compensation if:

(a) The duties of the trustee are substantially different from those contemplated when the trust was created; or

(b) The compensation specified by the terms of the trust would be unreasonably low or high.

(3) If the trustee has rendered other services in connection with the administration of the trust, the trustee shall also be allowed reasonable compensation for the other services rendered in addition to reasonable compensation as trustee. In general, a trustee's compensation depends upon the extent and character of the
duties and responsibilities involved during the administration of the trust and must be reasonable in relation to the circumstances and the services actually rendered. See Osius v. Miami Beach First Nat.

Bank, 74 So. 2d 779 (Fla.1954) (Trustees are entitled to a reasonable compensation "for their services, and the care and responsibility incident to their position.").

The following factors should be considered in establishing/opposing the reasonableness of a trustee’s compensation:

●The amount of capital and income received and disbursed by the trustee;

●The wages or salary customarily granted to agents or servants for performing like work in the community;

●The success or failure of the administration of the trustee;

●Any unusual skill or experience which the trustee in question may have brought to his work;

●The fidelity or disloyalty displayed by the trustee;

●The amount of risk and responsibility assumed;

●The time consumed in carrying out the trust;

●The custom in the community as to allowances to trustees by settlors or courts and as to charges exacted by trust companies and banks;

●The character of the work done in the course of administration, whether routine or involving skill and judgment;

●Any estimate which the trustee has given of the value of his own services; and

●Payments made by the cestuis to the trustee and intended to be applied toward his compensation."

West Coast Hospital Association v. The Florida National Bank of Jacksonville, 100 So. 2d 807

(Fla. 1958). The weight to be given to any one factor and what is reasonable compensation rests

in the discretion of the court in its consideration of the facts and circumstances of each trust and

the performance of the trustee.

2012-01-20T11:00:00.000-08:00

By: David M.Garten, Esq.

ARTICLE: Deposing An Incapacitated Person

As a prerequisite to deposing an incapacitated person (or an alleged incapacitated

person), it may be necessary to: (a) have a hearing to determine whether the witness is

disqualified from testifying, and/or (b) submit written deposition questions to the witness.

A witness is presumed competent to testify until the contrary is established. See §90.601,

Fla. Stat. (every person is competent to be a witness, except as otherwise provided by

statute);Rutherford v. Moore, 774 So. 2d 637 (Fla. 2000); Hawk v. State, 718 So. 2d 159

(Fla. 1998). Even a person who has been declared insane can be found competent to

testify. SeeBelcher v. Johnson, 834 So. 2d 422 (2nd DCA 2003), citing Fla. Power &

Light Co. v.Robinson, 68 So. 2d 406 (Fla. 1953). The witness’s unreliability goes to his

credibility, which is for the trier-of-fact to consider. See Terry v. State, 668 So. 2d 954,

footnote 9 (Fla. 1996), citing Weygant v. Fort Meyers Lincoln Mercury, Inc., 640 So. 2d

1092 (Fla. 1994).

A witness is incompetent to testify if the Court determines the witness is (1) unable to

communicate to the Court; (2) unable to understand the duty to tell the truth; or (3)

unable to perceive and remember the events. See Rutherford, Supra; citing §§ 90.603,

.604, Fla. Stat. Competency to testify is established when a witness has sufficient

understanding to comprehend the obligations of the oath and is capable of giving a

correct account of the matters which the witness has seen or heard relative to the question

at issue. See Kaelin v. State, 410 So. 2d 1355 (Fla. 4th DCA 1982).

In Belcher v. Johnson , 834 So. 2d 422 (Fla. 2nd DCA 2003), the Belchers sought to take

the deposition of Ms. Roberts, who is an elderly woman suffering from dementia. Her

guardian filed a motion for protective order seeking to prevent the deposition because

Ms. Roberts was, to some degree, legally incapacitated. The trial court granted the

protective order without an evidentiary hearing and without making a factual

determination that Ms. Roberts should be disqualified to testify as a witness under

§90.603, F.S. Apparently, the trial court assumed that Ms. Roberts' incapacity for

purposes of a guardianship proceeding rendered her disqualified to testify as a matter of

law. The court quashed the protective order and remanded to the trial court to conduct a

hearing to determine whether Ms. Roberts should be disqualified from testifying pursuant

to section 90.603. The court reasoned that even a person who has been declared insane

can be found competent to testify.

In Urbanekv. Hopkins, 993 So. 2d 1110 (Fla. 4^th DCA 2008), a beneficiary of certain

irrevocable living trusts sued the trustee for breach of fiduciary duty for failing to make

distributions. In turn, the trustee counter-sued asserting that the beneficiary had induced

the grantor to exert undue influence on the trustee to make improper distributions. The

grantor was the father of the beneficiary and was not a party to the case. No claims were

made by or against the grantor. The trustee sought to take the grantor's oral deposition.

The grantor’s attorney objected to the deposition because the grantor was 88 years old

and suffering from Parkinson's disease. The attorney furnished the trial court with a

detailed affidavit from a physician who had specific knowledge about the grantor's

condition and filed a motion to limit the deposition to written questions. In response, the

trial court ordered the grantor and his physician to appear in court for a hearing on the

grantor's medical condition. In spite of the affidavit establishing danger to the grantor's

health from being forced to appear for a deposition, the judge nevertheless insisted that

he come to court to testify and rejected the alternative of first permitting only a written

deposition. The grantor did not personally come to court and appeared at the hearing

through counsel. The trial judge ordered the grantor to submit to a compulsory medical

examination (CME) by a physician chosen by the trustee within the next 30 days.

The appellate court quashed the order requiring a CME. The court found that the trustee

failed to establish good cause for a CME and that initially, any deposition had to be

limited to written deposition questions. The court reasoned:

As to the compulsory medical examination (CME) of the grantor-father,

the trial judge overlooked the burden placed by Florida Rule of Civil

Procedure 1.360 on the proponent of a CME. Under the rule, the party

seeking a CME must show that the person to be examined is a party in the

litigation who has himself placed his physical condition at issue. The party

seeking the CME must establish good cause for such an exam. Here the

trial judge should have first required written deposition questions of the

grantor-father. Before the trustee could thereafter show good cause for a

CME, he would thereupon have to show why the results of the written

deposition failed to furnish the relevant information sought from the

grantor-father.

In Gordon v.Davis, 267 So. 2d 874 (Fla. 3^rd DCA 1972), plaintiff filed a slander action

against defendant, which alleged that defendant called plaintiff psychotic. Defendant

alleged the truth of the statement and want of malice as an affirmative defense. The trial

court entered an order that plaintiff submit to a mental examination. Plaintiff contended

entry of the order for examination was error because Fla. R. Civ. P. 1.360 was limited in

scope to negligence cases, that the mental condition of plaintiff was not a matter in

controversy in this case, and that good cause for the order was not shown. On appeal, the

court found that Fla. R. Civ. P. 1.360 was not limited to personal injury actions. Plaintiff's

mental condition was placed in controversy because the alleged slander was based on

statements regarding plaintiff's mental condition. The court reasoned in part:

Under Rule 1.360 FRCP, in an action in which the mental or physical

condition of a party is in controversy, examination of the party with

respect thereto may be ordered, when good cause is shown therefor,

without regard to the form or type of the civil action in which it is

involved. In permitting such compulsory examination the rule does

not affect "substantive rights" of the litigants, since it relates exclusively

to the obtaining of evidence, and is therefore procedural.

Designation Of A Health Care Surrogate For A Minor

2012-01-13T11:00:00.000-08:00

By: David M. Garten, Esq.

Article: Designation Of A Health Care Surrogate For A Minor

The following proposed statute is expected to pass during the next legislative session and

become law before this summer. This statute will give a parent or other legal guardian the

authority to designate a surrogate to give medical consent for a minor in the parent or the legal

custodian’s absence. For example, a caretaker being designated as a surrogate for emergency

medical treatment while the parents are on vacation and cannot be timely contacted. The

proposed statute reads as follows:

765.2035. Designation of a health care surrogate for a minor

(1) A natural guardian as defined in s. 744.301 (1), legal custodian or legal guardian of the

person of a minor may designate a competent adult to serve as a surrogate to make health care

decisions for the minor. Such designation shall be made by a written document which shall be

signed by the designator in the presence of two subscribing adult witnesses. If a designator is

unable to sign the instrument, such designator may, in the presence of witnesses, direct that

another person sign the designator’s name as required herein. An exact copy of the instrument

shall be provided to the surrogate.

(2) The person designated as surrogate shall not act as witness to the execution of the document

designating the health care surrogate.

(3) A document designating a health care surrogate may also designate an alternate surrogate

provided the designation is explicit. The alternate surrogate may assume his or her duties as

surrogate if the original surrogate is not willing, able, or reasonably available to perform his or

her duties. The designator's failure to designate an alternate surrogate shall not invalidate the

designation.

(4) If neither the designated surrogate nor the designated alternate surrogate is willing, able, or

reasonably available to make health care decisions for the minor on behalf of the designator and

in accordance with the designator’s instructions, the health care facility may seek the

appointment of a proxy pursuant to part IV.

(5) A natural guardian as defined in s. 744.301 (1), legal custodian or legal guardian of the

person of a minor may designate a separate surrogate consent to mental health treatment for a

minor. However, unless the document designating the health care surrogate expressly states

otherwise, the court shall assume that the health care surrogate authorized to make health care

decisions for a minor under this chapter is also the designator’s choice to make decisions

regarding mental health treatment for the minor.

(6) Unless the document states a time of termination, the designation shall remain in effect until revoked by the designator. An otherwise valid designation of a surrogate for a minor shall not be invalid solely because it was made before the birth of the minor.

(7) A written designation of a health care surrogate executed pursuant to this section establishes

a rebuttable presumption of clear and convincing evidence of the designator’s designation of the

surrogate and becomes effective pursuant to s. 743.0645(2)(a).

Attorney's Fees For Rendering Services To An Estate

2012-01-06T08:54:00.000-08:00

By: David M. Garten, Esq.

ARTICLE: Attorney's Fees For Rendering Services To An Estate

Sec. 733.106(3) provides: “Any attorney who has rendered services to an estate may be

awarded reasonable compensation from the estate.” This statute is not restricted to

services that bring about an enhancement in value or an increase in the assets of the

estate, but also includes services that are successful in effectuating the testamentary

intention set forth in the will, that prevent the appointment of a personal representative, or

that obtain the removal of a personal representative.

I. ATTORNEY’S FEES ALLOWED:

When is an attorney entitled to an award of attorney's fees pursuant to §733.106(3)?

ü In re Estate of Lewis, 442 So.2d 290 (Fla. 4th DCA 1983). In Lewis, a beneficiary

whose devise was being contested by the personal representative on the basis of undue

influence was entitled to an award of attorney’s fees when the personal representative

voluntarily dismissed his petition.

ü Duncombe v. Adderly, 2008 Fla. App. LEXIS 15405 (Fla. 4th DCA 10/8/08). A

beneficiary who prevents the appointment of a designated personal representative or that

obtains the removal of a personal representative is entitled to an award of attorney's fees.

ü Menz v. Estate of Menz, 381 So.2d 375 (Fla. 1st DCA 1980). In Menz, the surviving

spouse was entitled to her recover attorney’s fees necessitated by the personal

representative's failure to satisfy his duty to file a petition to determine the amount of the

elective share after a proper election had been made because the attorney's efforts on the

widow's behalf resulted in a change in the distribution under the will.

ü Johnson v. Burleson, 61 So.2d 170 (Fla. 1952). In Johnson, the surviving spouse was

entitled to recover her attorney’s fees where the legal services were necessary to require a

personal representative to carry out the provisions of a will and give the surviving spouse

the income as directed in the will.

ü In re Estate of Griffis, 366 So.2d 80 (Fla. 4th DCA 1978). In Griffis, a beneficiary

who successfully argued that decedent's destruction of two later codicils revived the

provisions of the first codicil was entitled to recover his attorney’s fees because the

ultimate will was determined and the estate was benefitted because the beneficiaries

whom the testator intended are the ones who receive their legacies and bequests

ü Baumer v. Howard, 542 So.2d 400 (Fla. 1st DCA 1989). In Baumer, a beneficiary was

entitled to recover attorney’s fees by establishing that the widow unlawfully and

intentionally killed the decedent because the interest of the decedent in the entireties

Co-Agents’ Duties And Liabilities Under A Durable Power Of Attorney

2012-01-02T14:11:00.000-08:00

By: David M. Garten, Esq.

ARTICLE: Co-Agents’ Duties And Liabilities Under A Durable Power Of Attorney

In Rosenkrantz v. Feit, 2011 Fla. App. LEXIS 19915 (Fla. 3^rd DCA 12/14/11), sister brought a declaratory judgment action against her brother/co-agent[1] under their mother's durable power of attorney. [2] Sister sought a declaration of her rights as a co-agent and an accounting. Sister alleged that she was unable to issue subpoenas to her mother's bank to obtain bank account information, but could not issue the subpoenas, or obtain this information, without her brother's concurrence which he refused to give. She alleged that her brother was not fulfilling his fiduciary role and refused fully to account for their mother's assets. Sister sought declaratory relief to determine: 1) the extent to which she could act without the
concurrence of a co-agent who could be acting in derogation of his fiduciary duty; and 2) whether she was entitled to an accounting from the co-agent.

HOLDING: The court held that if the allegations are proven as pled, sister acted properly and prudently in seeking to fulfill her fiduciary role. As a co-agent, sister had both the right and the duty to seek an accounting from her brother based upon her allegations of improper disbursements of their mother’s property.

REASONING: The court reasoned that co-agents under a durable power of attorney are liable "for failure either to participate in the administration of assets subject to the power or for failure to attempt to prevent a breach of fiduciary obligations thereunder." §709.08(9)(d), F.S. Under §709.08(9)(a), "concurrence of both is required on all acts in the exercise of power." Further, §709.08(8) provides that an agent is a fiduciary who must observe the standards of care applicable to trustees as described in s. 737.302. If the exercise of the power is improper, the agent is liable to interested persons as described in § 731.201 for damage or loss resulting from a breach of fiduciary duty by the agent to the same extent as the trustee of an express trust. Thus, those acting as co-agents must be guided by the same fiduciary principles applicable to co-trustees.

It goes without saying that co-trustees owe to each other, as well as to the beneficiaries of the trust, the duty and obligation to so conduct themselves as to foster a spirit of mutual trust, confidence, and cooperation to the extent possible. At the same time, the trustees should maintain an attitude of vigilant concern for the proper administration or protection of the trust business and affairs.

Although the court’s reasoning is based on §709.08, F.S. (2006), the court noted that the same reasoning applies to a durable power of attorney executed after the effective date of the new Florida Power of Attorney Act, i.e., 10/1/11. The new Act provides in part that:

- A principal may designate two or more persons to act as co-agents, and unless the power of attorney otherwise provides, each co-agent may exercise its authority independently. § 709.2111(1), Fla. Stat. (2011).

- If a power of attorney requires that two or more persons act together as co-agents, one or more of the agents may delegate to a co-agent the authority to conduct banking transactions pursuant to the power of attorney. § 709.2111(6).

- An agent may be required by a co-agent to disclose receipts, disbursements, or trans-actions conducted on behalf of the principal. § 709.2114(6).

- An agent (including a co-agent) may petition a court to construe or enforce a power of attorney, review the agent's conduct, terminate the agent's authority, remove the agent, and grant other appropriate relief. § 709.2116(1).

- An agent's exercise of power may be challenged in a proceeding brought on behalf of the principal on the grounds that the exercise of the power was affected by a conflict of interest. § 709.2116(4).

_________________________________

PRACTICE TIPS: Under the new Florida Power of Attorney Act, an agent who does not participate in or conceal a breach of fiduciary duty committed by another agent, including a predecessor agent, is not liable for the actions or omissions of the other agent. However, an agent who has actual knowledge of a breach or imminent breach of fiduciary duty by another agent, including a predecessor agent, must take any action reasonably appropriate in the circumstances to safeguard the principal’s best interests. Sec. 709.2111, F.S. reads:

709.2111 Co-agents and successor agents.—(1) A principal may designate two or more persons to act as co-agents. Unless the power of attorney otherwise provides, each co-agent may exercise its authority independently.

(2) A principal may designate one or more successor agents to act if an agent resigns, dies, becomes incapacitated, is not qualified to serve, or declines to serve. Unless the power of attorney otherwise provides, a successor agent:

(a) Has the same authority as that granted to the original agent; and

(b) May not act until the predecessor agents have resigned, have died, have become incapacitated, are no longer qualified to serve, or have declined to serve.

(3) Except as otherwise provided in the power of attorney and subsection (4), an agent who does not participate in or conceal a breach of fiduciary duty committed by another agent, including a predecessor agent, is not liable for the actions or omissions of the other agent.

(4) An agent who has actual knowledge of a breach or imminent breach of fiduciary duty by another agent, including a predecessor agent, must take any action reasonably appropriate in the circumstances to safeguard the principal’s best interests. If the agent in good faith believes that the principal is not incapacitated, giving notice to the principal is a sufficient action. An agent who fails to take action as required by this subsection is liable to the principal for the principal’s reasonably foreseeable damages that could have been avoided if the agent had taken such action.

(5) A successor agent does not have a duty to review the conduct or decisions of a predecessor agent. Except as provided in subsection (4), a successor agent does not have a duty to institute any proceeding against a predecessor agent, or to file any claim against a predecessor agent’s estate, for any of the predecessor agent’s actions or omissions as agent.

(6) If a power of attorney requires that two or more persons act together as co-agents, notwithstanding the requirement that they act together, one or more of the agents may delegate to a co-agent the authority to conduct banking transactions as provided in s. 709.2208(1), whether the authority to conduct banking transactions is specifically enumerated or incorporated by reference to that section in the power of attorney.

[1] The terms “co-agent” and “attorney in fact” are synonymous. See §709.2102(1), F.S. (2011).

[2] The durable power of attorney was executed prior to the effective date of the new Florida Power of Attorney Act, i.e., 10/1/11.

Proper Use Of Gifting Powers Under A Durable Power Of Attorney

2011-12-31T17:00:00.000-08:00

By: David M. Garten, Esq.

Proper Use Of Gifting Powers Under A Durable Power Of Attorney

Chapter 709 entitled “Powers Of Attorney And Similar Instruments” (effective October 1, 2011) reads in relevant part:

709.2202 Authority that requires separate signed enumeration.—

(1) Notwithstanding s. 709.2201, an agent may exercise the following authority only if the principal signed or initialed next to each specific enumeration of the authority, the exercise of the authority is consistent with the agent’s duties under s. 709.2114, and the exercise is not otherwise prohibited by another agreement or instrument:

* * * *

(2) Notwithstanding a grant of authority to do an act described in subsection (1), unless the power of attorney otherwise provides, an agent who is not an ancestor, spouse, or descendant of the principal may
not exercise authority to create in the agent, or in an individual to whom the agent owes a legal obligation of support, an interest in the principal’s property, whether by gift, right of survivorship, beneficiary designation, disclaimer, or otherwise.

(3) Unless the power of attorney otherwise provides, a provision in a power of attorney granting general authority with respect to gifts authorizes the agent to only:

(a) Make outright to, or for the benefit of, a person a gift of any of the principal’s property, including by the exercise of a presently exercisable general power of appointment held by the principal, in an amount per donee not to exceed the annual dollar limits of the federal gift tax exclusion under 26 U.S.C. s. 2503(b), as amended, without regard to whether the federal gift tax exclusion applies to the gift, or if the principal’s spouse agrees to consent to a split gift pursuant to 26 U.S.C. s. 2513, as amended, in an amount per donee not to exceed twice the annual federal gift tax exclusion limit; and

(b) Consent, pursuant to 26 U.S.C. s. 2513, as amended, to the splitting of a gift made by the principal’s spouse in an amount per donee not to exceed the aggregate annual gift tax exclusions for both spouses.

An agent may exercise the authority to make a gift only if the principal signed or initialed next to a specific enumeration giving the agent the authority to make a gift. Pursuant to subparagraphs (2) and (3) above, the principal may expand the gifting powers beyond those stated in the statute by signing or initialing next to a specific enumeration giving the agent those powers. For example, the principal may give an agent who is not an ancestor, spouse, or descendant unlimited gifting powers to make gifts to himself. However, use of the gifting powers beyond those referenced in (3)(a) and (b) could be problematic for the agent, especially if the gifts are made to himself.

For example, in Siegel v. JP Morgan Chase Bank, 2011 Fla. App. Lexis 16365 (Fla. 4th DCA October 19, 2011), the court found that the following principles apply in determining whether an agent under a Florida durable power of attorney breached his fiduciary duty by making gifts.

The relevant portion of the opinion reads:

While not directly on point, In re Francis, 19 Misc. 3d 536, 853 N.Y.S.2d 245 (N.Y. Sur. 2008), is an example of the misuse of a power to gift by an attorney-in-fact. There, a 98-year-old woman gave a power of attorney to her neighbor. The instrument included a broad power to make gifts, including gifts to the attorney-in-fact. The neighbor then used this power, transferring all of the woman's accounts and property to himself. After her death, when her heirs sued to set aside the transfers, the attorney-in-fact defended based upon the provision of the power of attorney absolving the attorney-in-fact of all liability to her estate or heirs for any act done under the power of attorney. The court rejected this claim. In doing so it noted:

Respondent's use of the POA is a classic example of how such an instrument may be abused by an attorney-in-fact for his personal benefit. At his deposition respondent admitted that he transferred to himself or his mother virtually all of decedent's liquid assets and secured a life tenancy in the real property.

19 Misc. 3d at 541. The court concluded that a clause which seeks to exonerate an attorney-in-fact from any and all liability runs afoul of the spirit of New York's public policy and the duty of an attorney-in-fact as established under Ferrara [Matter of Ferrara, 7 N.Y.3d 244, 819 N.Y.S.2d 215, 852 N.E.2d 138 (2006)]. Ferrara, in turn, held that an attorney-in-fact must act in the best interests of the principal, which is consistent with the fiduciary duties that the courts have imposed on the attorney-in-fact.

"[A] power of attorney ... is clearly given with the intent that the attorney-in-fact will utilize that power for the benefit of the principal" (Mantella v. Mantella, 268 A.D.2d 852, 852, [701 N.Y.S.2d 715] [3d Dept. 2000] [internal quotation marks and citation omitted]). Because "[t]he relationship of an attorney-in-fact to his principal is that of agent and principal ..., the attorney-in-fact must act in the

utmost good faith and undivided loyalty toward the principal, and must act in accordance with the highest principles of morality, fidelity, loyalty and fair dealing"

(Semmler v.Naples, 166 A.D.2d 751, 752, [563 N.Y.S.2d 116] [3d Dept.1990] [internal quotation marks and citations omitted]).

Ferrara, 7 N.Y.3d at 254; 852 N.E.2d at 144. Although the power of attorney in this case was a Florida durable power of attorney, Florida law states that an attorney-in-fact must exercise the powers onferred as a fiduciary. See, e.g., In re Estate of Schriver, 441 So. 2d 1105 (Fla. 5th DCA 1983); § 709.08(8), Fla. Stat. (2011). Therefore, the principles of the foregoing case are applicable as they also consider an attorney-in-fact a fiduciary.

Based on the above, it is reasonable to conclude that giving an agent unlimited gifting powers to make gifts to himself may be considered a conflict of interest, in which case the agent would have the burden of proving, by clear and convincing evidence that he acted: (a) Solely in the interest of the principal; or (b) In good faith in the principal’s best interest, and the conflict of interest was expressly authorized in the power of attorney. Refer to §709.2116(4), Fla. Stat.

RIGHTS THAT TERMINATE AT DEATH

2011-12-28T09:40:00.000-08:00

ARTICLE: RIGHTS THAT TERMINATE AT DEATH

The purpose of the article is to explore those rights that terminate at death, i.e., those rights that

are not enforceable either by or against the decedent’s estate.

PRIVACY RIGHTS: Privacy rights are personal and die with the individual. See Nester v.

Posner, 857 So. 2d 953 (Fla. 3^rd DCA 2003). In Nester, the decedent's employees signed

confidentiality agreements which barred the disclosure of any information regarding the

decedent’s private life, finances, state of mind, health, etc. One of the employees was a witness

to the decedent's will. When the decedent’s grandchildren sought information from the employee

concerning the decedent's testamentary capacity and possible undue influence, the PR sued the

grandchildren for tortious interference with the employee's confidentiality agreement. The

grandchildren moved to have the confidentiality agreements nullified so they can conduct

informal discovery interviews with the decedent’s employees. The appellate court, in affirming

the trial court’s order nullifying the agreement as to the decedent’s employee, reasoned that the

PR could not enforce the agreement against the employee because the decedent’s privilege did

not survive his death. Privacy rights are personal and die with the individual. Although the

agreement survives the employee's employment, there is no provision that requires

confidentiality after the decedent’s death.

CONTRACTS “PERSONAL” TO THE DECEDENT: A PR can properly refuse to perform

the decedent’s contract when the contract is “personal” to the decedent. A contract is “personal”

to the decedent when the contract contemplates only the personal performance of the decedent,

i.e., the PR could not perform as fully and as well as the decedent might have. See Bloom v. K &

K Pipe &Supply Co., 390 So. 2d 770 (Fla. 4th DCA 1980) and Gunderson v. Sch. Dist, 937 So. 2d 777 (Fla. 1st DCA 2006).

In Bloom, the decedent sold all of his stock of a corporation to another stockholder. In

connection with that transaction, the decedent entered into a contract pursuant to which he

agreed neither to compete with the corporation nor answer questions relating to the corporation's

business, in exchange for which, the decedent was to receive weekly payments for 10 years and

two months. The decedent died after about one year, and the corporation stopped making the

weekly payments provided for in the contract. The PR sued on the contract for the weekly

payments. The appellate court, in affirming the trial court’s dismissal of the complaint, reasoned

that the covenant required the decedent to "answer any questions and respond to any request for

information from K & K...." This covenant became impossible to enforce because of the

decedent’s death. Since the contract contemplated only the personal performance of the decedent

and prohibited only the decedent from performing certain actions, the purpose of the contract

was frustrated by the death of the decedent and therefore, became unenforceable by the PR.

In Frankelv. Bernstein, 334 So. 2d 37 (Fla. 3rd DCA 1976), the lessee entered into a lease of an

apartment owned by lessors for a term of two years, to commence on the day following the

termination date of her existing lease. The lessee died several months prior to the

commencement of the second lease. Lessors filed an action against lessee’s estate to enforce the renewal lease. The appellate court, in affirming the trial court’s dismissal of the cause of action

for accrued unpaid rent under the renewal lease, reasoned that under the terms of the lease it was

meant only to have been a personal obligation of the lessee, namely her personal residence, and

as such there was the implied condition that her death would have terminated the lease. But see

KensingtonAssocs. v. Moss, 426 So.2d 1076 (Fla. 4th DCA 1983)(A PR is liable under a lease if

the lease contains a clause binding the heirs, executors, and assigns of the decedent/lessee and/or

contained a clause allowing the decedent/lessee or his successors to assign the lease. Such

language diminishes the personal nature of the lease terms.).

In Gunderson v. Sch. Dist , 937 So. 2d 777 (Fla. 1st DCA 2006), the decedent and his employer

entered into a settlement of a workers' compensation claim before the decedent's passing. The

agreement required the decedent to execute a general release and a voluntary resignation and

stated that it was effective and binding upon the entry of an order approving a motion for

attorney's fees. The decedent failed to execute either a general release or sign a voluntary

resignation prior to his death. The widow, as PR, sought and received an order approving her

motion for attorney's fees and later executed a general release and voluntary resignation on her

husband's behalf. The appellate court, in reversing the trial court's order denying the PR’s request

to enforce the agreement, reasoned: “The main purpose of this settlement agreement was to bring

to a close all litigation regarding the claimant's workers' compensation claims in return for a

settlement payment. The duty of performance on the claimant's part was a duty which could

statutorily be performed by his representative in the event of his death through the effectuation of

the necessary documents. These were not duties which the claimant's death rendered impossible

to perform. More importantly, the death of a claimant following the execution of a settlement

agreement will not affect the agreement's enforcement if the personal representative can show

that a binding contract was reached.”

CONSTITUTIONAL RIGHTS: A person's constitutional rights terminate at death. If any

rights exist, they belong to the decedent's next of kin. See State v. Powell, 497 So. 2d 1188 (Fla.

1986)(parents’ action claiming damages for the alleged wrongful removal of their sons' corneas

and seeking a judgment declaring §732.9185, F.S. unconstitutional); Crocker v. Pleasant, 778 So.

2d 978 (Fla. 2001)(county’s alleged violation of due process rights for failing to notify parents of

their son's death).

ALIMONY: An obligation to pay alimony ceases upon the death of the obligor, unless that

person expressly agrees that the estate shall be bound to continue to pay alimony after his death.

See O'Malleyv. Pan Am Bank of Orlando, N.A., 384 So. 2d 1258 (Fla. 1980); Faile v. Fleming,

763 So. 2d 459 (Fla. 4^th DCA 2000). Compare Sobelman v. Sobelman, 541 So. 2d 1153 (Fla.

1989)(life insurance proceeds are not postmortem alimony. Upon the death of an insured, the

insurance company, not the insured's estate, pays the insurance proceeds to the beneficiary).

Who Is An Interested Person In Probate?

2011-12-26T09:20:00.000-08:00

By: David M. Garten, Esq.

ARTICLE: WHO IS AN “INTERESTED PERSON” IN PROBATE?

Have you ever represented a client in a probate dispute? If so, then chances are you had to
determine whether one or more parties to the dispute had standing. Only an “interested person”
has standing to pursue any available probate remedies. The purpose of this article is to provide
concrete examples of how case law and Florida Statutes define an “interested person” in probate
and testamentary trust proceedings. Whether this term applies to non-testamentary Trusts is
beyond the scope of this article.

I. STATUTORY DEFINITION OF AN “INTERESTED PERSON”:

Sec. 731.201(23), Fla. Stat. defines the term "interested person" as:

[A]ny person who may reasonably be expected to be affected by the outcome of

the particular proceeding involved. In any proceeding affecting the estate or the
rights of a beneficiary in the estate, the personal representative of the estate shall
be deemed to be an interested person. In any proceeding affecting the expenses of
the administration and obligations of a decedent's estate, or any claims described
in s.733.702(1), the trustee of a trust described in s.733.707(3) is an interested
person in the administration of the grantor's estate. The term does not include a
beneficiary who has received complete distribution. The meaning, as it relates to
particular persons, may vary from time to time and must be determined according
to the particular purpose of, and matter involved in, any proceedings.

II. PROBATE REMEDIES:
Only an “interested person” has standing. A recent case with an extensive discussion of standing
in probate courts is Hayes v. Guardianship of Thompson, 952 So. 2d 498 (Fla. 2006). Any
interested person may objection to the validity of a will, the qualifications of the personal
representative, venue or the jurisdiction of the court from which letters of administration were
issued. See §733.212(3), Fla. Stat. Additionally, an interested person may pursue any probate
remedy affecting the expenses of the administration and obligations of a decedent's estate. For
example, an interested person may object to the personal representative’s petition for discharge,
final accounting, compensation, payments to employees, and proof of claim. See Florida Probate
Rules 5.355 and 5.401(a) and §733.705(4), Fla. Stat.

III. WHO IS AN INTERESTED PERSON?

The following are examples of how the case law and Florida Statutes define an “interested
person” in probate and testamentary trust proceedings:

/ The personal representative of the estate is an interested person. Sec.731.201(23), Fla. Stat.

/ If a trustee is also a personal representative of the estate, the beneficiaries of the trust as
defined in §737.303(4)(b), Fla. Stat. are interested persons. Sec.731.201(23), Fla. Stat.

/ An assignee of an intestate heir steps into the shoes of the intestate heir and may appear as a
party of interest in a probate proceeding. Morse v. Clark, 890 So. 2d 496 (Fla. 5th DCA 2004).

/ A personal representative under an earlier will is an interested person with standing to contest
a later will. Engelberg v. Birnbaum, 580 So. 2d 828 (Fla. 4th DCA 1991). But see Onofrio v.
Johnston & Sasser, P.A., 782 So. 2d 1019 (Fla. 5th DCA 2001) (the personal representative
named in a will not yet admitted to probate, was not an interested person. The personal
representative came into existence only when she received letters testamentary).

/ Sec.731.201(23), Fla. Stat. does not require that the person be an heir or represent an heir but
only that the person "may reasonably be expected to be affected by the outcome of the particular
proceeding involved." Wheeler v. Powers, 972 So. 2d 285 (Fla. 5th DCA 2008).

/ An alternate personal representative under an earlier will was an interested person with
standing to contest the later will which was executed six weeks before she was involuntarily
hospitalized with late stage Alzheimer's disease. Wheeler v. Powers , 972 So. 2d 285 (Fla. 5
th DCA 2008). See also Engelberg v. Birnbaum , 580 So. 2d 828 (Fla. 4th DCA ) (a personal
representative in an earlier will has standing to contest a later will).

/ A personal representative has standing as an interested person to file a motion for appointment
of a trustee of a residuary trust for which she was not a trustee because that trust was created
under the decedent's will and the funding for that trust must come from a portion of the assets of
the estate. Barley v. Barcus, 877 So. 2d 42 (Fla. 5th DCA 2004).

/ A potential class 8 creditor who had filed an independent action is an interested person even
though the estate would have no assets to pay any judgment the claimant might obtain in the
future. Arzuman v. Estate of Prince Bander Bin Saud Bin, 879 So. 2d 675 (Fla. 4th DCA 2004).

/ The term “interested person”does not include a beneficiary who has received a complete
distribution. Until the beneficiary actually receives his devise, he "may reasonably be expected
to be affected by the outcome of the particular proceeding involved." To "receive" means that
the beneficiary has actually taken possession of the devise under the decedent's will. The fact that
the estate has sufficient funds to pay the devise in full is not the equivalent of receipt of the
devise by the beneficiary. Cason v. Hammock, 908 So. 2d 512 (Fla. 5th DCA 2005).

/ A contingent beneficiary/contingent remainder beneficiary under a testamentary trust is an
interested person. Richardson v. Richardson, 524 So. 2d 1126 (Fla. 5th DCA 1988); Barley v. Barcus, 877 So. 2d 42 (Fla. 5th DCA 2004); In re Estate of Watkins, 572 So. 2d 1014 (Fla. 4th DCA 1991).
IV. WHO IS NOT AN INTERESTED PERSON?

The following are examples of how the case law and Florida Statutes define who is not an
“interested person” in probate and testamentary trust proceedings:

/ A beneficiary who takes under the will lacks the necessary adverse interest to contest the will.
Sec.731.201(23), Fla. Stat.

/ A petitioner may not be an interested person to contest the validity of a will if previous wills
do not include the petitioner as a beneficiary of the estate. It is the burden of the petitioner
seeking to revoke the present will to establish that the previous will, which also excludes the
petitioner as a beneficiary, is invalid. Wehrheim v. Golden Pond Assisted Living Facility, 905
So. 2d 1002 (Fla. 5th DCA 2005); Newman v. Newman, 766 So. 2d 1091 (Fla. 5th DCA
2000)(A beneficiary who was bequeathed only a dollar is deemed to have been excluded under
the will).

/ A personal representative does not have standing to contest the will under which he has been
appointed and where he has qualified to serve. In such a case the personal representative
immediately disqualifies himself to continue to serve when the suit is filed contesting the will. In
re Estate of Lewis, 411 So. 2d 368 (Fla. 4th DCA 1982).

/ A former guardian for the decedent who submitted for probate the decedent’s second will did
not have standing to petition to revoke the decedent’s first will. The guardian is merely an
interloper because he did not have an interest in the outcome of the estate case. Suntrust Bank v.
Nichols, 701 So. 2d 107 (Fla. 5th DCA 1997)

/ A beneficiary of an estate does not have standing to pursue recovery of estate assets. Only the
personal representative (or a curator/ad litem) has standing to pursue recovery of estate assets.
Traub v. Zlatkiss, 559 So.2d 443 (Fla. 5th DCA 1990); Brake v. Murphy, 687 So.2d 842
(Fla. 3rd DCA 1996).

CAN A PERSONAL REPRESENTATIVE TAKE POSSESSION OF PROTECTED HOMESTEAD PROPERTY

2011-12-23T00:25:00.000-08:00

By: David M. Garten, Esq

CAN A PERSONAL REPRESENTATIVE TAKE POSSESSION OF PROTECTED
HOMESTEAD PROPERTY?

Effective January 1, 2002, if homestead property is not occupied by a person who appears to have an interest in the property, the personal representative is authorized, but not required, to take possession of that property for the limited purpose of preserving, insuring, and protecting it for the person having an interest in the property, pending a determination of its homestead status.

Refer to §733.608, Fla. Stat. and Florida Probate Rules 5.402 through 5.404.

If the personal representative expends funds or incurs obligations to preserve, maintain, insure, or protect the homestead, he is entitled to a lien on the homestead and its revenues to secure repayment of this debt.
In Herrilka v. Yates, 13 So. 3d 122 (Fla. 4th DCA 2009), the court found that it was improper for the curator to place a lien on the homestead because: (1) the homestead was occupied by a joint owner, and (2) the curator’s attorney's fees were not incurred for the specific purpose of preserving, maintaining, insuring, or protecting the homestead.

A notice of lien must be recorded in the public records, filed in the probate proceeding, and served on interested persons by formal notice. Additionally, the personal representative must file and serve a petition to determine the amount of the lien by formal notice and obtain a court order adjudicating the amount of the debt.

The personal representative may enforce the debt by: (1) foreclosing on the lien in the manner of foreclosing a mortgage under Chapter 702, or (2) offsetting some portion of the debt against probate property that would be distributable to a person having an interest in the homestead, or (3) offsetting the debt against revenues from the homestead. The personal representative does not have the authority to sell the homestead. See Harrell v. Snyder, 913 So.2d 749 (Fla. 5th DCA 2005).

The lien shall terminate upon the earliest of: (a) recording a satisfaction or release signed by the personal representative in the official records of the county where the property is located; (b) the discharge of the personal representative when the estate administration is complete; (c) one year from the recording of the lien in the official records unless a proceeding to determine the debt or enforce the lien has been filed; or (d) the entry of an order releasing the lien.

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Do I have to File A Claim

2011-12-20T16:15:00.000-08:00

By: David M. Garten, Esq.

ARTICLE: DO I HAVE TO FILE A CLAIM?

The purpose of this article is to provide concrete examples of when it is necessary to file a claim

against an estate, and to clarify the “trust” exception to the claims statute.

I. "CLAIM" DEFINED:

Sec. 733.702, Fla. Stat. defines a "claim" as a demand against the decedent's estate that arose before

the death of the decedent, even if the claims are unmatured, contingent, or unliquidated. Therefore,

if the demand or expense was incurred by your client post-death, it may not be necessary to file a

claim.

II. WHEN IS IT NECESSARY TO FILE A CLAIM:

It is necessary to file a claim against an estate for the following:

Funeral or burial expenses [§733.702(1)];

Claimant’s personal property in the possession of the personal representative

[§733.702(1)];

Damages against the decedent, including, but not limited to, an action founded on fraud or

another wrongful act or omission, whether or not an action is pending at the time of death

[§733.702(1)]. Examples:

(a) a claim for contribution against the decedent joint tortfeaser’s

estate even though the injured party filed suit after the claim’s period expired [Koschmeder v.

Griffin, 386 So. 2d 625 (Fla. 4th DCA 1980)]; and (b) a claim for contribution from the

decedent’s estate on a jointly signed promissory note prior to a judgment on the note

[Simpson v. First Nat'l Bank & Trust Co., 318 So. 2d 209 (Fla. 4th DCA 1975)];

A claim against the decedent for intentional interference with an expectancy [Carlton v.

Carlton, 575 So. 2d 239 (Fla. 2d DCA 1991)];

TA contingent claim. A contingent claim is "one where the liability depends on some future

event, which may or may not happen, which renders it uncertain whether there ever will be a

liability” [Spohr v. Berryman, 589 So. 2d 225 (Fla. 1991)]. Example: a breach of contract to

make a will that was not discovered by the claimant until after death. The court reasoned that

while the claim did not come to fruition until the contents of the will were ascertained

following death, the claim, itself, was based upon an agreement which was made many years

before his death. Claims against an estate are not limited to obligations of the decedent that

could have been enforced against him while living [Spohr v. Berryman]; An action to enforce purchaser’s rights under the Pollution Control Act against the decedent seller’s estate after discovering environmental contamination on the property

[Jones v. SunBank/Miami, N.A., 609 So. 2d 98 (Fla. 3d DCA 1992)];

Exercising an option agreement with the decedent to purchase shares of stock if certain

events come to pass [Grossman v. Selewacz, 417 So. 2d 728 (Fla. 4th DCA 1982); and

exercising an option agreement with the decedent to purchase certain real estate in the event

the claimant survived certain individuals including the decedent

[Kelley v. Burnsed, 805 So. 2d 1101 (Fla. 1st DCA 2002)];

An action to enforce claimant’s rights under the federal Comprehensive Environmental

Response Compensation and Liability Act of 1980 (CERCLA). The three-year statute of

limitations under CERCLA does not preempt the shorter three-month Florida nonclaim

statute [U.S. Borax, Inc. v. Forster, 764 So. 2d 24 (Fla. 4th DCA 1999)]; and

A claim for quantum meruit or unjust enrichment for prepared-death services [Aldebot v.

Story, 534 So.2d 1216 (Fla. 3^rd DCA 1988)].

III. WHEN IS IT NOT NECESSARY TO FILE A CLAIM:

It is not necessary to file a claim against an estate for the following:

A proceeding to enforce any mortgage, security interest, or other lien on property of the

decedent [733.702(4)];

 A claim for the limits of casualty insurance protection in a proceeding to establish liability

that is protected by the casualty insurance [733.702(4)];

The filing of a cross-claim or counterclaim against the estate in an action instituted by the

estate; however, no recovery on a cross-claim or counterclaim shall exceed the estate's

recovery in that action [733.702(4)]; and

Post-death claims. Post-death claims cannot be deemed a liability of the decedent because

they arise after death. Examples:

(a)reimbursement for mortgage payments made following

death from credit life insurance policy proceeds issued to the estate. The plaintiff was not

seeking the insurance proceeds that would have been paid to the mortgagee, but rather was

seeking reimbursement of payments he was not required to make after the decedent's death

by virtue of the credit life insurance [Swenszkowski v. Compton, 662 So. 2d 722 (Fla. 1st

DCA 1995)] (b) an insurance company's claim for overpayment of benefits paid to a hospital

for services rendered to the decedent that the hospital mistakenly refunded to the personal

representative [In re Estate of Kulow, 439 So. 2d 280 (Fla. 2d DCA 1983)];(c) a claim for attorney's fees incurred post-death [Thompson v. Hodson, 825 So. 2d 941 (Fla. 1st DCA

2002)];(d) an interest in real estate that passed by operation of law upon death

[Coba v. Craig, 881 So. 2d 733 (Fla. 3d DCA 2004)]; and (e) estate expenditures[Langford v.

Ferrara,823 So. 2d 795(Fla. 1st DCA 2001)].

IV. THE “TRUST” EXCEPTION TO THE CLAIMS STATUTE:

The trust exception refers to a situation where at the time of death the decedent held bare legal title to

property, the equitable title or beneficial ownership having become vested in another who now

claims the property adverse to the estate [Estate of Peterson, 433 So. 2d 1358 (Fla. 4thDCA 1983)].

In Scott v. Reyes, 913 So. 2d 13 (Fla. 2^nd DCA 2005), the court found that the trust exception did not

apply to the claim of a former co-tenant based on the joint ownership of two accounts that the

decedent re-established in his sole name without the knowledge or consent of the co-tenant. The

court reasoned:

[I]f a decedent asserted beneficial ownership of the property before his death, a claim

to the property would be barred unless filed according to section 733.702. The reason

being that the dispute as to ownership, creating the cause of action, arose before the

decedent's death because the decedent, prior to his death, adversely claimed the

property as his own. If, however, the decedent was merely in possession of the

property but made no such assertion of ownership prior to his or her death, the

assertion of ownership being made by the personal representative or heirs for the first

time after the decedent's death would not require the filing of a claim.

It is not clear whether the trust exception applies to resulting trusts and constructive trusts. See Scott.

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Proper Venue (Jurisdiction) for Proceedings Against a Foreign Trust

2011-12-13T19:44:00.000-08:00

By: David M. Garten, Esq.

Article: Proper Venue (Jurisdiction) for Proceedings Against a Foreign Trust

Sec.736.0205, Fla. Stat. reads:

736.0205 Trust proceedings; dismissal of matters relating to foreign trusts.--Over the objection of a party, the court shall not entertain proceedings under s. 736.0201 for a trust registered, or having its principal place of administration, in another state unless all interested parties could not be bound by litigation in the courts of the state where the trust is registered or has its principal place of administration. The court may condition a stay or dismissal of a proceeding under this section on the consent of any party to jurisdiction of the state where the trust is registered or has its principal place of business, or the court may grant a continuance or enter any other appropriate order.

This statute is not jurisdictional, but rather has the purpose of having trust litigation proceed in the most appropriate forum, where there is a possibility of litigating in more than one forum. The nature and purpose of this statute was explained by the court in In re Estate of McMillian, 603 So. 2d 685 (Fla. 1st DCA 1992), as follows:

This statute is not a jurisdictional bar. It is more in the nature of a venue statute, and speaks in terms of whether a Florida court will "entertain" trust proceedings. The statute further does not seem to require the judge to dismiss a case, even after the statutory provision is invoked, as evidenced by the final sentence of the statute which provides that the judge may enter orders of continuance, or other appropriate orders. The comments of the drafters of the Uniform Probate Code, accompanying section 7-203, which is materially similar to our section 737.203, indicate:

It is assumed that under this section a court would refuse to entertain litigation involving the foreign registered trust unless for jurisdictional or other reasons, such as the nature and location of the property or unusual interests of the parties, it is manifest that substantial injustice would result if the parties were referred to the court of registration . . . . [T]he issue is essentially only one of forum non conveniens in having litigation proceed in the most appropriate forum. This is the function of this section.

In Covenant Trust Company v. The Guardianship of Lillian Ihrman, 45 So. 3d 499 (Fla. 4th DCA 2010), Covenant was the trustee of the Ihrman Trust which was being administered in the State of Illinois. The Trust reads in part "[t]his instrument and the disposition under it shall be construed and regulated and their validity and effect shall be determined by the laws of the State of Illinois." A guardianship over Ms. Ihrman was pending in Broward County. The guardian filed a Petition to Order Payment of Monthly Cost of Care/Petition to Remove Covenant as

Trustee. In response, Covenant filed a motion to dismiss the petition based, in part, on §736.0205, F.S., and argued that the action should be brought in Illinois. Judge Speiser denied the motion to dismiss. Based on Covenant’s affidavit, the appellate court found that the Trust's principal place of administration was Illinois and reversed and remanded, in part, with directions to hold an evidentiary hearing to determine if all interested parties could be bound by litigation in Illinois. The court reasoned:

It is not clear from the record if "all interested parties could not be bound by litigation in the courts of the state where the trust is registered or has its principal place of administration." Thus, if the trial court determines it has in personam jurisdiction, it will next need to determine if the interested parties could be bound by litigation in Illinois. See Meyer v. Meyer, 931 So. 2d 268, 269-70 (Fla. 5th DCA 2006) (trust administered in New York where trustee resided; no parties had any connections with Florida; trial court should have applied section 737.203 (predecessor to section 736.0205); thus, it "reverse[d] the order denying the motion to dismiss and remand[ed] for the purpose of allowing the trial court to determine whether all interested parties could be bound by litigation in New York").

In Straub v. Nationsbank,732 So. 2d 48 (Fla. 4th DCA 1999), the testamentary trust was created pursuant to the will of a resident of Missouri whose estate was probated in Missouri and was being administered by the co-trustees in Missouri. The beneficiary of the trust was a resident of Florida and brought suit in Florida alleging improper conduct by the trustees. The trial court dismissed the case for lack of jurisdiction based on the representation of the trustees that Missouri would have jurisdiction over the action. The appellate court affirmed on the basis that dismissal should have been ordered under Fla. Stat. § 737.203 [predecessor to §736.0205] which restricted Florida courts from entertaining trust proceedings relating to a foreign trust

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Homestead - Registered Aliens Under A Temporary Visa

2011-12-13T18:43:00.000-08:00

By: David M. Garten, Esq.

Art. X, § 4, Fla. Const. provides in pertinent part:

SECTION 4. Homestead; exemptions.—

(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:

(1) a homestead,….
. . .

(b) These exemptions shall inure to the surviving spouse or heirs of the owner.

In Grisolia v. Pfeffer, 2011 Fla. App. LEXIS 18673 (Fla. 3rd DCA 11/23/11), the decedent moved his family to the United States in 2005 following a kidnapping attempt on his son the previous year. Although he was attending school in Venezuela at the time of the attempted kidnapping, his son was a United States citizen with an American passport. The decedent subsequently purchased an apartment in Florida where he resided along with his son and spouse. The decedent and his spouse were registered aliens legally allowed to reside in the United States under a temporary visa.

Lenders loaned the decedent $500,000.00. The decedent died in 2009 and lenders asserted a claim against the decedent’s estate to recover the balance of the loan. The estate objected to the claim and filed a petition for the determination of the homestead status of the property. Arguing that the property was protected by Florida's homestead exemption from forced sale, the estate alleged that it was exempt from creditors. The probate court denied the petition for declaration of homestead and the estate appealed.

The appellate court reversed. The court distinguished those cases where the decedent was temporarily in the United States as a tourist because the decedent did not have the legal right to reside permanently in Florida and therefore, could not legally formulate the requisite intent to make the Florida property his family's permanent place of residence.

Here, the situation is quite different. It is undisputed that the decedent and the Widow were not in the United States as tourists. Instead, they were registered aliens legally allowed to reside in the United States under their temporary visa. Moreover, in the son's case, he was an American citizen who was born in Miami, Florida and had resided in Florida since his family moved here in 2005. The widow testified at the evidentiary hearing that her intent, along with that of the decedent, was that the family reside permanently in the apartment due to safety concerns stemming from the attempted kidnapping of the son in Venezuela. The widow further testified that she and the decedent had applied for permanent residence in the United States prior to the decedent's passing. These specific circumstances are sufficient to demonstrate the decedent's intent to have his family permanently reside in Florida.

The court also distinguished several bankruptcy cases where a debtor, because of his immigration status, could not formulate the requisite intent to make the property his permanent residence. The court reasoned that those “cases ignore that eligibility for the homestead exemption depends on the intent of the homesteader rather than that of the U.S. Citizenship and Immigration Services.”

Finally, the court distinguished those cases that involve Florida’s homestead exemption from taxation (article VII, section 6 of the Florida Constitution) from Florida's homestead exemption from forced sale (article X, section 4 of the Florida Constitution). The court reasoned that although homeowners who held only temporary visas could not form the requisite intent to become permanent residents for purposes of tax exempt status, they could form the requisite intent to become permanent residents for purposes of Florida's homestead exemption. Although the decedent never claimed a tax exemption according to the tax rolls, the court held that failure to claim the tax exemption is not evidence that property is not, in fact, homestead.

HOLDING: Under the specific facts of the this case, because the decedent's American-born son resided in the property since its purchase, the decedent and widow had a visa which gave them the legal right to reside in Florida, and were actively pursuing permanent residence status prior to the decedent's death, the court found that the decedent demonstrated the requisite intent to make the property his family's permanent residence.

Is an Attorney allowed to render fees for an Estate?

2011-12-11T07:07:00.001-08:00

By: David M. Garten, Esq.

ARTICLE: Attorney's Fees For Rendering Services To An Estate

Sec. 733.106(3) provides: “Any attorney who has rendered services to an estate may be awarded reasonable compensation from the estate.” This statute is not restricted to services that bring about an enhancement in value or an increase in the assets of the estate, but also includes services that are successful in effectuating the testamentary intention set forth in the will, that prevent the appointment of a personal representative, or that obtain the removal of a personal representative.

I. ATTORNEY’S FEES ALLOWED:

When is an attorney entitled to an award of attorney's fees pursuant to §733.106(3)?

 In re Estate of Lewis, 442 So.2d 290 (Fla. 4th DCA 1983). In Lewis, a beneficiary whose devise was being contested by the personal representative on the basis of undue influence was entitled to an award of attorney’s fees when the personal representative voluntarily dismissed his petition.

 Duncombe v. Adderly, 2008 Fla. App. LEXIS 15405 (Fla. 4th DCA 10/8/08). A beneficiary who prevents the appointment of a designated personal representative or that obtains the removal of a personal representative is entitled to an award of attorney's fees.

 Menz v. Estate of Menz, 381 So.2d 375 (Fla. 1st DCA 1980). In Menz, the surviving spouse was entitled to her recover attorney’s fees necessitated by the personal representative's failure to satisfy his duty to file a petition to determine the amount of the elective share after a proper election had been made because the attorney's efforts on the widow's behalf resulted in a change in the distribution under the will.

 Johnson v. Burleson, 61 So.2d 170 (Fla. 1952). In Johnson, the surviving spouse was entitled to recover her attorney’s fees where the legal services were necessary to require a personal representative to carry out the provisions of a will and give the surviving spouse the income as directed in the will.

 In re Estate of Griffis, 366 So.2d 80 (Fla. 4th DCA 1978). In Griffis, a beneficiary who successfully argued that decedent's destruction of two later codicils revived the provisions of the first codicil was entitled to recover his attorney’s fees because the ultimate will was determined and the estate was benefitted because the beneficiaries whom the testator intended are the ones who receive their legacies and bequests

 Baumer v. Howard, 542 So.2d 400 (Fla. 1st DCA 1989). In Baumer, a beneficiary was entitled to recover attorney’s fees by establishing that the widow unlawfully and intentionally killed the decedent because the interest of the decedent in the entireties
property passed to his estate instead of to the surviving spouse. Additionally, the attorneys benefited the estate by ensuring that the estate property was divided and distributed according to the decedent's intent.

 Tillman v. Smith, 526 So. 2d 730 (Fla. 5th DCA 1988). A beneficiary may recover attorney’s fees for those services which resulted in tax savings to the estate.

II. ATTORNEY’S FEES NOT ALLOWED

When is an attorney not entitled to an award of attorney's fees pursuant to §733.106(3)?

 In re Estate of Hand, 475 So.2d 1337 (Fla. 3d DCA 1985) and Onofrio v. Johnston & Sasser, P.A., 782 So.2d 1019 (Fla. 5th DCA 2001). A proponent of a will who is found to have procured it through undue influence is not entitled to be awarded attorneys' fees from the decedent's estate because the services rendered by the attorney are of no benefit to the estate. However, the proponent’s attorney would be entitled to recover his fees for the services that benefit the estate, such as publishing notice to creditors, protecting assets, and considering and dealing with tax issues.

 In re Estate of Simon, 549 So.2d 210 (Fla. 3d DCA 1989) and Dew v. Nerreter, 664 So. 2d 1179 (Fla. 5th DCA 1995). Attorney's fees will not be awarded if a court determines that the attorney's actions were a detriment rather than a benefit to the estate, i.e., if the services tend to break down, subtract from, or dissipate the estate.

 Samuels v. Estate of Ahern, 436 So.2d 1096 (Fla. 4th DCA 1983). A party is not entitled to recover attorney’s fees from an estate for successfully litigating entitlement to a bank account jointly held with the decedent because the bank account was not a probate asset and thus was not part of the estate.

 Franklin v. Stettin, 579 So.2d 245 (Fla. 3d DCA 1991). Services rendered by an attorney that are duplicative of the curator’s efforts are not beneficial to the estate.

 In re Estate of Freedman, 340 So.2d 1275 (Fla. 3d DCA 1977). In Freedman, attorney’s fees were denied for successfully pursuing an independent action to impress a constructive trust on legacies bequeathed by the deceased to her two half-sisters. The appellate court reasoned that because a constructive trust was placed on the funds by means of a separate action in the civil division, the estate was not benefited.

 Tillman v. Smith, 526 So. 2d 730 (Fla. 5th DCA 1988). In Tillman, attorney’s fees were not allowed to the window for successfully challenged the validity of an antenuptial agreement that was specifically referenced in the will. The appellate court reasoned that the litigation clearly thwarted the decedent’s intention as expressed in his will; the decedent clearly intended the antenuptial agreement to control and for his widow to receive only a small interest in his estate. See also Harding v. Rosoff, 951 So.2d 912 (Fla. 4th DCA 2007)(litigation over the validity of the power of appointment thwarted the testator's intent as expressed in his will).

What is Active Procurement?

2011-12-09T00:46:00.001-08:00

By: David M. Garten, Esq.

ARTICLE: “Active Procurement” Defined

This is the fourth and final article in a four part series pertaining to undue influence. There is a presumption of undue influence when the undue influencer: (1) occupies a confidential relationship with the decedent; (2) is a substantial beneficiary under the will; and (3) was active in procuring the will.

In In re Estate of Carpenter, 253 So. 2d 697 (Fla. 1971), the Florida Supreme Court listed several criteria to be considered in determining active procurement. The seven “Carpenter factors” are:

1) Presence of the beneficiary at the execution of the will;

2) Presence of the beneficiary on those occasions when the testator expressed a desire to make a will;

3) Recommendation by the beneficiary of an attorney to draw the will;

4) Knowledge of the contents of the will by the beneficiary prior to execution;

5) Giving of instructions on preparation of the will by the beneficiary to the attorney drawing the will;

6) Securing of witnesses to the will by the beneficiary; and

7) Safekeeping of the will by the beneficiary subsequent to execution.

The Carpenter court made clear that these factors are neither mandatory nor exclusive:

“We recognize that each case involving active procurement must be decided with reference to its particular facts. Therefore, the criteria we have set out cannot be considered exclusive; and we may expect supplementation by other relevant considerations appearing in subsequent cases. Moreover, we do not determine that contestants should be required to prove all the listed criteria to show active procurement. We assume that in the future, as in the past, it will be the rare case in which all the criteria will be present. We have troubled to set them out primarily in the hope that they will aid trial judges in looking for those warning signals pointing to active procurement of a will by beneficiary.”

Case law recognizes at least four additional indicators of active procurement: (a) isolating the decedent from family and friends; (b) reduced mental capacity; (c) a dramatic change in the decedent’s testamentary bequests, and (d) execution of the will was kept secret from the anticipated beneficiaries.

(a) Was the decedent intentionally isolated from family and friends with hope of breaking down whatever ties of affection existed between them? See Newman v. Smith, 82 So. 2d 236 (Fla. 1919); In re Auerbacher’s Estate, 41 So. 2d 659 (Fla. 1949); In re Ates’ Estate, 60 So. 2d 275 (Fla. 1952); In re Baldridge’s Estate, 74 So. 2d 658 (Fla. 1954); In re Estate of Winslow, 147 So. 2d 613 (Fla. 2d DCA 1962); and In re Estate of Lamberson, 407 So. 2d 358 (Fla. 5th DCA 1981).

(b) Did the decedent have reduced mental capacity, even if arguably insufficient to show lack of testamentary capacity? See In re Palmer's Estate, 48 So. 2d 732 (Fla. 1950); In re Estate of Duke, 219 So. 2d 124 (Fla. 2d DCA 1969); In re Estate of Dalton, 246 So. 2d 612 (Fla. 3d DCA 1971); and Elson v. Vargas, 520 So. 2d 76 (Fla. 3d DCA 1988). A higher degree of proof may be required to overcome an inference of undue influence where the decedent is shown to have impaired mental powers or clouded intellect. See Estate of Reid, 138 So.2d 342 (Fla. 3d DCA 1988). Additionally, where there is inequality of mental capacity and strength between the decedent and the undue influencer, active procurement may be shown by evidence of a request or suggestion by the undue influencer. See Hack v. Estate of Helling, 811 So.2d 822 (Fla. 5th DCA 2002) and Estate of Brock, 692 So. 2d 907 (Fla. 1st DCA 1996).

(c) Is there a dramatic change in the decedent’s testamentary bequests? See Newman v. Smith, 82 So. 2d 236 (Fla. 1919); Peacock v. Du Bois, 105 So. 2d 321 (Fla. 1925); In re Donnelly’s Estate, 188 So. 108 (Fla. 1939); In re Ates’ Estate, 60 So. 2d 275 (Fla. 1952); In re Estate of Witt, 139 So. 2d 904 (Fla. 2d DCA 1952); In re Estate of Tobias, 192 So. 2d 83 (Fla. 2d DCA 1966); and Estate of Burton, 45 So.2d 873(Fla. 1950).

(d) Was the execution of the will kept secret from the anticipated beneficiaries? See Estate of Burton, 45 So.2d 873(Fla. 1950).

SO YOU WANT TO CONTEST A WILL? A SIMPLE ROADMAP THROUGH THE LITIGATION MAZE

2011-12-06T13:44:00.001-08:00

By: David M. Garten, Esq.

SO YOU WANT TO CONTEST A WILL? A SIMPLE ROADMAP THROUGH THE LITIGATION MAZE

I. REASONS TO CONTEST A WILL OR TRUST

Your mother, who was suffering from Alzheimer’s disease, leaves all of her money to her male

nurse. Your brother unduly influences your father into changing the title on his brokerage accounts

to joint tenants with right of survivorship with your brother. Your 90 year old father amended his

Trust one week prior to death and stated that he left you $1 “for reasons best known to my son”.

What reasons? What happened between the time you last saw your father and the date he signed

the Trust amendment?

The common denominator in most Will & Trust contests is the concept of fairness - it’s not fair

that someone else received a disproportionally larger share (or all) of your parent’s estate. After

all, didn’t your mother tell you years ago that she was leaving everything to you and your sister?

Unfairness leads to anger, and anger leads to lawsuits!

Your first reaction is one of hurt: “What did I do to cause my father to cut me out of his Will?”

Next comes anger anger at the person who received your parent's money. “How did she deceive

my father into giving her all of his money?” ”He wouldn’t have done it on his own!” “What lies

did she tell him about me?” Finally, revenge: You are not going to let that no good so and so get

away with it! In our system of justice, we resolve our differences through the courts, i.e.,

litigation. This is where the litigation lawyer becomes an invaluable tool.

II. HIRING AN ATTORNEY

Now that you have decided to contest a Will or Trust, the next step is to hire an attorney to assist

you. Contesting a Will or Trust can be extremely complex. For that reason, consider hiring an

attorney that practices primarily in the area of Will & Trust litigation. The hourly rate may be

higher than that of a general practitioner, but in the long run, it will be worth it.

How do you find an attorney? Ask your own attorney or accountant for a referral. Alternatively,

you can find a lawyer on the internet at sites such as www.lawyers.com or www.martindale.com

under the categories of Estate Litigation, Wills & Trusts, or Trust & Estates.

Twelve questions to ask an attorney:

1. How long have you been practicing law?

2. What is your Martindale-Hubbell Rating (AV, BV or CV)

3. What percentage of your practice is Will & Trust litigation?

4. Have you handled matters like mine?

5. What are the possible outcomes of my case?

6. What are my alternatives in resolving the matter?

7. Approximately how long will it take to resolve?

8. How will you keep me informed of the progress of the case?

9. What kind of approach will you take to resolve the matter - aggressive and

unyielding, or will you be more inclined to reach a reasonable settlement?

10. Do you charge on an hourly basis, on a contingency fee basis (% of recovery), or a

hybrid (part hourly, part contingency)? If hourly, what is your hourly rate, what is

your minimum charge per hour, and how often will I receive a bill from you? If

contingency, what is your % of the gross recovery and who pays the “costs”

incurred in the litigation (copying, expert witness, faxes, travel, etc.)?

11. If you charge on an hourly basis, give me a ball park estimate of your attorney’s

fees through trial?

12. Will an associate attorney or paralegal in your office handle some of the

administrative work at a lower hourly rate?

III. THE TRIAL PROCESS

Litigation is not for the weak of heart! Because of the many unknowns and your inability to

control the case, litigation can be very stressful. The author, Ambrose Bierce, summed it up best:

“Litigation: A machine which you go into as a pig and come out of as a sausage.” Litigation is a

very slow and cumbersome process. Although the trial may last only a day or two, it may take

years to finally get to trial. As a result, the procedure can be physically and emotionally draining.

As a party to the litigation, you should have a general understanding of the legal issues involved.

Throughout the litigation, you will hear terms like: testamentary capacity, undue influence, breach

of fiduciary duty, fraud, mistake, recission, reformation, and surcharge. All of these terms have

a very specific legal meaning.

For example, a person is presumed to have testamentary capacity if at the time he signs his Will,

he understands in a general way: (a) the nature & extent of his assets; (b) the natural objects of his bounty (i.e., his siblings, blood relatives, etc.); and (c) the nature and affect of the Will (the dispositive scheme of distribution). A person can be demented, drunk, and on drugs, but if he has a lucid moment at the time he signs his Will, he has testamentary capacity. A person is unduly influenced if there is over persuasion, duress, force, coercion, or artful or fraudulent contrivances to such a degree that there is a destruction of his free agency and willpower. It goes without saying that a person suffering from dementia is more susceptible to undue influence than a person of sound mind. Take, for example, the situation where the caregiver convinces your 90 year old grandfather who is suffering from Alzheimer’s disease to give her all of his money on the verbal promise that she will give it to you and your siblings upon his death. The care giver unduly influenced your grandfather into giving her all of his money and should be held accountable for her actions.

A. TRIAL PREPARATION (LITIGATION = TRIAL)

Litigation attorneys are a different breed of lawyer. They enjoy the excitement of going to court -

they enjoy arguing, the unknown, the drama. From the very first moment that you retain your

lawyer, he is preparing for trial. He is looking for a theme - a common denominator that brings

all of the facts and legal issues together into one cohesive and logical story. Give your attorney

every document whether you believe it is relevant or not. Tell your attorney everything. Tell him

the good with the bad; don’t leave anything out. Let your attorney decide what is relevant and

what is not. You will learn a lot about what your attorney is doing by reading his monthly bills. You will see terms like: legal research, drafting, correspondence, attend deposition, draft interrogatories, trial preparation and the like. Keep in mind that his bill is merely a summary of his work product. Each word could easily translate into a twenty minute conversation about the services performed. Litigation is “behind the scenes” work - you never see the practice, only the final result.

B. MEDIATION

Mediation is an informal, process whereby the parties and their attorneys meet with an impartial

third party (a mediator) to try and settle the case before trial. Mediation is not binding unless the

parties agree to settle the case. At trial, you have a winner and a loser. The judge or jury decides

your case and there is no way to guarantee the outcome. Not so with mediation - all parties can be a winner! The parties decide how to structure the settlement. It takes the element of risk out of the equation. As a result, most cases are settled in mediation.

C. THE TRIAL

Depending on the issues involved, you may have a jury or an non-jury trial. There is no average

length for a trial. Your trial could last ten minutes or three weeks. Again, it depends on the

issues involved. You should be present throughout the entire trial, so make the necessary

arrangements ahead of time. Don’t make the mistake of believing that after you testify, you are

no longer needed. You don’t want the judge or jury to see an empty chair. They want to see that

you are involved in your case and that you care about the outcome.

D. ATTORNEY’S FEES/COSTS

There is no guarantee that you will be able to recover your attorney’s fees and costs. Additionally,

you may be required to pay the opposing party’s attorney’s fees and costs! Prior to filing a

Will/Trust contest, think long and hard as to why you want to file a lawsuit. What is your ultimate

objective? Is it to correct a wrong no matter what the cost? Is it to discover why you were

excluded from your father’s Will? Is it solely for monetary gain? Make your objectives known

to your attorney from the very beginning. His trial strategy may depend on your objectives.

IV. SUMMARY

The litigation maze is very complex and full of dead ends. To successfully navigate through the

maze, you must trust your attorney to guide you. Don’t question your attorney’s motives and

strategy. Rely on his judgment and instincts while keeping the lines of communication open. If

you have a question, ask him. Plan ahead for a lengthy and stressful journey. Remember, when

you finally reach the end of the maze, life as you knew it continues anew.

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