PROBATE & TRUST LITIGATION By: R. Lee McElroy IV Downey McElroy PROCEDURE CONSIDERATIONS In Rem vs. In Personam PROCEEDINGS

In Rem In Personam • The court has jurisdiction over the • The court obtains jurisdiction over the property (the res) and can determine parties themselves by service of the rights of parties in the property process, waiver, or voluntary after reasonable notice that complies appearance with due process • proceedings are generally in rem. See F. S. 731.105 • Probate court’s cannot enter an order of judgment against a beneficiary’s personal assets unless in personam jurisdiction is obtained. See In re Estate of Vernon, 608 So. 2d 510 (Fla. 4th DCA 1992). IS FORMAL NOTICE ENOUGH

• Service of formal notice is only sufficient to acquire jurisdiction over interested persons in the estate to the extent of their interest in the estate. See F. S. 731.301(2) • Formal Notice is not good enough to: • Transform joint assets into estate assets or challenge pre-death transfers. See Galego v. Robinson, 695 So. 2d 442 (Fla. 2nd DCA 1997) • Handle a business dispute with a 3rd party when the estate has an interest. See In re Estate of Vernon, 608 So. 2d 510 (Fla. 4th DCA 1992) • An action against the beneficiaries or of an inter vivos trust concerning the assets or validity of the trust. See In re Estate of Black, 528 So. 2d 1316 (Fla. 2nd DCA 1988) WHAT TO DO IF FORMAL NOTICE IS NOT GOOD ENOUGH?

• Have the opposing party waive jurisdiction; • File and serve the action in accordance with the rules of service of process in F. S. Chapter 48. EXCEPTION

• A is subject to in personam jurisdiction of the court for all purposes by filing a petition for administration. See Laushway v. Onofrio, 670 So. 2d 1135 (Fla. 5th DCA 1996). • However, to obtain a surcharge against a personal representative, formal notice must be served on the personal representative individually. See Kozinski v. Stabenow, 152 So. 3d 650 (Fla. 4th DCA 2014). ADVERSARY PROCEEDINGS

• Always adversary proceedings pursuant to Florida Probate Rule 5.025: • Remove a PR; Modify a will; • Surcharge a PR; Cancel a devise; • Remove a Guardian; Partition a property for distribution; • Surcharge a Guardian; Determine Pretermitted status; • Probate a lost or destroyed will; Determine Pretermitted share; • Determine beneficiaries; Determine and Contribution; • Construe a will; Revoke Probate • Reform a will; ADVERSARY PROCEEDINGS CONTINUED

• Other proceedings may be declared adversarial by serving a separate pleading styled “declaration that proceeding is adversary”. See Florida Probate Rule 5.025(b) • This can be done by Petition, Respondent, or declared by the Court. ADVERSARY PROCEEDING PROCEDURE

• The Petition must be served via formal notice. • Formal Notice service rules are found in Florida Probate Rule 5.040. • Once served, the proceedings are conducted similar to civil suits and the rules of Civil Procedure apply. • Remember there are exceptions to this, including the probate exception to Florida Rules of Civil Procedure 1.520 about attorney fees WILL CONTESTS

• Lack of • • Mistake • Insane Delusion • and Duress • Failure to execute properly • Revocation TESTAMENTARY CAPACITY

• F. S. 732.501 “any person who is of sound mind and who is either 18 or more years of age or an emancipated minor may make a will.” • Elements of Testamentary Capacity • General understanding of the nature and extent of the property to be disposed of; • Natural objects of her bounty; • General understanding of the practical effect of the will as executed. • See In re Wilmott's Estate, 66 So. 2d 465 (Fla. 1953). • Capacity to create a will is presumed. See Hendershaw v. Estate of Hendershaw, 763 So. 2d 482 (Fla. 4th DCA 2000). TESTAMENTARY CAPACITY

• Raimi v. Furlong, 702 So. 2d 1273 (Fla. 3rd DCA 1997) expresses the strength of the presumption of testamentary capacity in Florida. • Testamentary Capacity is temporal, meaning capacity is only needed when the is actually signing the will. He can be incapacitated before and after, but have a “lucid interval”. • If the testator was adjudicated incapacitated before signing though, the will is presumed to be invalid and the proponent must prove it was signed during a lucid interval. • can come from lay or expert testimony and the trial court weighs the evidence. The appellate court will not overturn a lower court so long as there is “competent, substantial evidence”. Raimi at 1286. UNDUE INFLUENCE

• F. S. 732.5165 provides that any part of a will or a revocation is void if procured by fraud, duress, undue influence, or mistake. • A presumption arises if a party can show the alleged undue influencer: • is a substantial beneficiary under the will; • occupied a confidential relationship with the decedent; • was “active in the procuring” of the will • The amount of undue influence necessary is related to the physical and mental health of the target i.e. the amount of undue influence necessary to overturn a will is less if the testator was weak, frail, and mentally compromised. See In re Reid's Estate, 138 So. 2d 342 (Fla. 3rd DCA 1962), overruled in part by In re Carpenter's Estate, 253 So. 2d 697 (Fla. 1971). CARPENTER ESTATE

• 253 So. 2d 697 (Fla. 1971) • The seminal case in undue influence • Creates a list of seven non-exclusive factors to show active procurement: • Presence of the beneficiary when the will is signed; • Presence of the beneficiary when the testator says he wants to make a will; • Recommendation by the beneficiary of the attorney to draft the will; • Knowledge of the contents of the will by the beneficiary before signing; • Giving instructions from the beneficiary to the attorney of what to put into the will; • Securing of the witnesses to the will by the beneficiary; • Safekeeping of the will by the beneficiary after it is signed SHIFTING BURDEN OF THE PRESUMPTION OF UNDUE INFLUENCE

• F. S. 733.107(2) provides that the “presumption of undue influence implements public policy against the abuse of fiduciary or confidential relationships and is therefore a presumption shifting the burden of proof…” • This significantly changed Florida in 2002. CONFIDENTIAL RELATIONSHIP

• Any situation where the parties have a relationship of trust and confidence, where confidence is reposed in one party and trust accepted by the other. In re Gay's Estate, 201 So. 2d 807 (Fla. 4th DCA 1967). • The rule embraces technical fiduciary relationships and informal ones. • This factor and the presumption cannot apply to a spouse, but undue influence can still be proven against a spouse. See Jacobs v. Vaillancourt, 634 So. 2d 667 (Fla. 2nd DCA 1994) MISTAKE

• To void the will due to a mistake under F. S. 732.5165, the mistake must be one in the execution i.e. the testator signed a will, but believed it to be another document. • Neither a mistake of fact nor a mistake of the contents will invalidate the document. See In re Mullin’s Estate, 128 So. 2d 617 (Fla. 2nd DCA 1961) and Azcunce v. Estate of Azcunce, 586 So. 2d 1216 (Fla. 3rd DCA 1991). • This does not prevent a reformation or construction action. INSANE DELUSION

• A fixed false belief “without evidence of any kind to support it, which can be accounted for on no reasonable hypothesis, having no foundation in reality.” See Hooper v. Stokes, 145 So. 855, 856 (Fla. 1933). • The belief must be persistently adhered to against all evidence and reason. • An example of an insane delusion would be that the University of Florida is a better school than the University of Tennessee. FRAUD AND DURESS

• Two types of fraud will void wills: • Fraud in the execution – the testator is told she is signing something other than a will or revocation; • Fraud in the inducement – the testator is intentionally misled by a material fact that caused the testator to make a different devise than she would have otherwise made. • Duress – the threat of physical harm or coercion upon the testator. FAILURE TO SIGN PROPERLY

• If you are taking the board certification exam in Wills, Trusts, & Estates and need a slide about how to properly execute a will, you have bigger problems. • Note, any will (other than an ) if executed by a non-resident of Florida is valid in Florida if it was valid under the of the state or country where it was executed. F. S. 732.502(2). REVOCATION

• A will may be revoked by a subsequent validly executed will or , a physical act of the testator, or a physical act in the presence of the testator and at his direction with the intent to revoke it. See F. S. 732.505; F. S. 732.506. • A will cannot be partially revoked by physical means. LOST OR DESTROYED WILLS

• If the will was in the possession of the testator when she died and cannot be found after her death, it is presumed that it was revoked by physical act. • The presumption can be overcome by proof that persons with an adverse interest to that will had opportunity to destroy it. • The standard of proof to overcome the presumption is competent substantial evidence. PROCEDURE TO CONTEST A WILL

• File a Petition to Revoke Probate or Object to a Petition for Administration. • The contestant must make a renunciation of his rights under the will. It can and should be conditional. • This is an adversary proceeding so it must be served via formal notice, the rules of civil procedure apply, and so do the rules of evidence. It has to go to all interested persons. See F. S. 733.109(1)(b). • There is no right to a jury for a , although a court may empanel an advisory jury. See In re Estate of Fanelli, 336 So. 2d 631 (Fla. 2nd DCA 1976). STANDING

• F. S. 733.109 allows any interested person to petition for revocation of probate. An Interested Person is “any person who may reasonably be expected to be affected by the outcome of a particular proceeding involved.” • PRs and beneficiaries under a prior will have standing to challenge a later signed will. • If a party is disinherited under more than one document, that party must challenge all the documents or, if they are an intestate heir, assert the doctrine of dependent relative revocation does not apply. • Dependent Relative Revocation is when a new will is signed revoking a prior will, then it is determined the later will is invalid, the old will may be re-established on the idea that the revocation was dependent on the validity of the new will with the testator preferring the old will to . WEHRHEIM V. GOLDEN POND ASSISTED LIVING FACILITY

• 905 So. 2d 1002 (Fla. 5th DCA 2005). • Holds that the doctrine of dependent relative revocation creates a presumption that the old will is valid if the later will is determined invalid. • Whether the presumption is overcome is limited to a review of the testamentary instruments i.e. is the penultimate will similar to the final will or vastly different. DEADLINES

• You cannot contest a will before someone dies. • If you are served with formal notice of the Petition for Administration you have 20 days from receipt. • If you receive notice of administration you have 3 months after service. Knowledge of the administration is not enough without service. • If you are not served with either, a party may challenge until the PR is discharged. • A non-creditor caveat prevents the will from being admitted to probate without formal notice of the Petition for Administration. It can be filed before someone dies. FEES AND COSTS IN A WILL CONTEST

• If you win, you should recover under F. S. 733.106(3). • You may be entitled to fees if you proffered a will in good faith that was ultimately determined to be invalid. See Estate of Sangenito, 631 So. 2d 1125 (Fla. 4th DCA 1994). However, if the will was determined to be the product of undue influence, no fees will be awarded to the petitioner. • F. S. 733.106 has a list of factors and specifically removed the requirement that “bad faith, wrongdoing, or frivolousness” be shown to assess fees against a party. • F. S. 733.106 also allows the court to assess against a trust that the will pours into. TRUST CONTESTS

• Cannot be commenced until trust becomes irrevocable, unless the settlor was determined incapacitated and the guardian of the property files the action. • The guardianship court must approve of the filing finding that a challenge is in the ward’s best interest during the ward’s probable lifetime. • There shall be a rebuttable presumption that an action challenging the ward's revocation of all or part of a trust is not in the ward's best interests if the revocation relates solely to a devise. F. S. 744.441(11). LIMITATIONS PERIOD

• General Rule: • The time provided for in F.S. Chapter 95 i.e. four years • 6 months after service of a notice of trust • The delayed discovery doctrine may apply extending the limitations period until “facts giving rise to the cause of action was discovered or should have been discovered with the exercise of due diligence.” • 6 months may mean 20 days or 3 months if a will fully incorporates the trust. See Paquale v. Loving, 82 So. 3d 1205 (Fla. 4th DCA 2012). PROCEDURES FOR TRUST ACTIONS

• Commenced by filing a complaint and governed by the rules of civil procedure. • Venue is appropriate: • Wherever valid under F.S. Chapter 47; • Any county where the beneficiary suing resides or has his principal place of business; • Any county where the trust has its principal place of business • Service is just like any civil action via summons, not formal notice. REPRESENTATION

• See F. S. 736.0301-06. • Notice of trust proceeds must be given to each “qualified beneficiary” of the trust. • Remember it is now the Florida Attorney General, not the State Attorney who may assert rights of a qualified beneficiary with respect to a . FEES AND COSTS

• See F. S. 736.1005 and 736.1006 • Just as in probate matters, fees may be assessed against a parties share without a finding of bad faith. TORTIOUS INTERFERENCE

• This is a , not a probate claim, so file it as any other lawsuit. • Elements are: • Existence of an expectancy to inherit; • Intentional Interference with that by tortious conduct; • Causation; • Damages. • Must be no adequate probate remedy. • Compensatory and Punitive damages are possible. • Right to a jury exists. CHALLENGES TO PRE-DEATH TRANSFERS

• Can be voided on grounds of fraud, duress, mistake, undue influence, or lack of capacity. • Can be pursued via a tortious interference suit. RESIGNATION OF PERSONAL REPRESENTATIVE

• A PR’s resignation must be accepted by the court and will only be permitted if the interests of the estate will not be jeopardized. See F. S. 733.502. • Steps to resign: • File Petition for Resignation; • Serve it on all interested persons and any surety; • The court determines whether to accept the resignation and if it needs to appoint a successor PR. Resignation does NOT absolve the PR from liability for actions or inactions taken PERSONAL REPRESENTATIVE'S RESIGNATION

• If a PR is not qualified to serve when appointed, he or she must resign. • If a PR was qualified to serve when appointed, but later is no longer statutorily qualified, then he or she must file and serve a notice declaring such on all interested persons. • Failure to do either makes the PR personally liable for attorney fees and costs incurred in removing him. DUTIES OF PERSONAL REPRESENTATIVE AFTER RESIGNATION

• The PR is required to deliver all records and property to the successor fiduciaries unless otherwise directed by the court. • The PR must file an accounting and Petition for Discharge within 30 days. • The petition must be verified • Must be served on all interested persons and must state that all objections must be filed within 30 days • All objections not filed within 30 days are waived. • A hearing on the objections must be set within 90 days or the objections are waived. • A PR is discharged upon the entry of an order by the probate court. REMOVAL OF PERSONAL REPRESENTATIVE

• There is a strong presumption in the law of favoring persons whom a testator names in their will. • See F. S. 733.504 for a list of statutory grounds to remove a PR. • “Hostility” between a PR and beneficiary is not enough to remove a PR, but “irreconcilable conflicts” may be enough to justify removal. • If a person is appointed, but another person who had preference was not served with formal notice, the unserved person may petition to remove the PR. • Must be filed in the estate and is required to be served via formal notice • Fees and costs are awardable APPOINTMENT OF SUCCESSOR PERSONAL REPRESENTATIVE

• Preference is given to those set forth in F. S. 733.301. • A court is not bound by a testator’s choice, even if that person has statutory preference. The appointment is a discretionary act of the court and the court has the right to consider the character, ability, and experience of the nominee. • See Schleider v. Estate of Schleider, 770 So. 2d 1252 (Fla. 4th DCA 2000) and Pontrello v. Estate of Kepler, 528 So. 2d 441 (Fla. 2nd DCA 1988). RESIGNATION OF TRUSTEE

• A trustee may resign with: • 30 days notice to qualified beneficiaries, settlor, and any co-; or • Court approval • A resigning trustee has a duty to account, unless waived. • A resigning trustee may hold a reserve to pay attorney fees and costs associated with preparing an accounting and having the accounting approved. • F. S. 736.0705 is a mandatory provision, so any resignation plans in trust instrument must provide this minimum level of notice. • Does not require consent of beneficiaries, just notice. REMOVAL OF TRUSTEE

• Non-Judicial Removal: • Pursuant to the terms of the trust • If the instrument does not require “cause” then no cause is needed • This does not prevent a former trustee from seeking judicial approval of her accounting • Judicial Removal: • Started with a complaint • F. S. 736.0706 provides the statutory list of reasons • Case law requires proof an actual breach • The trust code provides that “unfitness” is grounds to remove a trustee, which suggests that proof of an existing breach is no longer necessary, maybe just that the trustee is no longer able to serve • Hostility between trustees and beneficiaries is generally not enough to remove, even with vindictive acts. See Parker v. Shullman, 843 So. 2d 960 (Fla. 4th DCA 2003). • Lack of co-operation among co-trustees that impairs the trust is grounds for removal. • No breach necessary, if you can comply with F. S. 736.0706(d). • Also consider a modification of the trust to accomplish removal. SUCCESSOR TRUSTEES

• Settlors can designate persons or mechanisms, both are valid. • A successor trustee accepts his position by: • Substantially complying with the method of acceptance found in the trust instrument; or • Accepting delivery of the trust property, exercising powers or performing duties of trustees, or otherwise indicating acceptance. • A nominated trustee may decline to serve. • If a successor is not named, the qualified beneficiaries may appoint by unanimous consent or the court will appoint. • The court’s power to appoint new trustees is broad. TO MAKE A WILL

• Must be signed in the presence of two attesting witnesses. • There are no equitable exceptions. • Non-resident agreements are valid if when signed it was valid under the state of her residency at the time. • These can be revoked, but not if independent consideration was given. • Can be used to go over property transferred to 3rd parties. • Beneficiaries of agreements to make “mutual wills” are not entitled to preference over the rights of a surviving spouse.