The 2014 State of Florida legislative session brought about several changes in the area of trusts and estates. Among those passing into law was the amendment to the antilapse provisions of the Florida Trust Code (Florida Statutes Chapter 736). As amended, the new provisions mirror the language and intent of similar provisions contained in the Florida Probate Code (Florida Statutes Chapter 732). It is assumed at law that in order for a named beneficiary to take under a devise, the beneficiary must survive the settlor or testator. Antilapse provisions contemplate the status of a devise to a beneficiary who predeceases the settlor or testator, a contingency presumably unanticipated by the settlor or testator. Such provisions address the consequences of the common law rule of lapse in attempting to reflect the presumed intent of the testator.
In the absence of statutory provisions or of specific directives in the dispositive document, a devise lapses in the event that the beneficiary predeceases the settlor or testator and a substitute beneficiary is not named. If the devise so fails, the amount of the distribution passes to the residuary estate or by the laws of intestate succession. In varying ways, antilapse statutes prevent specified gifts from failing when the named beneficiary is not alive to receive the devise. In Florida, prior to the 2014 session’s Trust Code amendment, different antilapse standards applied under the state’s Trust Code and Probate Code. This led to inconsistent determinations under identical scenarios for trusts and wills.
Prior to its amendment, Florida Statutes §736.1106 provided that if a beneficiary failed to survive the trust’s distribution date (the time when the right to possession and enjoyment of a future interest arises), a per stirpes substitute gift would be created in the beneficiary’s surviving descendants. In this event, there need not exist a familial relationship between the settlor and the predeceasing beneficiary and all gifts survive as long as there exist descendants. In contrast, under Florida Statutes §732.603, the antilapse provision of the Florida Probate Code, if a devisee (the intended taker under a will) who is a grandparent or a descendant of a grandparent of the testator fails to survive the testator, a per stirpes substitute gift is created in the devisee’s surviving descendants. In this instance, a familial relationship between the testator and the predeceasing beneficiary must exist and the gift will fail, or lapse, if such relationship does not exist.
The recent amendment to Florida Statutes §736.1106 (a part of CS/SB 998) mirrors the language of §732.603. The amendment, which took effect July 1, 2014, provides that the antilapse provisions apply only if the beneficiary is a grandparent or a lineal descendant of a grandparent of the settlor or testator.
The Judiciary Committee Report on the amendment states in part that “[i]t is the opinion of some practitioners of probate and trust law that people enter into trust arrangements thinking that a trust devise operates the same as a will. When the results under the terms of a trust are not what the individuals had hoped for litigation ensues.”
As Florida Statutes §736.1106 and §732.603 each constitutes a rule of construction effective “unless a contrary intent” is indicated in the dispositive document, they act primarily as default provisions. Specific focus on this area during the course of document drafting can anticipate and address the effect of failure of a beneficiary to survive the settlor or testator.
The amendment applies only to trusts that become irrevocable after June 30, 2014.
If you or someone you know is interested in establishing a trust or drafting a will that addresses lapse and antilapse concerns, please do not hesitate to contact the experienced estate planning attorneys at Chepenik Trushin LLP, who are ready, willing, and able to take care of all of your estate planning needs.