Florida Probate Litigation Lawyer Blog

Charitable Trusts in Florida

July 8, 2011 | by ktlaw4

In addition to utilizing a trust to provide for your family, you can also create a trust to benefit a charitable organization. To qualify as a charitable trust, the benefiting party must be a charity pursuant to section 501(c)(3) of the Internal Revenue Code. Naturally, such entity must operate solely for religious, educational, and other charitable purposes whereby zero net earnings of the entity benefit any private shareholder or individual. Because donations to charitable organizations are tax deductible, a charitable trust serves as an easy way to provide for a charitable cause and achieve tax benefits.

Florida law, as emulated in section 736.1210 of the Florida Probate Code, encourages the use of charitable trusts and works to preserve the intent of any individual that seeks to provide for a charitable beneficiary through a trust. This intent of the Florida legislature is carried out further by section 736.0405 of the Florida Probate Code, which states that if the trust itself does not name a specific charity as a beneficiary, a court may select a charitable purpose or beneficiary. Of course, the court must consider the settlor’s intent wherever applicable when determining which charity will benefit under the trust.

Instead of creating a trust solely for the benefit of a charitable organization, many individuals name charities as beneficiaries to the remainder of the trust’s assets after the interests of other beneficiaries have terminated. For example, a trust may provide for one’s children, during their lifetimes, with the residuary of the trust going to a charity upon the passing of the children. This form of a trust is considered a split interest trust, in that it serves a purpose in addition to providing for a charitable purpose. Trusts can also be created to benefit one or more private foundations as well.

Rules of Construction for Trusts and Impact of Florida Law

June 23, 2011 | by Bradley H. Trushin

In Florida, the intent of a settlor (the person who creates a trust) proves extremely important with respect to the handling of the trust’s assets. Florida Probate Code section 736.1101 states that “[t]he intent of the settlor as expressed in the terms of the trust controls the legal effect of the dispositions made in the trust.” Thus, according to Florida law, it is the intent “as expressed in the terms of the trust” that is the benchmark to follow. This can become an issue should any disputes arise regarding the rights of trust beneficiaries after the settlor has passed. Because the distribution of trust assets will follow the express terms of the trust itself, it is very important that the settlor clearly convey his or her intentions to the attorney who drafts the instrument. After all, once the settlor passes away, he or she can no longer amend the terms of the trust to more readily convey his or her intentions.

While the terms of a trust typically prevail over any requirement stated in the Florida Probate Code, there are a few exceptions whereby Florida law controls the construction of a trust. For instance, Florida Probate Code section 736.0105 requires that all trustees act “in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.” Thus, any power that purports to allow a trustee to act in any manner, regardless of whether it is in good faith or not, will be disregarded. Moreover, section 736.0105 also states that a trust cannot have a purpose that is unlawful or contrary to public policy. The requirement for a trust to be in accordance with public policy supports section 736.1104 of the Code, which states that a beneficiary who intentionally kills the settlor of the trust is not entitled to any trust interest if said beneficiary is convicted of murder under a court of law.

The Florida Probate Code will also govern a trust’s provisions in lieu of the settlor’s intent in the event of the settlor’s divorce. Section 736.1104 of the Code states that, unless the trust provides otherwise, any provision of a revocable trust that affects the settlor’s spouse becomes void should the spouses divorce. Clearly, this section of the Code demonstrates another way in which Florida law will step in and modify the terms of the Trust. As a matter of public policy, these situations are reasonable and likely have the effect of carrying out the settlor’s intent once he or she has passed.

Duties of a Personal Representative in Florida

June 17, 2011 | by Bradley H. Trushin

The appointed personal representative of a Florida resident’s estate, i.e. the individual placed in charge of distributing the assets of the estate, must abide by certain fiduciary duties that he or she owes to the beneficiaries (the individuals named to receive assets) of the estate. Suppose you are named a beneficiary of your recently deceased grandfather’s estate whose domiciliary was in Miami Beach. Under Florida law, the personal representative must abide by certain duties to ensure that you receive the assets that the estate leaves in your name. Florida Probate Code section 733.602 states that a personal representative has a duty “to settle and distribute the estate of the decedent in accordance with the terms of the decedent’s will…as expeditiously and efficiently as is consistent with the best interests of the estate.”

A personal representative necessarily enjoys broad powers to administer an estate of a decedent. Pursuant to Florida Probate Code section 733.608, the personal representative holds all of the “real and personal property of the decedent, except the protected homestead” and “the rents, income, issues, and profits” from any such property. The personal representative then uses these assets to pay specific devises (set amounts of gifts or money), the family allowance, any elective share, estate taxes, and other expenses incurred during the administration of the estate. Additionally, the personal representative distributes any assets to named beneficiaries of the will in accordance with the will’s terms.

Thus, a personal representative must take actions necessary, but in accordance with the law, to effectively administer a decedent’s estate. However, if you are a beneficiary of an estate and feel that the personal representative is not acting in the estate’s best interests, you may have some recourse. Under Florida Probate Code section 733.504, a personal representative may be removed for various reasons. The reasons provided for under the Code include, but are not limited to, the following: (1) a court determination that the personal representative is incapacitated, (2) physical or mental incapacity that renders the person unable to carry out his or her duties, (3) wasting or maladministration of the estate, (4) conviction of a felony, and (5) having conflicting or adverse interests against the estate that will interfere with its administration. Therefore, it is important for you, as an entitled beneficiary, to make sure that the personal representative is not in breach of any of his or her duties owed to you or any other beneficiary under the will.

Can a spouse be unintentionally disinherited in a will in Florida? – Pretermitted Spousal Rights

June 9, 2011 | by Bradley H. Trushin

What happens when you marry someone after they have already made a will and sometime after the marriage your spouse dies without revising that will or making a new will? For example, Joe, a successful businessman from North Miami, creates a will leaving all of his property to his two sons. Several weeks later, Joe meets Sally, a doctor from Palm Beach, and they get married. Unfortunately, on their honeymoon Joe gets into an accident and dies without revising his will to include Sally. It may seem that because Sally is not provided for in the will before marriage that she will not be able to inherit from Joe’s estate.

However, Florida Statute 732.301 addresses this very scenario and provides that the surviving spouse will receive a share in the estate of their deceased spouse equal to what they would have received had their spouse died without a will (intestate). The spouse will then receive a share of the estate

When this occurs, the spouse is considered pretermitted.

Procedures to Determine Incapacity in Florida

May 31, 2011 | by ktlaw4

It is an unfortunate but inevitable fact of life that, as we grow older, there is a tendency for our mental abilities to begin to fade. When a person’s mental abilities fade to the point where they can no longer look after their own interests and are unable to understand the implications of certain decisions, in legal terms they are said to be “incapacitated.” Sometimes it becomes necessary for family members to step in and take control of some aspects of the incapacitated person’s life and their finances. This can be a very difficult and emotional process, since many times the incapacitated person is extremely resistant to giving up control, especially when that person has always taken great pride in being independent. Although there may be slight differences in the procedures to determine incapacity between Miami-Dade, Broward and Palm Beach counties, the Florida Statutes set forth general guidelines for the determination of incapacity.

The first step of the process occurs when a person files sworn papers with a court stating that they believe an individual is incapacitated. The court will then prepare a notice for hearing that set a time and place for an initial hearing to determine if the person actually is incapacitated. These documents, by law, must be shown to the person claimed to be incapacitated as well as his or her attorney and immediate family members, because they all have a right to be at the hearing. Those documents will also appoint an attorney for the person claimed to be incapacitated, although he or she is welcome to select his or her own attorney if they are able. Sometimes the court will appoint a person to act as the emergency temporary guardian of an incapacitated person. The emergency temporary guardian’s purpose is to make sure the incapacitated person’s rights and needs are accounted for.

Next, the court will appoint a committee of three people to decide if the person is incapacitated. One member of the committee must be a doctor. The other two members can also be doctors or they can be psychologists, nurses, or anyone the court believes has enough experience and education. Even though the personal doctor of the person cannot be on the committee, the committee members are required to consult with him or her. If the person claimed as incapacitated does not speak English, an interpreter will be provided so that he or she can communicate with the committee. This is because a person has a right to speak up against being declared incapacitated because taking away a person’s liberty, even if it is for their own good, is involves the removal of fundamental rights. Such rights are afforded serious and substantial protections under the law.

Is a step-child considered a lineal descendant in Florida?

May 24, 2011 | by Bradley H. Trushin

In Florida, “lineal descendant” or “descendant” is defined to mean “a person in any generational level down the applicable individual’s descending line.” Essentially, a descendant is a blood-relative of the deceased. Under Florida law, adopted children are also considered descendants for the purposes of Probate.

So what does this really mean? Suppose John, a resident of Fort Lauderdale, Florida, makes a will that simply states, “I leave everything I own to my lineal descendants.” Now, suppose John has two children from his previous marriage (related by blood), and his second wife, Jane, has two children from her previous marriage, neither of which John has adopted. This means, if John dies without modifying his will, John’s step-children receive nothing.

John’s step children will receive nothing because, under Florida law, a technical term, such as “descendant,” used in a Will, is accorded its legal definition unless obviously used by the deceased in a different sense. Additionally, in construing a will, the courts look to the intent of the deceased and try to give effect to the deceased’s wishes. In determining the intent of the deceased, the courts look to the wording of the will. If the will says the word “descendant,” and the word is not defined, the court will assume that the deceased intended “descendant” to have its ordinary legal meaning.

Amendments to the Florida Probate Code

March 14, 2011 | by Bradley H. Trushin

The Supreme Court of Florida has adopted amendments to the Florida Probate Code effective on January 1, 2011, at 12:01 a.m. Significant changes were made to Section 732.401, Florida Statutes and will effect the way homestead property is inherited by surviving spouses. For instance, prior to the changes, if a resident of Fort Lauderdale, Florida died and was survived by a spouse and one or more children, the surviving spouse took a life estate in the homestead, and the blood relatives of the deceased would receive the homestead upon the death of the surviving spouse. A life estate means that the surviving spouse has the right to use the homestead property for the duration of his/her life, but upon the death of the spouse, the homestead belongs to deceased’s blood relatives. Additionally, the surviving spouse who has a life estate is responsible for the costs of maintaining the property.

Upon taking a life estate in the homestead property, a spouse may be confronted with new economic duties, such as property taxes, insurance, ordinary maintenance, and mortgage interest. These may be expenses that the surviving spouse cannot afford. In response to these new found financial responsibilities, some practitioners attempted to use disclaimers, a process by which the surviving spouse essentially declines to accept the homestead property, to avoid inheriting a life estate. However, the courts reached inconsistent results.

The adopted amendments to the Florida Probate Rules now provide that, instead of a life estate, a surviving spouse may elect to take an undivided one-half interest in the homestead as a tenant in common. A “tenant” is the legal term for co-owner of property. If the surviving spouse chose to take a tenancy in common, instead of a life estate, the spouse would possess the property with someone else, in this case, the blood relatives of the deceased. A tenancy in common essentially means that two or more people (the surviving spouse AND the blood relatives of the deceased) would co-own the homestead property.

Florida’s Simultaneous Death Law

March 8, 2011 | by ktlaw4

In our society, it is common for spouses, family members, or close friends to travel together for various purposes. As such, whether travelling by automobile through Miami, by plane over Fort Lauderdale, by train through Boca Raton, or even by boat along the coast of West Palm Beach, there is, unfortunately, always a risk that a tragic accident may occur that would result in the death of multiple people. The issue of simultaneous death arises when an individual with a will, trust, or life insurance policy dies in the same accident as the beneficiary of that will or trust, and when there is uncertainty as to which person died first – the testator (creator of the will) or the beneficiary (the person who is designated under the will to receive some or all of the assets of the estate, trust or life insurance policy).

For instance, imagine that a newly married couple creates separate wills that leave all of their individual assets to the other spouse upon death. In this case, the wife would be the primary beneficiary of the husband’s will, and the husband would be the primary beneficiary of the wife’s will. Also imagine that the husband’s will states that if his wife dies before he does, all of his assets would go his brother. Thus, the husband’s brother is the contingent beneficiary of the husband’s will. Similarly, the wife’s will states that, if her husband dies before she does, all of her assets would go to her mother as the contingent beneficiary. Now, the issue of simultaneous death may arise if, for example, the couple gets into a fatal accident while driving from Boca Raton to Miami Beach.

In this scenario, if the husband dies instantly, but the wife dies one week later in the hospital, then it is clear the husband died first. As a result, all of his assets would go to his wife as the beneficiary under his will, and then they would go to his wife’s mother, because she was the contingent beneficiary under his wife’s will. Therefore, all of the husband’s assets would go to his wife’s mother upon his death.

So what exactly is a “sound mind” in Florida?

March 4, 2011 | by Bradley H. Trushin

According to Florida Statute § 732.501, any person who is of sound mind and legal age (at least 18 years old or emancipated) can make a will. Florida is home to an eclectic and wide ranging group of people, especially in Miami, Ft. Lauderdale, and Palm Beach. However, not every one of its adults or emancipated minors is qualified to make a will that would later be enforceable. Those lacking a sound mind, otherwise known as incapacited, may have their wills challenged by effected beneficiaries.

So what exactly is a sound mind? Florida courts have held that several behaviors could disqualify a person from making a valid will. For instance, an individual suffering from alcohol or drug addiction, mental weakness, illness, or old age may not be able to create an enforceable will; yet the presence of such condition(s) alone is not enough to invalidate a will. The residing probate court will enforce the will if the testator (creator of the will) had sufficient wherewithall and memory to understand the consequences of his/her action at the time the will was executed. If the substance abuse or condition impaired one’s mental capacity to comprehend the consequences of a will, then the court may not enforce it.

Courts will determine the mental capacity of the testator on a case by case basis to see whether there was indeed a lack of capacity. The mental state of the testator is determined at the time the will is created and executed, not the time subsequent. Thus, if Aunt Lucile created a will and then developed a drug problem, a court would likely enforce the will after a finding that she was not mentally incapable at the time she made the will.

Abatement of Devises in a Will to Satisfy Claims Against an Estate in Florida

February 24, 2011 | by ktlaw4

In a perfect world, a testator’s estate will have enough funds to not only cover all of the bequests provided for in the testator’s will, but also pay for the costs of administering the estate, debts, and other unexpected expenses like elective or pretermission shares. Much of the time, however, the value of devises (gifts) contained in a will exceed what the estate can actually provide for after such costs associated with the probate process have been paid. When this occurs, certain devises made by the will are put toward satisfying these debts instead of going to the devisees referenced by the will in a process called abatement.

Florida Statutes section 733.805 provides the order by which devises will abate absent a scheme already provided for in a will. The order provided by the statute relies primarily on the type of the devise. For example, take Lea, a resident of Miami-Dade County, who has recently passed away leaving the follow devises in her will: (1) $400 cash to her son, Abe; (2) $400 to be paid for by the sale of her 1987 Oldsmobile Cutlass to her daughter, Betsy; (3) her iPhone to her daughter, Chelsea; and (4) everything that is left over to her favorite charity. All four of these devises illustrate a different type of devise, which, under Florida Statutes section 733.805 will abate in a certain order when satisfying claims against Lea’s estate.

The first category of devises that will abate are those passing through intestate succession. For example, if someone dies intestate (without a will), all those who would receive an intestate share of the estate take a pro-rata deduction in what they would otherwise take to cover costs that deplete the estate. Also, any leftover property in one’s estate that is not provided for by the will at all passes through intestacy and abates before the actual devises made in the will. An example of this first category is not in Lea’s estate, as her will provides for payment of leftover property to her husband.