In almost every trust or probate litigation case, I tell my client that death and money can do bad things to good people. Unfortunately, this statement turns out to be true in just about every case. This type of litigation is a form of family law involving different family members such as siblings, parents, uncles, and other relatives fighting over two things: assets and control.
In most cases, a dispute arises between parties over the distribution of the estate assets or the control over the estate or trust administration. A decedent’s ill thought out estate plan or lack of an estate plan can set these disputes in motion. Estate planning decisions that could give rise to disputes are: (1) unequal distributions between beneficiaries; (2) making a stepparent trustee over an adult stepchild’s trust, or (3) not even having an estate plan.
Without an estate plan, the estate is distributed according to the intestate statute, and the selection of the personal representative could be left up to chance. However, people have legal tools at their disposal, such as prenuptial agreements, wills, and trusts to plan their estate around the complexities and nuances of their family.
Probate and trust litigation can be expensive and emotionally draining for the parties. While the legal merits of these cases will always be important, attorneys should also pay close attention to how emotions dictate the client’s decisions. Clients might be motivated by the historical relationship with the other party. If the case is between siblings, chances are those siblings did not get along growing up. If the case is between a stepparent and a stepchild, then they probably did not trust each other before. Understanding these factors can be critical to setting client expectations and explaining the relevant considerations for the judge in deciding the case.
It is essential to know that trust and probate litigation is not just any other type of lawsuit. The Florida Probate and Trust Codes must be carefully studied because they dictate the parties’ claims and defenses. Examples of some laws that impact these cases are below.
Beneficiaries need to be aware that if they contest the validity of a will or a trust, they may be required to renounce any prior distribution. See Barnett Nat. Bank of Jacksonville v. Murrey, 49 So. 2d. 535, 537-38 (Fla. 1950). Renunciation does not eliminate the beneficiary’s entitlement; however, “[t]he purpose of such renunciation is three-fold: 1) to protect the executor in the event the will is held invalid; 2) to demonstrate the sincerity of the contestant and prove that the suit is not merely vexatious, and 3) to have the property readily available for disposition under a decree of the court.” Carman v. Gilbert, 641 So. 2d 1323, 1325 (Fla. 1994).
Beneficiaries of a trust also need to be aware that a trustee may withhold distributions during the litigation. According to Florida Statute § 736.08165, if the trustee believes that the outcome of the dispute will impact the rights of the beneficiaries, then the trustee can withhold distributions.
A trustee must be aware that as soon as he or she receives a complaint about a breach of fiduciary duty, then the trustee must give specific notices to the beneficiaries. See Fla. Stat. § 736.0802(10). One such notice could cause beneficiaries to prevent a trustee from using trust funds to pay for a legal defense.
Luckily, fiduciaries can also rely on the code for defenses to a lawsuit. A trustee or personal representative is entitled to rely on professionals, such as accountants, and act upon their advice without independent investigation. See Fla. Stat. § 736.0816(20); see e.g., Wohl v. Lewy, 505 So. 2d 525, 526 (Fla. 3d DCA 1987). However, a fiduciary advancing this type of defense must be aware that doing so could waive the accountant-client or attorney- client privilege. Asserting this defense could put communications with professionals “at issue” and cause at least a partial waiver of the privilege. See Choice Restaurant Acquisition Ltd. v. Whitley, Inc., 816 So.2d 1165 (Fla. 4th DCA 2002).
Like many other types of litigation, mediation can be a useful tool to resolve a highly contested case. Given the many nuances of the Florida Probate and Trust Codes, parties should seek a mediator who is a subject matter expert in this area of the law. These types of cases are often filled with much emotion, so a mediator with subject matter expertise will be best suited to reign in unreasonable expectations, clients, and lawyers to have a meaningful mediation. Alessandro A. Apolito