Trust litigation is similar to will contest litigation in that trusts provide for distribution of estate assets during life or at death, depending upon whether the trust is a self-settled trust or irrevocable instrument. What differentiates a trust from a will is that a trust usually avoids the probate process. In a trust, the trustee handles the administration of the trust estate after the passing of the trustmaker. On the other hand, a last will and testament requires the administration of the estate through probate and is supervised by a Florida probate court. A personal representative handles the administration of the estate after the passing of the testator.
With the exception of avoiding the probate process, the same principal of law applies to trust administration in Florida as they do to personal representatives in Florida for probate of wills. Both a trust and last will and testament require the same formalities in that the instruments must be executed before two attesting witness and notarized.
When is trust litigation required? Similar to a will contest there are basically four (4) legal grounds for contesting the validity of a trust instrument:
- Undue Influence. One substantive objection in which the family may claim is that the settlor was under undue influence from someone such as a caregiver or close family relative. For example, a close family member may block all communication from other family members claiming that no one cares about him or her. Thereafter, the family member may coerce your loved one to sign everything over to him or her.
- Lack of Mental Capacity. Another avenue for a Florida trust contest is a substantive objection in which the family claims lack of mental capacity of the settlor. Lack of mental capacity may occur if the trust was executed while a family member was incapacitated, in the hospital under medication, or the family member may have Alzheimer’s or late stage dementia.
- Fraud. Also, a trust beneficiary could claim a trust or a modification to a trust was a product of fraud. If the court agrees, the trust or part of the trust could be determined invalid and the estate could be settled through a formula established by Florida law. In some cases, the trust may be completely disallowed requiring the estate to be handled as if no trust or will exists, thereby forcing intestate succession.
- Improper Execution. Another avenue for a Florida trust contest is a procedural objection, which could be a challenge based on improper execution of the trust instrument. The court could determine that the trust was not properly signed or executed with the settlor and two witnesses present or without notary authentication, and thereby render it invalid
Other grounds for trust litigation include improper handling of the trust estate as follows:
- Spousal elective share. Did the spouse sign a prenuptial agreement disallowing the spousal elective share but took an elective share anyway? Distribution of trust assets that are not allowed or exceed the allowable limit for a spouse may be questioned if not set forth in the trust instrument.
- Judicial interpretation. Is the construction of the trust instrument unclear, confusing or is there ambiguous language in the trust instrument? If the language is ambiguous and confusing, you may have grounds to contest the trust requiring judicial interpretation.
- Trust reformation or modification. Under some circumstances, trust litigation may be required to reform or modify the trust due to ambiguous language and to satisfy the settlor’s intent.
- Breach of fiduciary duty. Trust litigation occurs when a trustee is suspected of:
a. Failure to make proper or timely distributions,
b. Failure to make proper or timely accounting,
c. Failure to administer the trust in a manner required by the trust document,
d. Failure to follow the prudent investor rule or making improper investments,
e. Self dealing or conflicts of interest,
f. Excessive trust compensation.
While not as common, another strategy a beneficiary may claim is interference with expected lifetime gift or distribution. A prospective beneficiary may file a suit against a trustee who interferes with his or her expected lifetime gift or distribution at death. The prospective beneficiary may be required to prove the settlor’s specific intent regarding the gift or distribution, and that if the decedent were alive, would have made the gift or distribution.
In some, if not all cases, wherein the prospective beneficiary wins the case, the court may allow reimbursement of payment of attorney fees and costs.
If you feel that the trust was is invalid or the trust estate is being improperly handled, contact Florida Probate and Trust Litigation Attorney Thomas Upchurch to discuss your trust litigation matter at (386) 272-7445 or email him at tupchurch@upchurchlaw.com for your free initial consultation.
Florida Estate Planning Attorney Thomas Upchurch serves the entire state of Florida, serving primarily in vicinities of Central and North Florida Areas which include Daytona Beach, Port Orange,Deland, Ormond Beach, Jacksonville, Palm Coast, Orlando, Saint Augustine, and New Smyrna Beach.Areas he serves in South Florida include Miami, Ft. Lauderdale, Coral Springs, and Coral Gablesand in West Florida include Tampaand Clearwater. Even if your city is not listed, Attorney Upchurch may still handle your matter.
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This blog post only reflects my personal views in my individual capacity. It does not necessarily represent the views of my law firm or my past clients, and is not sponsored or endorsed by them. The case-specific information contained in this blog post is based solely on opinion, and is provided only for educational purposes and is not intended to provide specific legal advice. No representation is made about the accuracy of the information posted on this blog site. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.
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