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Florida Legislative Update Regarding Trusts and Estates Law

Published: May 13th, 2011

By: Dana M. Apfelbaum

Governor Scott is expected to sign House Bill 325 into law shortly. House Bill 325 provides for several changes to the existing trusts and estates law. These changes are briefly summarized below.

Fiduciary Lawyer-Client Privilege. There is a new fiduciary lawyer-client privilege rule, whereby a fiduciary client is protected to the same extent as any other client. This rule clears up any question as to whether communications between an attorney and a client in the fiduciary capacity are privileged from discovery by a beneficiary. It is now required that the Notice of Administration for estates and the trustee’s notice to qualified beneficiaries for trusts state that this new privilege applies.

Intestate Shares. When a decedent dies intestate, the law now differentiates based on whether either spouse has children from another relationship. If all children are children in common, the surviving spouse gets the entire intestate estate. Formerly, the spouse would get the first $60,000 and half of the remainder. This is a very significant change to the laws of intestacy. If either spouse has children from another relationship, the surviving spouse gets one-half of the intestate estate. This new law is effective for decedent’s dying after October 1, 2011.

Modification of Wills. Wills may be reformed to conform to the testator’s intent and to achieve tax objectives, respectively. In order to reform the will (even if unambiguous) to conform to the testator’s intent, an interested person must petition the court and prove by clear and convincing evidence that the terms of the will and the testator’s intent were affected by a mistake of law or fact. Also, the court may retroactively modify a will to achieve the testator’s tax objectives upon application of any interested person, but the modification may not be contrary to the testator’s probable intent. These changes to the law provide increased flexibility to beneficiaries and fiduciaries to correct mistakes or make appropriate modifications where circumstances have changed in keeping with the testator’s intent.

Revocation. The statutes regarding fraud, duress, mistake, and undue influence for wills and trusts, including amendments and restatements, now apply to revocation of those documents as well. The validity of a revocable trust or the revocation of all or any part of a trust may not be contested until the trust in some way becomes irrevocable, whether by the settlor’s death or by its terms. The rule for will challenges, preventing challenge until the death of the testator, now also applies to any challenge regarding the revocation of all or a part of any will. When a ward revokes all or part of a trust, there is now a rebuttable presumption that an action by the guardian of their property challenging that revocation is not in the ward’s best interest if the revocation relates solely to a devise. A finding that the action is in the ward’s best interest is necessary for the guardian to bring a trust contest action. Post-death challenge to the trust is available without regard to what was formerly in the best interest of the deceased ward.

Civil Procedure. The law now clarifies that payment by a trustee to persons employed by the trustee from assets of the trust and a determination by the court directing what part of the fees or costs shall be paid are not to be considered taxation of costs or attorney’s fees for purposes of Rule 1.525 of the Florida Rules of Civil Procedure. As a result, the thirty (30) day time requirement to serve a motion does not apply to those items although the time limit now specifically applies to judicial proceedings concerning trusts in general.