Show Original

Failure to Follow Signing Formalities Can Sink an Estate Plan

Published: June 6th, 2017

By: Brad Gould

Wills and trusts must be executed with certain formalities. If those formalities are not strictly complied with by the parties, the documents may be disregarded. In the case of Kelly vs. Lindenau, a grantor’s failure to have two witnesses sign a trust amendment resulted in the invalidity of the trust amendment. The grantor, Ralph Falkenthal, a Florida resident, established a revocable trust while he was a resident of Illinois. After he moved to Florida, Mr. Falkenthal had his Illinois attorney prepare the trust amendment that changed who would receive certain assets. Apparently, Mr. Falkenthal signed the amendment in the presence of two witnesses, but only one witness actually signed the amendment.

In an action to reform the trust under Section 736.0415, Florida Statutes, the trial court approved a reformation which gave effect to the amendment as if it were properly signed. In overturning the decision, the Second District Court of Appeals noted that § 736.0403(2)(b) prohibited such a reformation because the trust amendment was not executed in accordance with the formalities required for executions of wills in the state. It did not matter that the trust was an Illinois revocable trust as the testamentary aspects of a revocable trust executed by a Florida resident, at the time of execution, must be signed with the formalities of a will under Florida law. This meant that both witnesses needed to sign the trust amendment.

Since the trust amendment was invalidly signed, the appeals court held that the attempt to reform the trust to include the invalid portions of the amendment was outside the scope of the reformation statute. This case is a reminder that execution of wills and trusts in Florida must be strictly complied with in order for them to be valid.

About the Author:
Brad Gould practices in Dean Mead’s Fort Pierce office located in St. Lucie County, Florida. His practice covers the areas of federal income, estate, and gift tax law and business succession planning. He represents businesses and business owners in all types of business and tax matters, including choice of entity, mergers and acquisitions, reorganizations, and other general business matters. Mr. Gould represents individuals, businesses and fiduciaries before the IRS and also counsels clients on estate and wealth preservation planning matters. Additionally, he represents trustees, personal representatives and family members in controversies regarding wills, trusts and estates. Mr. Gould is also a Certified Public Accountant. He may be reached at bgould@deanmead.com.