Dennis v. Kline

Dennis v. Kline, 3d DCA, June 19, 2013, 120 So. 3d. 11, 2013 WL 3014115

This case involves a beneficiary of a trust who adopted a 27-year old woman, which impacted who would inherit under a trust created by the beneficiary's father.  In simple terms, the trust involved both a Marital Trust and a Family Trust, which was further divided into Family Trust A and Family Trust B.  While Family Trust B granted the settlor's children the ability to appoint the assets in his or her trust share, Family Trust A constrained the distribution of each child's share to the Settlor's "issue."  The Trust (and the Settlor's will) defined "issue" as "lineal descendants forever," with the provision that "words of relationship in any degree includ[e] legally adopted persons."  

One of the beneficiary's siblings sought a declaratory judgment that would construe the Trust to exclude adult adoptees from becoming qualified beneficiaries as "living issue,” or in the alternative, judicial modification of the Trust, which would exclude the adoptee from taking by conforming the Trust to conform with the Settlor's intent to keep Family Trust A's assets within the family bloodlines.  The trial court granted the sibling's motion for summary judgment and modified the trust to exclude the adult adoptee because including her would "defeat or substantially impair the accomplishment of a material purpose" of the Trust.

The Appeals Court dismissed the sibling's public policy argument against an adult adoptee on appeal, citing the fact that the draftsmen of Florida's Probate Code did not adopt the Uniform Probate Code provisions excluding adult adoptees in certain situations.

The Appellate Court then considered whether the trial court should have modified the irrevocable trust.  Under F.S. 736.04113, a court can modify the terms of an irrevocable trust where, "[b]ecause of circumstances not anticipated by the settlor, compliance with the terms of the trust would defeat or substantially impair the accomplishment of a material purpose of the trust."  The court pointed to 736.05113(3)(A), which provides that the court should consider, "the terms and purposes of the trust, the facts and circumstances surrounding the creation of the trust, and extrinsic evidence relevant to the proposed modification," and held that since the Trust terms are unambiguous about "adopted" persons being treated as beneficiaries under the Trust,  any question of the Settlor's intent to exclude adult adoptions is a factual issue that was inappropriate for resolution on summary judgment.  The Court reversed the Trial Court's judgment and remanded to resolve this, among other, issues.


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