Fintak v. Fintak, 120 So.3d 177, 2013 WL 4483101 (Fla. 2d DCA 2013)
This case involved a challenge to a decedent's self-settled irrevocable trust. The trust was established during the decedent's life, was funded with the decedent's money and during his life, the decedent was the sole beneficiary. On his death, the trust was to be divided into separate shares for the decedent's children, and made no provisions for the decedent's life. The decedent and two of his sons were named as the initial trustees of the trust.
Before he passed away, the decedent sought to challenge the trust but unfortunately he died before the litigation was concluded, and his wife was substituted as the plaintiff as his personal representative. The trial court granted summary judgment in favor of the trustees, because the decedent failed to renounce the benefits he received under the trust and because his wife took inconsistent positions in the probate proceeding and the trust litigation.
The Appellate Court disagreed with the trial court on all grounds and gave four reasons why the summary judgment was improper:
(1) The Renunciation Rule
Typically, "one who receives and retains a gift under a ... will or other instrument is estopped to contest the validity of the instrument under which he derives his interest. Barnett Nat'l Bank of Jacksonville v Murrey, 49 So.2d 535, 536 (Fla. 1950). However, all of the cases decided under this "renunciation rule" have involved the receipt of benefits from an instrument executed by a third party. Here, where the decedent funded the trust with his own assets, the Court held that he was not required to renounce the benefits from the trust as a condition precedent to instituting a challenge to the validity of the trust because there can be no gift or devise to a settlor/beneficiary of a self-settled trust because his interest does not derive from the trust itself.
(2) Estoppel by Acceptance of Benefits
Similarly, the doctrine of estoppel holds "that a person should not be permitted to unfairly assert, assume or maintain inconsistent positions." Head v. Lane, 495 So.2d 821, 824 (Fla. 4th DCA 1986). The Court held that an individual cannot be estopped from challenging an instrument by accepting that which he is already entitled to receive regardless of whether the instrument is overthrown.
Interestingly, the Court's arguments for rejecting the renunciation rule and the estoppel arguments seemed to give no credence to the idea that a self-settled irrevocable trust for the benefit of the settlor is anything but the settlor's own personal piggy bank.
(3) Estoppel by Demand for Performance
The trial court also held that since the decedent made demands for money from the trust and even executed a codicil exercising a power of appointment granted to him in the trust, he should be barred from challenging the trust. The Appellate Court held that like the rule allowing a party to plead in the alternative during litigation, a party may also take inconsistent actions in his own affairs to "hedge his bets," so long as that action does not prejudice another party.
(4) Judicial Estoppel
The decedent's wife listed the trust as a beneficiary of his estate on her initial inventory (filed outside of Florida). The Court did not view this as taking an inconsistent legal position or an admission that the trust was valid.