Tuesday, November 25, 2014

Katke v. Bersche

Katke v. Bersche, 161 So.3d 574 (Fla. 5th DCA 2014), 2014 WL 6488688

In this contested guardianship, there were two petitions filed to determine the alleged incapacitated person's incapacity.  First, the AIP's daughter filed her petition and was appointed as ETG.  She subsequently resigned as ETG and an unrelated professional guardian applied and was appointed as ETG.  The AIP filed an emergency motion to set aside the order appointing both her daughter and the professional guardian as her ETG, which the trial court granted based on lack of service and notice to the AIP.

The AIP next filed an emergency motion to dismiss her daughter's petition.  The daughter withdrew her petition.  Before the trial court heard the motion to dismiss, the professional guardian filed her petition in the same case number as the  daughter.  The AIP filed a motion to strike that petition and sought a writ of prohibition after the court determined that it could proceed on the professional guardian's petition.

The Court held that once the daughter withdrew her petition, the court lost jurisdiction over the case, and could not find that the professional guardian had standing to file her petition in the same case.  As a result, the write of prohibition was a proper claim for relief and was granted.

White v. Guardianship of Lubin

White v. Guardianship of Lubin, 150 So.3d 1256 (Fla. 2d DCA 2014), 2014 WL 6497820

Under F.S. 744.108(1), a guardian is entitled to a reasonable fee for their services rendered on behalf of the ward.  A trial court deciding whether to grant fees has discretion, which "includes the ability to rely on common sense and experience to adjust the time claimed for common or routine tasks," and "the discretion to deduct time claimed by a guardian for noncore, delegable tasks that are better performed by others and to deduct excess time claimed due to the guardian's own inefficiency."   In re Guardianship of Shell, 978 So.2d 885, 889 (Fla. 2d DCA 2008).

Here, the trial court disallowed a professional guardian's fees for time she spent reviewing and paying invoices for the ward.  The Court reversed, holding that since it is part of the guardian's duties to examine, approve and pay the ward's bills, she must be paid for the work she was appointed to perform and is required by law to perform.  The Court noted that bill-paying duties are substantial, and should not be disregarded as "trivial busy-work."

Tuesday, November 18, 2014

Stone v. Stone

Stone v. Stone, 157 So.3d 295 (2014), 2014 WL 5834826

Another homestead decision!  This time, the Court made two interesting holdings concerning homestead, QPRTs and a spouse's ability to waive homestead rights: (1) When a homeowner transfers property to a QPRT pursuant to F.S. 732.4017, and the property reverts back to the homeowner's estate because the homeowner failed to survive the term of the QPRT, a subsequent disposition of the property pursuant to the homeowner's will is a devise, subject to Florida's constitutional homestead devise restrictions and (2) The joinder of the homeowner's spouse on a deed transferring homestead property will constitute a valid waiver of homestead rights even if the deed contains no waiver language.

Like the last homestead decision, it is helpful to map out the transfers which occurred:
(1)  Husband and wife own homestead property.
(2)  Husband and wife execute warranty deed conveying property to themselves as tenants in common, each as to an undivided one-half interest.
(3)  Husband executes QPRT and executes warranty deed conveying his one-half tenancy in common interest in the property to husband and wife as co-trustees of the QPRT.
(4)  Wife executes QPRT and executes warranty deed conveying her one-half tenancy in common interest in the property (wife's one-half interest was not the subject of the appeal).

The husband died before the term of the QPRT expired, and thus his one-half interest in the property reverted to his estate.  Pursuant to the terms of his estate plan, the property was held in trust for the wife's benefit for her life, and upon the wife's death passed to his daughter.  

The Court held that there were two distinct transfers: (1) the transfer of the husband's interest in the property to the QPRT and (2) the transfer of his interest in the property to the daughter.  It held that the transfer to the QPRT was not a devise but the second transfer should have been treated as devise.

The transfer to the QPRT was not considered a devise because pursuant to F.S. 732.4017(1), an inter vivos transfer of homestead property to a trust will not be treated as a devise so long as the settlor does not retain a power to revest the property in himself.  The Court found that the fact that the husband retained an interest in the property in the form of the possibility of a reverter (in the event that he did not survive the term of the QPRT) does not put the QPRT outside the parameters of F.S. 732.4017.  It also noted that F.S. 732.4017 can be applied retroactively, since the statute expressly states that it was intended to clarify existing law.

The transfer of the husband's interest in the property to his daughter after his death was considered a devise because the husband did not outlive the term of the QPRT and thus the transfer of the property was not completed pursuant to the terms of the trust as permitted by F.S. 732.4017.  Since the QPRT did not ultimately control the disposition of the property at the time of the husband's death, and the property instead reverted back to the husband's estate and passed to the daughter through the terms of his will, the Court held that the transfer was a devise, subject to the constitutional homestead devise restrictions.

Despite finding that the transfer to the daughter was a devise subject to the constitutional homestead devise restrictions, the Court also held that the wife had waived her homestead rights for the purpose of those restrictions and therefore the disposition of the residence was not in violation of those restrictions.  The fact that she continued to claim a homestead exemption from ad valorem taxation did not mean that she did not intend to waive her constitutional homestead rights for purposes of devise.

Thus, the Court held that since there were no surviving minor children, and the wife had waived her homestead rights, the husband was free to devise his interest in the homestead property without any constitutional restriction, and thus the devise to the daughter after his death was valid.

For an in depth discussion of the waiver issue, please see the discussion of this decision on Rubin on Tax.

Wednesday, November 12, 2014

Corya v. Sanders

Corya v. Sanders, 155 So.3d 1279 (Fla. 4th DCA 2014), 2014 WL 5617045

This case centered around three trust accounting issues: (1) whether the affirmative defense of statutory laches limited the years a beneficiary was entitled to an annual accounting from certain trusts, (2) the interpretation of statutory provisions deciding the starting date for the annual accountings and (3) the interpretation of case law deciding the starting date for the annual accountings.

The case deals with four irrevocable trusts which were in effect for decades before one of their beneficiaries filed a lawsuit against the trustees.  Before the lawsuit was filed, the trustees had never prepared accountings for any of the trusts.

The trustees attempted to argue that there was no duty to account annually prior to July 1, 2007, when F.S. 736.0813 was passed.  The Court found that the prior statute, F.S. 737.303 also created a duty to account for an irrevocable trust, based on the language which read, "A beneficiary is entitled to a statement of the accounts of the trust annually...," and the fact that the current definition of "qualified beneficiaries" is virtually the same as the definition of "beneficiary" and "vested beneficiary" under the prior laws.  Thus, the Court held that there was a statutory duty to provide a beneficiary of an irrevocable trust with accountings before July 1, 2007.

The Court then addressed whether the affirmative defense of statutory laches limited the years the beneficiary was entitled to an annual accounting from the trusts, and held that statutory laches under F.S. 95.11(6) limits the right to an accounting, where no accounting has been done, to no more than four years before filing an action for an accounting against the trustee of an irrevocable trust.  The Court disagreed with the beneficiary's position that laches did not apply because he did not have actual knowledge that he was entitled to accountings.  It held that knowledge of the law is not an element to be proven to establish entitlement to an accounting by a trustee, and his lack of knowledge of the law had nothing to do with his knowledge that the accountings were not being given to him.  

Lastly, the Court considered how far back the trustees should be required to account.  The trial court had found that the accountings should go all the way back to when the trustees became accountable.  The Court disagreed both because of the defense of statutory laches, discussed above, and because F.S. 736.08135 does not require accountings prior to January 1, 2003.  The Court did not agree that F.S. 736.08135(1), which states that trust accountings should go back to the "date on which the trustee became accountable" expressed a legislative intent that if an accounting had never been done, a trustee's first accounting should go back to the date the trustee assumed his fiduciary duties.  

The Court also noted that the Mesler v. Holly decision, cited by the trial court, is not authority for requiring a trustee to render an accounting for trusts from the date they assumed their duties as trustee.  

Monday, November 10, 2014

Kozinski v. Stabenow

Kozinski v. Stabenow, 152 So.3d 650 (2014), 2014 WL 5611595

This case dealt with the issue of whether a petition to review a personal representative's compensation and to enter such surcharge or disgorgement orders as were warranted under F.S. 733.6175 (proceedings for review of employment of agents and compensation of personal representatives and employees of the estate) and F.S. 736.0206 (proceedings for review of employment of agents and review of compensation of trustee and employees of trust) was an adversary proceeding which required formal notice in order to obtain personal jurisdiction over the personal representative. Appellees argued that a petition for review of fees under F.S. 733.6175 or 736.0206 seeking an immediate refund of money to the probate or trust estate does not initiate an adversary proceeding subject to the notice requirements.  

The Court considered whether such a proceeding is considered an adversary proceeding under the Florida Probate Rules, and found that the determination of whether it is an adversary proceeding depends on whether a "refund" under F.S. 733.6175 or 736.0206 is a "surcharge."  It then found that Florida case law clearly holds that a fee dispute under F.S. 733.6175 is a surcharge proceeding.

The Court ultimately held that a proceeding seeking an order for judgment imposing a refund or surcharge against a fiduciary or fiduciary's agent, individually, and the immediate return of money to a trust, probate, or guardianship estate as a result of a breach of fiduciary duty (such as charging excessive fees) is tantamount to a judgment for damages, requiring personal service on the fiduciary as an individual and not in any representative capacity.