Monday, December 8, 2014

Rudolph v. Rosecan

Rudolph v. Rosecan154 So.3d 381 (Fla. 4th DCA 2014), 2014 WL 6674749

This decision deals with who is considered an "interested person" in a guardianship proceeding for purposes of objecting to a guardian's annual accounting.  Here, a father was appointed plenary guardian of his adult autistic son's person and property.  A parenting plan was incorporated into the order appointing the father as guardian, and that parenting plan provided for the father and mother to have shared decision making authority and information sharing rights with regard to their son.  It expressly provided that the father had ultimate authority to make decisions about his son's person, but did not address financial decisions.

The father voluntarily provided the mother with copies of his annual guardianship accountings over the years, but eventually sought a court order declaring that the mother was not an interested person for purposes of the annual accounting.  The trial court agreed, because the mother had no financial rights or obligations with regard to the son, so she would not be affected by the outcome of the guardianship proceeding.

The mother argued that she was an interested person by virtue of the parenting plan which allowed her to be involved in major decisions regarding her son.  The Court disagreed.  Under F.S. 744.3701(1), the only people who can inspect a guardianship report are the court, the clerk, the clerk's representative, the guardian, the guardian's attorney, the ward and the ward's attorney.  While F.S. 744.367(4) allows an "interested person" to object to the report, the Court disagreed with the mother that she was an interested person in this proceeding.  It held that the concept of an "interested person" is fluid and varies with the facts of the case. A person's status as an "interested person" is dependent upon whether the person would be affected by the outcome of the particular proceedings.  Being "next of kin" does not confer "interested person" status. 

Since the parenting plan did not give the mother any rights relating to financial decisions,the Court held that she was not an "interested person" with standing to object to the annual accounting. 

Friday, December 5, 2014

Minassian v. Rachins

Minassian v. Rachins, 152 So.3d 719 (Fla. 4th DCA 2014), 2014 WL 6775269

This case turned on the ability of a trust protector to modify a trust instrument to effectuate the settlor's intent.  At the settlor's death, the trust at issue provided for a family trust for the benefit of the settlor's wife.  Upon the wife's death, the family trust terminated and the trust referred to the establishment of separate shares for the decedent's children.  

The children filed a complaint against the wife, as trustee of the family trust, for breach of trust.  She responded by moving to dismiss their complaint because they lacked standing, since they were not beneficiaries of the family trust.  She took the position that upon her death, the family trust terminated, and new trusts were created, and thus the children were not beneficiaries of the family trust during her life.  The trial court disagreed, finding that the use of the word "shares" prevented the court from concluding that new trusts were created.

After the trial court denied her motion, the wife appointed a trust protector pursuant to the terms of the trust.  The trust authorized the trust protector to modify or amend the trust to correct ambiguities or correct drafting errors that defeated the settlor's intent.  In doing so, the trust protector was directed to determine the settlor's intent, consider the interests of current and future beneficiaries, and to amend only if the amendment will benefit the beneficiaries as a group or further his probable wishes.

The trust protector purported to amend the trust to create a new trust after the wife's death, and the children filed a supplemental complaint challenging his actions.  The trial court held that the trust protector's amendment was improper because it did not benefit the beneficiaries as a group or further the settlor's probable wishes.

Upon review, the Court first determined that the trust protector provision in the trust was valid.  It rejected the children's argument that F.S. 736.0808(3), which provides that "The terms of a trust confer on a[n]...other person  a power to direct the modification or termination of the trust," contradicts with the black letter common law that a trustee can not delegate discretionary powers to another.  The Court rejected this argument because (a) it was the settlor and not the trustee who was delegating the power to modify to a third person and (b) F.S. 736.0808 supplements the common and law and to the extent it conflicts with the common law, it overrides it.  The Court also rejected the children's argument that F.S. 736.0410-736.04115 and 736.0412 provide the exclusive means for modifying a trust in Florida.  If that were the case, it explained, then F.S. 736.0808 would have no effect.  Thus, to read the statutes in harmony with each other, the Court concluded that the Florida Statutes do allow a trust protector to modify the terms of a trust.

The Court next considered whether the trust instrument was ambiguous and therefore able to be amended by the trust protector.  The Court held that the provisions of the trust which provided that the family trust would terminate and that it was not the intent of the settlor to create a common trust for his wife and children conflicted with the provisions of the trust  creating "shares" for the children, since it was unclear whether the term "share" created a new trust.  Because the Court found the trust to be ambiguous, it determined it was allowed to consider extrinsic evidence of the settlor's intent.  

Since it was clear from the extrinsic evidence that the settlor clearly intended to create multiple trusts for the very purpose of preventing his children from challenging the manner in which his wife spent the money during her lifetime, the Court held that the trust protector's amendments were made to effectuate the settlor's intent and were within his powers under the instrument.