Lefkowitz v. Schwartz

Lefkowitz v. Schwartz, --- So.3d --- (Fla. 5th DCA 2020)

This case revisits the applicability of the "trust exception" to creditors claims in a probate proceeding. Here, the creditor's claim was based upon money lent by the creditor to the decedent, which the decedent promised to repay upon the sale of certain real property. The real property was apparently sold prior to the decedent's death but the money was not repaid. Upon the decedent's death, the creditor filed a creditor's claim and in her independent action, she asked the trial court to find that the sale proceeds were held in a constructive trust for her benefit. On appeal, the Court reversed, holding that the "trust exception" did not apply, and that the creditor's claim was an ordinary creditor's claim and the proceeds of the sale were assets of the estate subject to Florida statutes governing the priority of claims.

The "trust exception" was based on the idea that assets held in trust should not be part of the decedent's estate, and was applied in cases where claimants asserted an equitable basis for ownership of certain property of the decedent. The exception is now limited to "those situations where the decedent clearly held the property on behalf of the actual owner by way of either an express trust or some other clearly defined means." Johnson v. Townsend, 259 So.3d 851, 858 (Fla. 4th DCA 2018). The Court held that the exception did not apply here because the creditor was unquestionably pursuing a liability of the decedent that arose during his lifetime, for a debt owed. This made her a creditor of the decedent's estate, subject to the legislatively-imposed distribution scheme for creditors of an estate. The trial court should not have given her priority over claims of the same class to which her claim belonged by imposing a constructive trust based on conduct that occurred during the decedent's lifetime.


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