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Can a Florida Personal Representative or Trustee be prevented (estopped) from challenging the Estate Plan?

Posted May 19, 2018 in Florida Probate Litigation, Florida Trust Litigation

Florida Probate and Trust Litigation Blog 

Can a Florida Personal Representative or Trustee be prevented (estopped) from challenging the Estate Plan?

What happens when a person accepts their role as Personal Representative or Trustee, only to find out later that the instrument should be invalidated. Can they bring a cause of action challenging the Will or Trust? Does their acceptance under the documents prevent them? We briefly explore the Florida law on this Probate and Trust Litigation issue. 

Generally a Trustee/Personal Representative is Not Allowed to Take a Contrary Position to the Trust.

First, it goes without saying that a party cannot sue themselves. So, a Personal Representative, who got their authority and power to act under "Will A" cannot sue to challenge "Will A" in their role as personal representative. The same is generally true for a Trustee. 

The Florida Trust Code states "Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries." Fla. Stat. § 736.0801. Additionally, the Florida Trust Code states "A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust." Fla. Stat. § 736.0811.

A well respected legal treatise on the subject of Trusts, Bogert's Trusts and Trustees takes the general position:

"The trustee has a duty not to attack the trust or set up a claim that it is in whole or in part invalid, or to maintain that its creation was procured in an illegal manner or for an illegal purpose." Bogert's Trusts and Trustees §581 (2017).

There are some lingering old Florida cases that have taken a similar position, but found that the party was precluded based on specific factual circumstances. For example, in Florida National Bank Trust Co. of Miami v. Brown, 47 So. 2d 748 (Fla. 1949), the Florida Supreme Court found that a Trustee should be precluded.

Initially she had two courses open to her. She could have accepted the benefits and the trusteeship under the will after filing it for probate as she did, or she might have repudiated the will or at least renounced the trust and thereafter possibly have sought foreclosure of the mortgage. She could not do both. She made her election and will not now, in equity, be permitted to assume two inconsistent positions or by her own action in bringing the instant suit voluntarily renounce her trusteeship. Nor will she, after having assumed the position of trustee, be permitted to destroy the trust property which as trustee she is duty bound to protect in the interest of all the cestui que trustent including the remaindermen. 

In Florida National Bank, the beneficiary improperly received a promissory note for past consideration, which formed the primary basis for the Court denying the relief. And, although she did accept her role as trustee, the court focused on her election to receive the benefits of the estate and trust—which did not happen here. More importantly, the Court noted that she failed to renounce her interest in the trust and suggested that, had she done so, she might have been able to seek foreclosure of the mortgage.

Subsequent cases put that ruling in doubt.  A year after Florida National Bank, the Florida Supreme Court affirmed its suggestion that a renouncement of the benefit eliminates the estoppel argument. Barnett Nat. Bank of Jacksonville v. Murrey, 49 So. 2d 535, 536 (Fla. 1950). 

So, there is at least some authority for the idea that accepting the role as Trustee or Personal Representative should prevent a party from later challenging the instrument. 

More Recent Florida Cases allow a Trustee/Personal Representative to Sue in their Individual Capacity.

Florida courts consider a party in his or her individual capacity as distinct from a party in his or her representative capacity. The Second District Court of Appeal recently reaffirmed that point in Grasso v. Grasso, 143 So. 3d 1050 (Fla. 2d DCA 2014).

A well-known Florida case, which is directly on point and has clarified and settled this issue for more than thirty (30) years, is In re Lewis’ Estate, 411 So. 2d 368 (Fla. 4th DCA 1982). In Lewis, a widow accepted her appointment as personal representative of her late husband’s estate. Despite accepting her role and acting as the personal representative, the widow later filed a petition to contest the will she was administering. Worse yet, she filed the petition as personal representative. The trial court dismissed the petition. The Fourth DCA reversed and held that, although the widow could not contest the will in her capacity as personal representative, she had standing to contest the will in her individual capacity as surviving the spouse and as a beneficiary. So, if an acting personal representative is not estopped from contesting a will in her individual capacity, the same is true of a trustee contesting a trust in her individual capacity.

And, as recently as 2013, the Second DCA addressed an estoppel argument in a similar context, and ruled that estoppel did not apply to an undue influence claim even though the plaintiff 1) accepted and received disbursements from the trust; 2) demanded performance by the trust; and, 3) exercised of a power of appointment under the trust. Fintak v. Fintak, 120 So. 3d 177, 185 (Fla. 2d DCA 2013). Each of these actions are tacitly predicated on an acknowledgement that the trust is valid, yet the Second DCA held taking an inconsistent action by contesting the trust at the same time was akin to pleading in the alternative; and that plaintiffs were allowed to hedge their bets. The Second DCA reversed the trial court’s granting of summary judgment—not a motion to dismiss as you have filed here—since estoppel is more appropriately raised as an affirmative defense.  

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PersanteZuroweste is a Florida law firm that handles varieties of Florida Probate and Trust Litigation including causes of action relating to Florida's Probate and Trust Code. We bring actions contesting and defending the Estate Plan Disputes. If you believe that you may need legal assistance regarding a Florida litigation matter, please contact us at (727) 796-7666.

About PersanteZuroweste:

PersanteZuroweste has established a reputation as prominent trial lawyers serving clients throughout Florida. Our office is conveniently located to the Clearwater, St. Petersburg, and Tampa Bay communities.