Trust Litigation Lawyer in Florida

In Florida, undue influence concerning a trust is defined as over-persuasion, coercion, or artful contrivances that destroy the grantor’s free agency and substitute the influencer’s will for the grantor’s own. Under Florida Statute §736.0406, a trust is void if its creation or amendment is procured by undue influence. To prove this claim, Florida courts apply the common law presumption established in the seminal case, In re Estate of Carpenter. This presumption shifts the burden of proof to the accused if the challenger demonstrates three elements. The accuser must first prove the influencer was a substantial beneficiary under the trust. Second, the influencer must have held a confidential relationship with the grantor, such as a caregiver or attorney. The third and most critical element is demonstrating the influencer was active in the procurement of the trust. Active procurement is evidenced by factors like the beneficiary recommending the drafting attorney, being present at the signing, or isolating the grantor from other beneficiaries. If these three Carpenter elements are established, the beneficiary must then prove that the document was not the product of undue influence. Due to the difficulty of direct proof, this claim is typically proven using circumstantial evidence of the influencer’s actions.

A breach of a trustee’s fiduciary duty in Florida generally involves a violation of the standards set forth in the Florida Trust Code, Chapter 736. One of the most common examples is self-dealing, where a trustee prioritizes their own financial interests over those of the trust’s beneficiaries, a violation of the duty of loyalty (§736.0802). Another frequent breach is the failure to administer the trust as a prudent person would, which includes negligently managing or investing trust assets, causing a loss of value (§736.0804). Failure to provide a required accounting to qualified beneficiaries at least annually is a serious statutory breach that often leads to trustee removal (§736.0813). The commingling of trust funds with a trustee’s personal assets is also strictly prohibited and raises a presumption of wrongdoing (§736.0810). Furthermore, a trustee breaches their duty of impartiality when they favor one beneficiary or class of beneficiaries over another, such as by disproportionately distributing assets (§736.0803). Misappropriation of trust assets, which is outright theft or embezzlement, represents an extreme form of breach of the duty of loyalty. Breaches may also involve the failure to take control of and protect the trust property upon accepting the trusteeship (§736.0809). Ultimately, any action taken in bad faith or with reckless indifference to the beneficiaries’ interests constitutes a breach of the fundamental duty to administer the trust in good faith (§736.0801).

A surcharge action in Florida trust litigation is a lawsuit brought by a beneficiary to hold a trustee personally liable for losses or damages resulting from a breach of fiduciary duty. The primary purpose of the surcharge is to restore the value of the trust property and distributions to what they would have been had the breach not occurred (§736.1002, Fla. Stat.). Surcharge is used when a trustee’s negligent or intentional misconduct, like mismanagement of investments or self-dealing, has financially harmed the trust’s principal. It is often employed in conjunction with a petition to remove the trustee due to a serious breach of trust (§736.0706, Fla. Stat.). Specifically, Florida law dictates the trustee is liable for the greater of the amount required to make the trust whole or the profit the trustee made by reason of the breach. To seek a surcharge, the beneficiary must prove the existence of a fiduciary duty, a breach of that duty, and that the breach was the proximate cause of the damages. Because a surcharge results in a monetary judgment against the trustee in their individual capacity, proper personal service is required. Thus, a surcharge action is the essential legal tool for beneficiaries to recover economic losses caused by a disloyal or careless trustee.

A “no-contest” clause, also known as an in terrorem clause, is a provision in a trust instrument that aims to deter beneficiaries from challenging the validity of the trust itself. Typically, it stipulates that any beneficiary who contests the trust and loses will forfeit their entire inheritance or be penalized. The intent is generally to prevent costly trust litigation and honor the settlor’s final wishes without dispute. However, this clause is not enforceable under current Florida law, a stance codified in the Florida Trust Code. Florida Statute §736.1108(1) explicitly states that a provision in a trust instrument purporting to penalize any interested person for contesting the trust is unenforceable. This statutory prohibition reflects Florida’s public policy that individuals should not be deterred from seeking a judicial determination on the validity of a trust, especially in cases involving fraud or undue influence. Therefore, an interested person can challenge a Florida trust’s validity without fear of automatic disinheritance under this clause.