Is the Beneficiary of a Florida Discretionary Trust Entitled to Notice of an Adoption That Could, Perhaps, Dilute His Potential For Receiving Distributions of the Trust?
What does adoption have to do with Florida probate litigation? How can an adoption affect the beneficiaries of a Florida trust? Can an adoption be deemed a sham if it dilutes a beneficiaries’ potential for receiving distributions from a Palm Beach trust? What do Florida trust lawyers need to know about adoption? If you are involved in a trust matter involving a person who was adopted, you may want to read a March 31, 2017 First District Court of Appeal( DCA) opinion, Edwards v. Maxwell.
Ryan Maxwell was the biological son of John Edwards. Maxwell was also a beneficiary of three discretionary irrevocable trusts that were established by Edward’s great-grandparents. In 2004, Edwards adopted Brindley Kuiper. When Edwards adopted Kuiper, Kuiper became an eligible beneficiary of the three trusts, and was given thousands of dollars from the trusts. In 2014, Maxwell filed a lawsuit, arguing that the adoption should be vacated because, as a beneficiary of the trust, he should have received notice of the adoption. He claimed that he should have received notice because the adoption “diluted his potential for receiving distributions of family trust benefits.” Because he didn’t receive notice in 2004 about the adoption, he was unable to dispute it or attempt to prevent Kuiper from getting trust funds. The trial court agreed with Maxwell, and vacated the final judgment of adoption.
Edwards and Kuiper appealed to the First DCA. The First DCA reversed the trial court’s decision and directed that the final judgment of adoption be reinstated. The First DCA explained that Maxwell lacked standing to set aside the adoption because he wasn’t entitled to notice of the adoption in the first place. Because the trusts are DISCRETIONARY trusts, Maxwell had “no immediate right to funds or control over trust-disbursement decisions.” The trustees of the three trusts have full discretion to determine who gets what and when. Furthermore, Maxwell would not be able to prove that the adoption of Kuiper affected his interest in the trusts because, as a beneficiary of discretionary trusts, Maxwell had no idea what distributions, if any, he would receive. If he didn’t know what he would be receiving, how can he prove that Kuiper’s adoption affected his potential for receiving distributions of the trusts? To read the entire case, click here.