Conflicting Documents Create a Tug of War in Florida Probate Law

Uncategorized • Feb 11, 2015

What will a Court do if you promise the same property to multiple people in different documents? It depends but a recent Fourth District Court of Appeals case sheds some light on the analysis in a rare instance: where a trust conflicts with an LLC agreement (a type of contract).

To sum up the case briefly:

Bertram Blechman owed 50% of an LLC and passed away
Under the terms of the LLC Agreement (which had been last amended within six months of his death) his rights in the company would immediately transfer to his two adult sons
Blechman also had drafted a revocable trust that gave the property to his girlfriend
A claim was initiated in Court to determine the proper owner of the LLC
The probate court who likely had more experience with revocable trusts than LLC Agreements (which tend to not have testator wishes in them) sided with the girlfriend finding the trust was superior.
The Appellate Court reversed holding the contract was superior. But why?

The Court noted well established precedent that the contract was superior absent extreme circumstances. This is because a revocable trust can be changed until the testator dies, the rights do not transfer until that date. The LLC agreement on the other hand, was a contract and created legally transferred rights upon the date the contract was signed.

In other words, the sons had been granted the rights to the company when the contract was executed, the property was never in trust to be transferred to the decedent’s girlfriend.

This only negated the terms of the trust to the point that they were in contradiction with the LLC agreement. The Court did not completely invalidate the trust in the case of Blechman v. Blechman.

This was a strange battle, an LLC agreement versus a revocable trust but its not the first time this has happened. Estate planning requires ensuring that nothing is double-gifted. In this case the amount in controversy amounted to over ninety thousand dollars, and the dispute could have been avoided if the testator / decedent had properly managed his testamentary documents/estate plan.