Back in September of 2013, Florida’s 2nd District Court of Appeal issued its opinion in the Searle v. Bent case, 137 So. 3d 1028 (Fla. 2nd DCA, 2013). This involved a guardianship of an adult, actually someone’s mother, not a minor child. Many people think of a guardianship as being a legal proceeding for a minor, but that is certainly not always the case. In Florida, guardianships for adults are very common. And, for good or for ill, so is guardianship litigation.
- At that time, this guardianship appeals case was met with some questions by elder law attorneys, and some frustration by those of us who litigate contested guardianships throughout Florida.
- Could you really have a court ignore – ignore !! – an alleged incapacitated person’s estate plan?
- Isn’t one of the purposes of having a durable power of attorney, and a revocable trust, to manage your property if you are not able to do so yourself? Like, if you are incapacitated?
- Can one thwart a long standing, consistent, estate plan merely by someone filing a verified statement alleging a good faith belief that the alleged incapacitated person’s estate plan was not valid?
- This appellate opinion left many guardianship litigators with more questions than guidance.
- Some elder law attorneys suggested that ignoring a POA or revocable trust “in favor” of a verified statement was like having a prisoner run the prison or the house pet ruling the roost.
- Probate lawyers wondered if this verified statement would be mis-used when family members “fought” for control of an aging parent or spouse in guardianship court.
- Wouldn’t 2nd spouses or adult children from a prior relationship file 744.331 Guardianship Code verified statements when they were adverse to, or against, other family members—and the estate plan did not favor them, or dis-inherited them? Or when the POA named someone else as attorney in fact?
- Well, most guardianship attorneys would probably tell you that the 2nd DCA did not ignore the AIP’s estate plan, but rather focused on the language of the Florida Guardianship Code.
- Florida Statute 744.331 is probably the single most important guardianship law or statute regarding incapacity. Why?
- 744.331 is your legal roadmap, telling the parties, and the court, just about everything they need to know, and do, surrounding a finding of incapacity. Here is a link to Florida Guardianship Law 744.331: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0744/Sections/0744.331.html
- Subsection (6)(f) of 744.331 reveals two important things. First, it permits an “interested person” to file a verified statement that (1) he or she has a good faith belief that the AIP’s trust or power of attorney is invalid— AND— (2) a reasonable factual basis for that belief. (2 part test)
- Now, whether someone is an interested person in the guardianship matter is an entirely different subject. (See the Hayes v. Guardianship of Thompson case from Florida’s Supreme Court, or, more recently, the Zelman case from Palm Beach’s 4th District Court of Appeal. Zelman v. Zelman, 170 So. 3d 838 (Fla. 4th DCA, 2015).
- Here is the opinion in Hayes v. Guardianship of Thompson, where the Florida Supreme Court discusses legal standing and how we define an “interested person” for guardianship matters: Hayes v. Guardianship of Thompson, 952 So. 2d 498 (Fla. 2006, rehear. den Mach 14, 2007) http://www.floridasupremecourt.org/decisions/2006/sc05-675.pdf
- Here is a copy of the Zelman case: http://4dca.org/opinions/July%202015/07-01-15/4D14-1858.co.op.pdf.
- Secondly, this statute in our Probate Code, or Guardianship Code, instructs the guardianship court to NOT deem a revocable trust or POA as an alternative to the appointment of a guardian. (I won’t go into the legal analysis of how courts are supposed to interpret the plain language of a statute, or what the standard of review is upon appeal.)
- Wow.
- Can a person who files a verified statement bring the wheels of a Florida guardianship to a halt? Even in the face of a durable power of attorney and revocable or living trust?
- Can you get a guardian appointed when there is alternative? Just like that? Well, no. But …………….an interested person who files a Florida 744.331(6)(f) Verified Statement can veer that guardianship case off course. How?
- Well, the probate court is instructed, in essence, not to consider the estate plan or living trust or POA as an alternative—at least at that hearing on incapacity (what probate litigation law firms call the “adjudicatory hearing.” )
- So, conceivably, a one sentence affidavit, signed under the pains and penalties of perjury, can totally prohibit the court from considering whether an existing estate plan –even if it was in place, for, say, 10 years ! – is an alternative, or a lesser restrictive alternative, to a guardianship.
- Wow.
- Probate litigators got heartburn.
- ….So, too, did elder law attorneys who have practices where they represent aging clients.
- Won’t everyone who is “fighting” the successor trustee of a revocable trust, and the named attorney in fact under a durable power of attorney, simply file a verified statement to get a guardian and have the court ignore the trust and POA?
- And won’t “bad” legal actors and interested persons simply ignore the good faith and factual basis requirements and file a verified statement in bad faith, as a litigation tactic? Probably.
- Now, the rest of 744.331(6)(h) does say that the court has some power to determine that certain authority under a durable power of attorney is to remain. What? A bit of a statutory contradiction? Indeed. OK: ignore the POA if there is a verified statement….but wait !….OK you can give the attorney in fact some power…a little. What?
- What can a probate lawyer do?
- Well, you can counter the verified statement with one of your own. You can ask the court to schedule the adjudicatory hearing –the trial on the petition to determine incapacity—for a day or two. Why?
- If you are arguing that the estate plan, the durable POA, and the revocable trust, are valid, and a lesser restrictive alternative to a guardianship, then bring in your witnesses and documents to impeach or thwart the contents of the verified statement. (But wait… aren’t you really just trying two things: whether the AIP has capacity or not, and whether a guardian is needed—whether the good faith belief and reasonable factual basis 2 part test has been met, or not?)
- Rebut the “good faith” belief in the verified statement. Depose the person who made or filed the affidavit (affiant) prior to the guardianship trial.
- Have the AIP’s estate planning attorney testify that the rev trust and the POA are valid.
- If you represent the POA, the attorney in fact, or you want the POA to be effective, put on your case and ask for relief which will permit the court to grant authority to the attorney in fact under 744.331(6)(f)(2). Ask for relief which will properly, procedurally, and legally, do an end-run around 744.331(6)(h)’s verified statement.
- Do what good trial lawyers do: analyze, counter and litigate. Advocate.
- In the Searle v. Bent case, a daughter, Bent, brought a guardianship proceeding over her mother, Searle, who was found incapacitated by the probate court. This finding was after an evidentiary hearing and the court receiving testimony. An individual and a trust company were appointed guardians of mom’s person and her property. This guardianship appeal dealt with the mom’s argument that the trial court did not consider her estate plan as a lesser restrictive alternative.
- Every guardianship law firm in Florida knows that if a person is incapacitated, but has a lesser restrictive alternative to a guardianship which adequately addresses the needs of the AIP, then the Court is required to consider that. In fact, there is no need for a guardianship if the AIP has a complete estate plan.
- Why have a guardianship when the AIP made the decision of who would be in charge of his or her life, person and property already—when he or she was competent?
- Most trial lawyers who litigate guardian matters throughout Florida will tell you that, in most cases, the Ward’s estate plan is given credence and effect.
- It’s, at least, more than considered. It often rules the day. I’ve had judges who are ready to dissolve an ex-parte “emergency” appointment of temporary guardian by simply handing the AIP’s durable power of attorney or revocable trust to the court.
- We use POA’s and rev trusts all the time in guardianship settings, even when family members don’t agree.
- You use the POA to identify, marshal, gather, safeguard, account for, and protect, the Ward’s assets — and then transfer them to his or her revocable trust, where the successor trustee will manage and protect them for the use and benefit of the Ward (according to the Ward’s revocable or living trust.)
- So, what went “wrong” in Searle v. Bent? Well, perhaps nothing, went….wrong.
- In that case, the daughter, Bent, filed a Verified Statement by Interested Person Pursuant to F.S. 744.331(6)(f). In that affidavit, the daughter claimed that mom’s estate planning documents executed after December of 2006 were invalid due to lack of mental capacity or undue influence.
- The Verified Statement had numerous allegations of mom’s mental and physical condition, as well as findings by medical experts regarding mom’s mental capacity and need for a guardian. (Hearsay within the hearsay verified statement?)
- The court found that a reasonable factual basis existed to believe that mom’s trust, trust amendments, and durable POA were invalid and not an alternative to a guardianship.
- Is this res judicata and collateral estoppel?
- Can you later have a full blown trial on the validity of the documents? What if mom passes? Can you then, post-death, attempt to have a court declare that the documents are actually valid? Same parties? Probably not. Maybe, maybe not. Hmm… that creates some interesting procedural and evidentiary issues for the probate or estate if/when mom passes away.
- What does this all mean?
- This all means that the adjudicatory hearing is SUPER important, perhaps more important than some family members want to believe. Or their probate lawyers. Why?
- Because it may prevent that issue from being re-litigated. Maybe not.
- Then again, the devil is in the details. What did the order say? If the order only said that a good faith or reasonable factual basis exists, that’s one thing. If the order made specific findings of fact, then that could be fatal to family members who participated in the guardianship proceeding and who later would want, or expect, to try to have mom’s estate planning documents given effect, such as after mom passes.
- Is this all academic? Perhaps so, but this is what gives probate litigation law firms pause to think. To ponder and consider.
- Evidently, the probate court order in this guardianship matter found only that the allegations in the verified statement called the estate planning documents into question.
- The 2nd DCA then moves down the legal line to hold that the trial court, the probate court, was then prohibited from considering the documents as an alternative to the guardianship. Can’t ….even….. consider….
- Regarding claim and issue preclusion: perhaps the angst is for naught. The court, in this case at least, held that not only is the court not required to determine the validity of the challenged documents, it rendered no opinion on their validity. Phew!
- There is an out. The 2nd DCA confirmed that the trial court is not prohibited from reviewing the continued need for a guardianship if the estate planning documents are later determined to be valid. … or if alternatives to a guardianship arise which sufficiently address the Ward’s needs. Read 744.462: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0744/Sections/0744.462.html .
- Yes, you can “go back” to the court and evidently have a hearing on the validity of the POA and the rev trust, and whether they adequately address the needs of the Ward. Just how soon you can do that, after an order appointing a guardian is rendered, which did NOT consider an estate plan, remains unclear. We will leave it to the guardianship litigators in Florida to find out.
So, what are our take-aways?
- A verified statement has a chilling effect
- The court will NOT consider an AIP’s estate plan as long as the two part test is met in 744.331 (6)(f) (good faith belief and reasonable factual basis)The two part test will be considered at the adjudicatory hearing, the guardianship trial, on the petition to appoint guardian
- Your trial strategy is most probably handcuffed to impeaching or “attacking” the good faith belief and reasonable factual basis. Litigators need to carefully weigh how they are going to do that, and with what evidence, documents and testimony.
- Guardianship Court Ain’t Vegas. Be mindful that, like most contested guardianships, what happens in guardianship court can come back to bite you if and when the Ward passes. And then the family “fights” over documents, undue influence and the estate in probate court.
- If you lost the fight for a lesser restrictive alternative, consider the next “battle “ in the guardianship wars: a 744.462 hearing or trial, trying to “breathe life” back into the not-considered durable POA and rev trust.
- If you won the fight and successfully impeached the verified statement, consider whether you can seek fees and what your order will say.
- If you won the fight and successfully impeached the verified statement, consider whether you can seek fees and what your order will say.