Florida's spousal elective share statute survives constitutional challenge

In re Estate of Magee, --- So.2d ----, 2007 WL 2781131 (Fla. 2d DCA Sep 26, 2007)

When all else fails, one way to win a probate dispute is to challenge the portion of the probate code at issue on constitutional grounds.  A successful example of this approach was the Florida Supreme Court's 1990 decision in Shriners Hospital for Crippled Children v. Zrillic, 563 So.2d 64 (Fla.1990), where the court struck down Florida's mortmain statute, then codified at section 732.803, because it violated article 1, section 2 of the Florida Constitution by impermissibly infringing on the decedent's testamentary rights.

How hard is it to set aside a statute on constitutional grounds? VERY

Courts will bend over backwards to uphold a probate statute being challenged on constitutional grounds.  In Shriners Florida's Supreme Court ruled that the “reasonable relationship” or “rational basis” standard applies to review a statute that potentially infringes on (but does not destroy entirely) property or testamentary rights.  This is the lowest level of scrutiny applied by courts deciding constitutional issues through judicial review. The higher levels are typically referred to as intermediate scrutiny and strict scrutiny.

Is Florida's spousal elective share statute constitutional? YES

In the linked-to case Florida's spousal elective share statutes [click: 732.201 to 732.2155] were challenged on constitutional grounds.  The argument was that Florida law requiring that at least 30% of every married person's estate be set aside for a surviving spouse -- regardless of whether the surviving spouse had any financial need whatsoever -- violated the decedent's constitutionally protected property rights.

Nice try, but no cigar.  The 2d DCA upheld the constitutionality of Florida's elective share statutory scheme under the rational basis test.  The following excerpt from the linked-to opinion sums up the court's reasoning and also provides good guidance for anyone considering a future constitutional challenge to any other portion of Florida's probate code.

Fortunately, the Florida Supreme Court has recently clarified that the test to be applied in evaluating statutes and regulations that infringe on property rights or testamentary rights-at least those that do not require the absolute destruction of property-is not the “least restrictive means” test urged by Judith here, but rather a “reasonable relationship” test. In Haire v. Florida Department of Agriculture & Consumer Services, 870 So.2d 774, 783 (Fla.2004), the court explained,

[W]e have held that “[a]ll ... property rights are held subject to the fair exercise of the [police] power,” Golden v. McCarty, 337 So.2d 388, 390 (Fla.1976) (emphasis supplied), and have used the reasonable relationship test ... to evaluate statutes and regulations that infringe on property rights.

Id. (footnotes omitted).

As support for this proposition, the court expressly cited Zrillic. Haire, 870 So.2d 783 n. 9. In reconciling the cases, therefore, the Florida Supreme Court has now established that the “reasonable relationship” or “rational basis” standard applies to review a statute that potentially infringes on (but does not destroy entirely) property or testamentary rights.

As further explained in Haire,

Under this standard of review ... a “state statute must be upheld ... if there is any reasonable relationship between the act and the furtherance of a valid governmental objective.” Lane v. Chiles, 698 So.2d 260, 262 (Fla.1997) (emphasis supplied). Specifically, with respect to substantive due process, a statute is valid if it “bears a rational relation to a legitimate legislative purpose in safeguarding the public health, safety, or general welfare and is not discriminatory, arbitrary, or oppressive.” Chicago Title Ins. Co. v. Butler, 770 So.2d 1210, 1215 (Fla.2000).

870 So.2d at 782.

As noted above and acknowledged by Judith, this state has a “strong public policy concerning the protection of the surviving spouse of [a] marriage in existence at the time of the decedent's death.” See Via, 656 So.2d at 461. The provisions of the elective share statute thus serve a legitimate legislative purpose. The statutes are rationally related to that purpose in that they seek to provide any surviving spouse who has not waived such protections a minority share in the assets of the decedent in the event that spouse did not receive as much through testamentary dispositions. [FN3] This legislative scheme has strong historical roots in the common law, in existence before the enactment of our state constitution and undisturbed until now.

We therefore affirm the order on appeal.

Lateral thinking = probate litigation success

Marlowe v. Brown, 944 So.2d 1036 (Fla. 4th DCA Aug 02, 2006)

Being an effective probate litigator often requires lateral thinking -- the generation of novel solutions to problems using other than straightforward, step-by-step logic. The point of lateral thinking is that many problems require a different perspective to solve successfully.

The linked-to case is a perfect example. In this case a couple was in the midst of a very contentious divorce proceeding.  After they signed a non-final mediation agreement, but before a final judgment of divorce was entered, husband died. Shortly thereafter, wife died.  Presto! . . . we're in probate litigation land.

Why fight over a 50% divorce mediation agreement when you can get 100% in probate?

Before husband died, the parties had been contesting the meaning of their divorce mediation agreement, which contemplated a 50/50 split of the couple's assets.  Rather than continue this litigation in a linear fashion within the probate context, wife's PR came at the problem from a completely different perspective: why argue over 50/50 when wife, as a surviving spouse, gets 100% of all jointly titled assets?

In September, 2003, the wife moved the probate court to declare certain assets to be hers. Among these assets were the Greenbrier Farm, the Naked Lady Ranch, and “Hatteras Lots;” the dissolution judge's January 21 order had found that the husband and wife owned these properties as tenants by the entirety. The wife argued that these lots passed to her by operation of law when her husband died. The wife made similar arguments as to other properties based on the way the properties were titled at the time of the husband's death. For example, the wife argued that 103,114.299 troy ounces of silver passed to her under the provisions of a storage contract which declared that the account was a joint tenancy with right of survivorship.

Wife lost this argument at the trial court level . . . but won where it counts: on appeal.  The 4th DCA ruled that first, in the absence of a final judgment, there was no divorce; and second, as surviving spouse she gets 100% of the joint property.  Here's how the 4th DCA summed up its thinking:

The dissolution of marriage action terminated with the death of the husband and the . . . judge should have dismissed the case upon the wife's motion.

.     .     .     .     .

In Price v. Price, 114 Fla. 233, 153 So. 904, 905 (1934), the supreme court described the effect of an appellate reversal of a divorce decree, where one spouse dies after the issuance of the decree, but while the appeal is pending:

[O]n such reversal, the parties will be placed in the position they occupied before the decree was entered, and if one of them has died between the date of the decree of divorce and its reversal, the survivor procuring the reversal will be entitled to all rights of succession or the like, in the estate of the other, the same as if no divorce has ever been had.

Similarly, the husband's death in this case left the wife in the legal position of one whose marriage was terminated by death, and not by a final judgment.

Yes, lateral thinking wins the day again. 

Court says NO to appeal of spousal-elective-share order

Trenchard v. Gray, --- So.2d ----, 2007 WL 837294 (Fla. 2d DCA Mar 21, 2007)

In Dempsey v. Dempsey (a 2005 opinion I wrote about here) the 2d DCA ruled on when elective share orders are subject to appeal.  Under Florida Probate Rule 5.360, determining the elective share is a two-step process:

  • First, the trial court must rule on the issue of entitlement (Rule 5.360(c)).
  • Second, if the trial court finds entitlement, then it must determine the amount of the elective share, the assets to be distributed to satisfy the elective share, and, if contribution is necessary, the amount of contribution for which each recipient is liable (Rule 5.360(d)). 
Step one is a non-final, non-appealable order.  Step two is an appealable order.

Based on the same rationale, the 2d DCA dismissed an appeal of a step-one elective share order in the linked-to opinion.  The following excerpt from Judge Silberman's concurring opinion does a good job of explaining - again - the 2d DCA's approach to elective-share-order appeals:

Appellant Vicki Trenchard raises an issue regarding whether certain real property to which she claims ownership is subject to Appellee Marcia Gray's claim to an elective share. Ms. Trenchard and William Gray, the decedent, owned the property as joint tenants with the right of survivorship. The trial court's order finds that the decedent's interest in the real property is subject to the elective estate. The order is consistent with the statutory requirement that the value of the decedent's interest in the property must be taken into account to determine the elective estate. See § 732.2035, Fla. Stat. (2005).

The trial court has not determined any questions as to ownership of the property or whether the property itself may be used to satisfy the elective share claim. The court also has not resolved questions as to the amount of the elective share, the identification of assets that will be used to satisfy the elective share, the amount of the unsatisfied balance of the elective share, or the apportionment of the unsatisfied balance among the direct recipients of the remaining elective estate. See §§ 732.2075, 732.2085. Thus, I concur in the decision to dismiss this appeal because the trial court's order is nonfinal and nonappealable. See Dempsey, 899 So.2d 1272.

Can you accidentally create an "Elective Share Trust" under Florida law? Probably NOT

Janien v. Janien, 2006 WL 2956304 (Fla. 4th DCA Oct 18, 2006)

Under Florida law a surviving widow or widower is entitled to at least 30% of the decedent spouse's estate.  If done properly, an "elective share trust" allows a person to satisfy his or her surviving spouse's elective share rights, while still retaining the right to say what happens to the elective-share assets when the surviving spouse dies.   This planning device  can be especially useful  where a person wants to provide for a second  wife or husband, but make sure the family assets go back to his or her children when the surviving spouse dies.

The issue in this case was whether the following clause created an elective share trust within the meaning of F.S. 732.2025(2).  The drafting attorney who prepared this instrument testified that at the time he did the drafting he'd never heard of an elective share trust.  So the question was did the decedent "accidentally" get it right?

ARTICLE SECOND: If my husband, Cedric Janien, survives me:

A. I devise and bequeath my beneficial interest in the North Chatham Realty Trust, together with all furniture, fixtures, antiques and other items of personal property in said residence, to my Trustee, with the right in my husband to exclusively live in and occupy such residence for the period of his life, and provided that he is financially able to do so, he shall be responsible for all maintenance charges and taxes assessed against the residence during his lifetime. If he does not have the financial ability to pay such expenses and taxes, them my Trustee is authorized and is directed to mortgage the premises for the purpose of paying such maintenance charges and taxes.

The trial court ruled this trust did NOT qualify as an elective share trust.  The 4th DCA agreed, providing the following valuable guidance:

First, Article Second (A) fails to satisfy the requirement of section 732.2025(2)(a), because .  .  .  Cedric is entitled neither to the “use” of the property within the meaning of the statute, nor to “income” derived from the property.


Article Second (A) created something less than a life estate in the Massachusetts property.


We also hold that Article Second (A) does not satisfy the requirements of section 732.2025(2)(b). That section requires that the purported elective share trust be “subject to the provisions of former s. 738.12 or the surviving spouse has the right under the terms of the trust or state law to require the trustee either to make the property productive or to convert it within a reasonable time.”

Lesson learned: 

The technical requirements for a valid elective share trust are such that you're probably not going to have a qualifying clause unless the drafting attorney knew what he or she was doing.  By way of contrast, the following is a form of elective share trust that actually works:

Despite any other provision of this Trust Agreement, if my wife or her designated representative elects the Elective Share in my estate, any trust created under this Trust and not qualifying for the federal marital deduction in which my wife is a beneficiary will be divided into two parts, with the least amount of that trust as is needed to satisfy the balance of the Elective Share unpaid by other sources under Section 732.2075 of the Florida Statutes being held as a separate trust (the “Elective Share Trust”) and administered so as to qualify under Section 732.2025 of the Florida Statutes (including the right for my wife to require the Trustee to make the trust property productive or to convert it within a reasonable time). Unless the original trust already provides for a qualifying invasion power or a qualifying power of appointment for my wife, the Personal Representative in its discretion may elect to create an invasion power for the Elective Share Trust for purposes of valuation under Section 732.2095 of the Florida Statutes. If an invasion power is created, the Personal Representative shall designate that such a power is to apply by filing a notice with my wife and in the probate court within 6 months after the election by my wife of the Elective Share.

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Good Facts Rescue "Ambiguous" (Maybe Non-Existent?) Elective Share Waiver in Prenuptial Agreement

Weisfeld-Ladd v. Estate of Ladd, 2006 WL 231481 (Fla. 3d DCA Feb 01, 2006)

Clearly, the couple at the center of this dispute thought that when they signed their prenuptial agreement they were waiving any spousal rights they had to each other's separate property - including rights of a surviving spouse to an elective share under F.S. § 732.201. Nonetheless when husband died, surviving spouse went ahead and filed a petition seeking an elective share of his estate. The 3d DCA summarized her testimony regarding the couple's clear intent as follows:

"Most importantly, the wife testified as to her understanding of the Prenuptial Agreement. It was her understanding that if she would have passed away, her son would have inherited all of her separate property, and that upon her husband's death, his children would inherit all of his separate property."

"[Wife] even acknowledged that if she would have predeceased her husband, her son would have been entitled to inherit all of her separate property. Based upon the wife's interpretation of the Prenuptial Agreement, it is clear that the husband and wife's intent would have been defeated if the surviving spouse was permitted to receive an elective share. There is no doubt that the wife clearly understood that, by entering into the Prenuptial Agreement, she would not receive any of the husband's separate property upon his death, and that all of his separate property would go to his two children."

The only problem was that the prenuptial agreement didn't actually say what the parties thought they were agreeing to. In fact, the key language of the prenuptial agreement doesn't mention waiving spousal elective share rights at all, what it does say is, to say the least, "ambiguous":

"It is [husband's] intent that, in the event of his death, all of his separate property be given to his children, STEVEN M. LADD and BETHANY S. LADD, or as otherwise provided for in his Last Will and Testament."

Was that one sentence enough under F.S. § 732.702 to effectuate a valid waiver of spousal elective share rights? According to Dade County Probate Judge Maria M. Korvick it was, so she denied surviving spouse's elective-share petition. By the way, here are the portions of F.S. § 732.702 focused on by the 3 DCA:

"rights of a surviving spouse to an elective share ··· may be waived, wholly or partly, before ··· marriage, by a written contract···· Unless the waiver provides to the contrary, a waiver of 'all rights,' or equivalent language, in the property or estate of a ··· prospective spouse ··· is a waiver of all rights to elective share···· (emphasis added by 3d DCA)."

What I find most interesting about this case is how the 3 DCA seems to go out of its way to affirm the trial court's ruling denying the surviving spouse's elective share claim. Obviously swayed by a compelling set of facts, the 3 DCA arrived at the "right" conclusion as follows:

First: Assume findings of fact NOT included in the trial court's order:

"The trial court did not make a specific finding as to whether the Prenuptial Agreement was ambiguous or unambiguous. However, as the trial court allowed the wife to testify as to her intent when entering into the valid Prenuptial Agreement, we assume that the trial court found that the Prenuptial Agreement was susceptible of more than one construction and, therefore, ambiguous."

Second: Agree with findings of fact ASSUMED into the record:

"Upon review of the Prenuptial Agreement, we agree with the trial court's determination that the Prenuptial Agreement was ambiguous."

Third: After assuming factual findings into the record that weren't there to begin with, then agreeing with the trial court's assumed findings of fact, hold that "PAROL EVIDENCE," i.e., testimony by the surviving spouse completely undermining her own petition, was validly admitted to construe the "ambiguous" prenuptial agreement:

"As the agreement was ambiguous, the trial court properly admitted parol evidence to shed light on the intent of the parties when entering into the Prenuptial Agreement."

Presto! Good facts save the day!

"Dear Abby" Column: Wife Discovers Man's Will Would Leave Her Homeless

Who would have thought that "Dear Abby" could teach us something about practicing trusts and estates law in Florida? Read the following exchange (also available here) and ask yourself three questions:

  • Assuming the estate planning attorney described below only represented the husband, did the attorney violate his confidentiality obligations under Florida Ethics Rule 4-1.6? Answer: Yes.
  • Under Florida Bar Ethics Opinion 95-4, could the estate planning attorney represent both husband and wife in the scenario described below? Answer: No.
  • Is this type of behavior great advertising for Florida's homestead protection laws and spousal elective share rights? Answer: Yes!!!

DEAR ABBY: My husband, "Girard," and I have been married two years. We both have children from previous marriages. Girard always told me I would have a home if I outlived him, even though his children will eventually inherit the property.

One day I asked Girard if it was in the will, and he said no, but that he and his children "had discussed it." When I asked him to put it on paper, he agreed. His attorney drafted a document for him to sign. After it had laid around the house for more than a week, Girard told me he had lost it. I reminded him to get another copy, sign and return it. After two more weeks passed with no signed document, Girard told me his attorney was "busy" and "would get to it when he could."

I decided to call the attorney myself. Well, you guessed it. I was told the papers had been executed. When I confronted Girard he admitted he had lied and promised to have the will done over. When I looked at the document he had signed, I saw that Girard was giving me 90 days to get out of the house after his death.

I was upset, so he tore up the document. Am I being unreasonable? I am 76, and he is 84. -- DOESN'T WANT TO BE HOMELESS IN BATON ROUGE

DEAR DOESN'T: It's not unreasonable to want a roof over your head should your husband predecease you. Thank heavens you found out now what was planned for you, rather than being hit with it while you were helpless and grieving. Now that you know how your husband thinks, consult an attorney of your own and find out exactly what your rights are as a wife in the state of Louisiana. The law can vary from state to state, and it is extremely important that you know what you are entitled to.

Source: Wills, Trusts & Estates Prof. Blog

Order Determining Entitlement to the Elective Share Is Not Appealable

Dempsey v. Dempsey, 2005 WL 954856 (Fla. 2 DCA April 27, 2005) (Appeal Dismissed)

Under Florida Probate Rule 5.360, determining the elective share is a two step process. First, the trial court must rule on the issue of entitlement (Rule 5.360(c)). Second, if the trial court finds entitlement, then it must determine the amount of the elective share, the assets to be distributed to satisfy the elective share, and, if contribution is necessary, the amount of contribution for which each recipient is liable (Rule 5.360(d)).

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Florida's Expanded Elective Share Rights Limited to Persons Dying after October 1, 2001

Estate of Heid v. Heid, 863 So.2d 1259 (Fla. 5th DCA Jan. 9, 2004) (TRIAL COURT AFFIRMED)

Edward J. Heid died on December 18, 1999. Mr. Heid's surviving wife, Blanche A. Heid, sought to enforce her elective share rights against a trust holding real and personal property that had benefitted her predeceased husband. Circuit Court Judge Charles M. Holcomb dismissed the complaint with prejudice for failure to state a cause of action. Noting that Section 732.2155(1) explicitly limits Florida's expanded elective share rights to decedents dying on or after October 1, 2001, the 5th DCA affirmed the trial court's dismissal with prejudice.