The Florida First District Court of Appeal recently ruled on a family situation that provides a real lesson for all Floridians on how important careful drafting of estate documents (wills, trusts, powers of attorney, etc.) are in the State of Florida if you want to avoid probate litigation and probate court determinations of your future property distributions.
In the case of Cessac v. Stevens, the court had before it a controversy over how a power of appointment should work under Florida law, and, in a a surprise to some, the appellate court decided that a Florida power of appointment is a power that must be strictly followed – even if there are facts which demonstrate a different intent on how to exercise the power. This is only the second case on the books of Florida case law that deals with this particular issue (the other is Talcott v. Talcott).
Lesson in this case: if you’re not careful, you may leave a Last Will and Testament with a provision stating that certain assets are to be distributed in a certain way after your death only to have those assets later be legally found to be restricted in how they are to be distributed: your Will’s provision may be deemed unenforceable. It will not matter how clear the language is in the Will as to what you want to happen.
The result of this opinion may be viewed as harsh and rigid to some, but Florida courts have the power to decide the rights of those who come before them with controversies. In other words, once a case is in litigation and it works its way to the appellate court, the parties will most likely have to live with what the appellate court’s ruling (or appeal it to the Florida Supreme Court, if that high court agrees to review the case).
Cessac v. Stevens
In this situation, Sally Christiansen wrote a Last Will and Testament which left the remainder of her estate to Joanne Cessac. Sally Christiansen left nothing to her children. They were disinherited heirs.
Sally Christiansen was also the beneficiary of three Trusts that her father had set up long before, and it was clear in the language of her will that she intended for the assets in these three Trusts to go to Joanne Cessac.
However, the Florida court ruled that the assets in the Trusts would go to Sally Christiansen’s children instead. Why? The language that her father had placed in each of the Trusts included an identical restriction:
“Upon the death of my daughter, [Ms. Christiansen], the Trustees shall transfer and deliver the remaining principal of this share of the trust, … as my daughter may, by her will, appoint, making specific reference to the power herein granted…. If [Ms. Christiansen] … dies without exercising the power of appointment granted herein, [her] share of this trust shall be divided into equal shares so that there shall be one share for each child of [Ms. Christiansen]….”
In Sally Christiansen’s Will, she did mention the three Trusts but her will did not reference the power granted in each Trust allowing her to devise her shares in them via her Will. The fact that the Will referenced the three Trusts as existing was argued to evidence Sally Christiansen’s desire that the assets of the Trusts go to Joanne Cessac.
The children sued. They won.
The court agreed with the children’s probate lawyers: because her Will failed to provide any “specific reference to the power [of appointment]” the trust assets were to be distributed as Sally Christensen’s father provided when he drew up the original trust documentation: “divided into equal shares” between Ms. Christiansen’s children.
In sum, we conclude that to properly exercise a power of appointment such as the powers provided for in the trusts at issue in this case, the decedent must at least make reference in his or her Will to the powers of appointment held by the decedent. Here, the mere reference to one of the trusts and to the location of the property of the other two trusts was not sufficient to even substantially comply with the “specific reference” requirements in the trusts. Accordingly, because the decedent failed to comply with the requirements of the trusts when attempting to execute her powers of appointment, the assets in the trusts did not become part of her estate and must pass to the decedent’s children, as directed in the original trusts, rather than to Ms. Cessac as provided in the decedent’s will. We recognize the seemingly harsh result of our conclusion that Ms. Cessac will not receive the assets the decedent apparently intended for her to receive. However, this result is a function of the intent of the original donor, who had the right to place whatever restrictions he desired on the disposition of his property. The decedent was obligated to comply with these restrictions, and compliance would not have been difficult here, as all that was necessary was some reference to powers of appointment in the decedent’s will.
Lesson of Cessac v. Stevens
Florida probate courts respect document language; they will review documents word by word to determine how the document is to be interpreted according to Florida law and determine the distribution of assets after someone has died. Estate planning documents needs to be carefully prepared in order to protect the decedent’s last wishes.
From this case, it is clear that probate litigation often involves fights over provisions that are 25 words or less but those words can be the deciding factor in who gets what in a sizable estate. However, that fight may be worth the effort in some situations. In this case, the result is that the children were able have their mother’s wishes disavowed and instead had the wishes of their grandfather fulfilled. Probate litigation can be tricky.