Can You Challenge The Revocation Of A Revocable Trust On Undue Influence Grounds In Florida?

Yes, under Florida law the revocation of a revocable trust can be challenged on undue influence grounds.  This has not always been the law.  The law regarding the ability to challenge a revocation of a revocable trust on the grounds of undue influence has changed significantly over the past several decades.  To fully understand the status of Florida law regarding an undue influence challenge to the revocation of a revocable trust, it helps to examine its evolution.

Genova v. Florida National Bank of Palm Beach County

Thirty five years ago the Florida Supreme Court, in Florida National Bank of Palm Beach County v. Genova, 460 So.2d 895 (Fla. 1984), barred an undue influence challenge to a settlor’s removal of funds from her revocable trust.

In Genova, the settlor of the trust, Ann, was 76 years old.  She married Mark, who was 32.  They divorced after a year of marriage.  During the divorce, the court voided a transfer of assets to Mark on the grounds of undue influence.  Also during the divorce, Ann created a trust naming Florida National Bank as a co-trustee with Ann.

Shortly after the divorce, Ann and Mark remarried. Five days after marrying for the second time, Ann wrote to First National Bank (while in Mark’s presence and on the letterhead of Mark’s business) and requested that the trust be revoked.  The next day, Ann executed a power of attorney (prepared by an attorney introduced to her by Mark), directing the transfer of the trust assets to an account at another bank in her name.  Ann’s attorney presented the power of attorney to a trust officer at Florida National Bank, who refused to accept it.

Suspecting undue influence, Florida National Bank petitioned the Florida probate court for instructions about how to proceed regarding the attempted revocation of the revocable trust.  The probate court found that the attempts to revoke the revocable trust were invalid as the product of undue influence by Mark. The Florida appellate court reversed, finding that the principle of undue influence has no place in determining whether a competent settlor can revoke a revocable trust.

The Florida Supreme Court upheld the appellate court’s decision, stating:

The courts have no place in trying to save persons such as Mrs. Genova, the otherwise competent settlor of a revocable trust, from what may or may not be her own imprudence with her own assets. When she created this trust, she provided a means to save herself from her own incompetence, and the courts can and should zealously protect her from her own mental incapacity. However, when she created this trust, she also reserved the absolute right to revoke if she were not incompetent. In order for this to remain a desirable feature of a trust instrument, the right to revoke should also be absolute.

MacIntyre v. Wedell

Twenty-five years after Genova, in MacIntyre v. Wedell, 12 So.3d 273 (4th DCA 2009), the Florida appellate court dismissed a challenge to a settlor’s removal of funds from her revocable trust on the grounds of undue influence.

In MacIntyre, unlike Genova, the settlor had died before the litigation commenced.  Still, the MacIntyre Court, relying on the reasoning from Genova, dismissed the trust complaint, holding that the courts have no place in trying to save an otherwise competent settlor of a revocable trust from what may or may not be her own imprudence with her own assets. The court reasoned:

[T]he Genova decision itself plainly suggests the availability of an undue influence challenge to the settlor’s revocation of his or her revocable trust should not turn upon whether the action is brought when the settlor is alive or deceased… In sum, we hold that, as a consequence of Genova, even after the settlor’s death, the settlor’s revocation of her revocable trust during her lifetime is not subject to challenge on the ground that the revocation was the product of undue influence. Thus, having considered all issues raised, we affirm the dismissal, with prejudice, of the “undue influence” claim.

This opinion received adverse commentary from several sources.   Perhaps the decision is defensible, due to the unique nature of revocable trusts.  A challenge to a competent settlor withdrawing money out of a revocable trust should fail in the same way that a competent person withdrawing money out of his or her bank account should fail.  The reported case does not address what happened to the funds after they were withdrawn.  Had the plaintiff attacked the destination of the funds, rather than the removal of the funds from the revocable trust, the case may have withstood dismissal.

However, it did not make sense to many practitioners that a court could void a trust if the creation of the trust was procured by undue influence, but that the revocation of a trust could not be challenged on these same grounds.

The Florida Legislative Fixes Allowing A Challenge To The Revocation Of a Revocable Trust On Undue Influence Grounds

In 2011, two provisions of the trust code were amended to fix the hole in the law regarding the ability to challenge the revocation of a revocable trust on undue influence grounds.

Section 736.0207 of the Florida Trust Code was amended to provide that the validity of a revocable trust or the revocation of part of a revocable trust cannot be challenged until the trust becomes irrevocable by its terms, or until after the settlor’s death.  The amended statute reads:

Trust contests.—An action to contest the validity of all or part of a revocable trust, or the revocation of part of a revocable trust, may not be commenced until the trust becomes irrevocable by its terms or by the settlor’s death. If all of a revocable trust has been revoked, an action to contest the revocation may not be commenced until after the settlor’s death. This section does not prohibit such action by the guardian of the property of an incapacitated settlor.

The prior version of 736.0207 did not contain any language regarding challenging the revocation of a Florida revocable trust.

Section 736.0406 of the Florida Trust Code was amended to provide that the revocation of a revocable trust procured by fraud, duress, mistake, or undue influence is void.

Effect of fraud, duress, mistake, or undue influence.— If the creation, amendment, or restatement of a trust is procured by fraud, duress, mistake, or undue influence, the trust or any part so procured is void. The remainder of the trust not procured by such means is valid if the remainder is not invalid for other reasons. If the revocation of a trust, or any part thereof, is procured by fraud, duress, mistake, or undue influence, such revocation is void.

The prior version of 736.0406 did not contain any language regarding the revocation of a trust procured by fraud, duress, mistake, or undue influence.

Read the House of Representatives Staff Analysis of the changes to the two statutes, which operate to legislatively overrule Genova and MacIntyre v. Wedell.  An excerpt of the analysis is below:

Challenging the Revocation of a Revocable Trust

A court may void a trust if the creation of the trust is procured by fraud, duress, mistake, or undue influence.  However, revocation of a trust cannot be challenged under these grounds. For instance, in Florida National Bank of Palm Beach County v. Genova, the Florida Supreme Court ruled that the principle of undue influence is not applicable when revoking a revocable trust. In the facts of the case, Mrs. Genova, who was 76, had married Mr. Genova, who was 32. The couple was divorced a year later but then remarried a year after the divorce. Mrs. Genova had established a revocable trust with Florida National Bank of Palm Beach County as the trustee. Mrs. Genova attempted to revoke her trust, but the trust officer refused to do so suspecting undue influence on the part of Mrs. Genova’s husband. Mrs. Genova filed an action to force the bank to revoke the trust shortly after. The Supreme Court ruled that, “Mrs. Genova has the power to revoke this trust at any time she wishes to do so.”

The Court further noted that:

The courts have no place in trying to save person such as Mrs. Genova, the otherwise competent settlor of a revocable trust, from what may or may not be her own imprudence with her own assets. When she created this trust, she provided a means to save herself from her own incompetence, and the courts can and should zealously protect her from her own mental capacity. However, when she created this trust, she also reserved the absolute right to revoke it if she were not incompetent. In order for this to remain a desirable feature of a trust instrument, the right to revoke should also be absolute.

The Florida Fourth District Court of Appeal furthered the opinion in Genova to include barring challenges to the revocation of a revocable trust under undue influence after the death of the settlor.

Effects of the Bill (Section 7 and 8)

The bill amends s. 736.0207, F.S., to provide that the validity of a revocable trust or the revocation of part of a revocable trust cannot be challenged until the trust becomes irrevocable by its terms, or until
after the settlor’s death.

The bill amends s. 736.0406, F.S., to provide that the amendment and restatement of a trust procured by fraud, duress, mistake or undue influence is void. The bill also provides that the revocation of a
revocable trust procured by fraud, duress, mistake or undue influence is void.

Find Your Probate Star

Lawyer Locator Front End

Miami

Niuris Bezanilla

Broward County (Ft. Lauderdale)

Natasha M. Dalton

Pinellas County (Clearwater)

Matthew Weidner

Orange County (Orlando)

Philip W. Gunthert

Sarasota County

Dawn Bates-Buchanan

Hillsborough County (Tampa)

R. Todd Burbine

Marion County (Ocala)

Katina Pantazis

Palm Beach County

Nicole Quattrocchi

St. Lucie County

Romaine Brown

Collier County (Naples)

Gregory J. Nussbickel

Pasco County (Port Richey)

Matthew Weidner

Volusia County (Daytona)

Heather Caeners

Martin County (Stuart)

Jon L. Martin

Seminole County (Sanford)

Matthew Weidner

Duval County (Jacksonville)

Long H. Duong

Sumter County (The Villages)

Matthew Weidner

Polk County (Lakeland)

Lesly Vaillancourt

Manatee County

Brice Zoecklein

Osceola County (South Orlando)

Matthew Weidner

Monroe County (Key West)

Matthew Weidner

Lee County (Ft. Myers)

Scott Kuhn

Lake County (West Orlando)

Matthew Weidner

Charlotte County

Matthew Weidner

Complete Guide to Florida Probate

Opening the Probate Estate / Initial Steps
Payment of Creditors, Expenses And Beneficiaries
Florida Spousal and Family Rights
Closing the Probate Estate
Probate Litigation and Will Contests
Florida Probate Quick Guides

Complete Guide to Florida Probate

Opening the Probate Estate - Initial Steps
Payment of Creditors, Expenses And Beneficiaries
Florida Spousal and Family Rights

Find Your Florida Probate Star

Broward County (Ft. Lauderdale)

Natasha M. Dalton

Pasco County (Port Richey)

Matthew Weidner

Sarasota County

Dawn Bates-Buchanan

Palm Beach County

Nicole Quattrocchi

Duval County (Jacksonville)

Long H. Duong

St. Lucie County

Romaine Brown

Orange County (Orlando)

Philip W. Gunthert

Marion County (Ocala)

Katina Pantazis

Pinellas County (Clearwater)

Matthew Weidner

Collier County (Naples)

Gregory J. Nussbickel

Miami

Niuris Bezanilla

Hillsborough County (Tampa)

R. Todd Burbine

Volusia County (Daytona)

Heather Caeners

Martin County (Stuart)

Jon L. Martin

Lee County (Ft. Myers)

Scott Kuhn

Sumter County (The Villages)

Matthew Weidner

Polk County (Lakeland)

Lesly Vaillancourt

Manatee County

Brice Zoecklein