Florida law provides that a trust may not be challenged until the trust becomes irrevocable. No Florida statute specifically indicates when the time to challenge a Florida trust expires, or if the statute of limitations can be extended for fraud. Instead, the Florida general statute of limitations apply from Florida Statute Section 95.
In Flanzer v. Kaplan, 230 3d. 960 (2nd DCA 2017), the Court addressed the issue of when a plaintiff must bring an action to challenge the validity of a trust, in this case under an undue influence theory.
What is the Statute of Limitations to Challenge a Trust in Florida?
Four years, normally. The trust statute explains the statute of limitation for revocable trusts:
736.0604 Limitation on action contesting validity of revocable trust.—An action to contest the validity of a trust that was revocable at the settlor’s death is barred, if not commenced within the earlier of:
(1) The time as provided in chapter 95; or
(2) Six months after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust’s existence, of the trustee’s name and address, and of the time allowed for commencing a proceeding.
The Florida Trust Code allows a plaintiff to challenge any portion of a trust procured by undue influence under Florida Statute Section 736.0406. An action, however, cannot commence until the trust becomes irrevocable either by its terms or by the settlor’s death. Florida Statute Section 736.0207(2) provides:
736.0207 Trust contests.—
(1) In an action to contest the validity or revocation of all or part of a trust, the contestant has the burden of establishing the grounds for invalidity.
(2) 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 If all of a revocable trust has been revoked, an action to contest the revocation may not be commenced until after the settlor’s death.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.
In the Flanzer case, the trust apparently became irrevocable at its creation in 2005, by its terms. The plaintiff, Jan Flanzer, brought suit in 2015 to challenge the trust, on the grounds of undue influence. The trial court dismissed her claim, under the theory that, because the trust was irrevocable at its creation in 2005, the applicable statute of limitations was four years from then.
Section 736.0604, as well as Florida law in general, holds that Florida’s general statute of limitations statute, found in Section 95.11, applies to challenge the validity of a trust. The Court held that Section 95.11(3)(i) applies, which gives a four-year statute of limitation. Section 95.11(3)(j) (after renumbering), however, provides that the four-year statute of limitation applies for “A legal or equitable action founded on fraud.”
Can The Statute of Limitations to Challenge a Trust in Florida Be Extended For Fraud?
Yes. Even though the four-year statute of limitations under Section 95.11(3)(j) applies to an action challenging a Florida trust, the question is when does the statute of limitations start to run – at the trust’s irrevocability or some other point, and does fraud extend the statute of limitations. Florida Statute 95.031(2)(a) provides:
(2)(a) An action founded upon fraud under s. 95.11(3), including constructive fraud, must be begun within the period prescribed in this chapter, with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, instead of running from any date prescribed elsewhere in s. 95.11(3), but in any event an action for fraud under s. 95.11(3) must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.
The Court allowed the plaintiff the opportunity to proceed with her Florida trust challenge on the basis of fraud. As explained by the Court:
To be sure, undue influence claims and fraud claims are distinct causes of action. See GEICO Gen. Ins. Co. v. Hoy, 136 So. 3d 647, 651 (Fla. 2d DCA 2013) (enumerating elements of fraud in the inducement); Greenberg v. Van Dam, 833 So. 2d 810, 812 (Fla. 3d DCA 2002) (enumerating elements of undue influence). But the uses of the prepositions “founded upon fraud” and “founded on fraud” in sections 95.031(2)(a) and 95.011(3)(j), respectively, plainly countenance a broader class of claims than merely actions alleging fraud in general. As such, we see no reason why section 95.031(2)(a) would not apply to Flanzer’s claim—provided that Flanzer otherwise satisfies the requirements of that section.