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How To Reform a Trust in Florida

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It is possible to reform a trust under Florida law. A Florida trust, even if not ambiguous, can be reformed to correct a mistake by the settlor.

Section 736.0415 of the Florida Trust Code provides as follows:

736.0415 Reformation to correct mistakes.—Upon application of a settlor or any interested person, the court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intent if it is proved by clear and convincing evidence that both the accomplishment of the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement. In determining the settlor’s original intent, the court may consider evidence relevant to the settlor’s intent even though the evidence contradicts an apparent plain meaning of the trust instrument.

What Evidentiary Standard Applies To Reform A Trust Under Florida Law?

Most civil cases are decided by an evidentiary standard called a preponderance of the evidence. To reform a trust, a higher standard of evidence is required – the clear and convincing standard. Apparently, any probative evidence can be considered in reforming the trust, even if the evidence contradicts the plain language of the trust itself.

Trust Reformation Cases in Florida

At least five cases have been decided by the Florida appellate courts (as of January 2020) on the application of Section 736.0415 to a trust reformation action.

Reid v. Temple Judea

In Reid v. Temple Judea, 994 So. 2d 1146 (Fla. 3d DCA 2008), the Court held that, under the common law of trusts in Florida, a Court had the power to reform a trust to correct a mistake:

Thus, in In re Estate of Robinson, 720 So. 2d 540, 543 (Fla. 4th DCA 1998), the Fourth District [**6] Court of Appeal, in a case of first impression, held “that HN2Go to the description of this Headnote.a trust with testamentary aspects may be reformed after the death of the settlor for a unilateral drafting mistake so long as the reformation is not contrary to the interest of the settlor.” See Schroeder, 825 So. 2d at 445 (adopting the reasoning and holding of Robinson for the proposition that reformation of a trust after the death of the settlor will be allowed where consistent with general equitable principles); In re Estate of Huls, 732 So. 2d 1206, 1207 (Fla. 2d DCA 1999) (citing Robinson for the proposition that a trust with testamentary aspects may be reformed after the death of the settlor for a unilateral drafting mistake where reformation is not contrary to the settlor’s interest).

The Court also pointed to the (at the time) newly enacted Section 736.0415 for additional support of the power to reform a trust. The other issue in the case – whether the trustee had standing to bring the reformation action – was answered in the affirmative.

Reid v. Estate of Sonder

The Reid case came back on appeal, in Reid v. Estate of Sonder, 63 So. 3d 7, 10 (Fla. Dist. Ct. App. 3d Dist. 2011), after the probate trial court denied the petition to reform the trust, explaining the difficult burden that one has in seeking reformation:

Even assuming the probate court found Palmer’s testimony credible, there is no evidence Sonder would not have been capable of understanding the trust as written. In fact, nothing in the record explains why Sonder, an articulate and precise businessman, would have approved the plain and simple trust terms if they did not reflect his intent. Further, although it is clear Sonder intended for Reid to have the apartment, it is equally apparent Sonder intended for Hebrew Union College to have $125,000 as part of an endowment fund in honor of his deceased wife. These two gifts together constitute the bulk of the trust assets. The testimony does not establish Sonder would have preferred the gift to Reid over the endowment gift in the event both could not be satisfied. Therefore, we affirm the probate court’s order on the petition to reform.

Morey v. Everbank

The third Florida case, Morey v. Everbank, denied the attempt to reform the trust, explaining:

Reformation is not available to modify the terms of a trust to effectuate what the settlor would have done differently had the settlor foreseen a change of circumstances that occurred after the instruments were executed.

Megiel-Rollo v. Megiel

In Megiel-Rollo v. Megiel, 162 So. 3d 1088 (Fla. 2d DCA 2015), the court confirmed Florida’s liberal policy with regarding to reforming written instruments.   To reform a trust in Florida, the court held that section 736.0415 is to be applied broadly:

The statute provides that reformation of the terms of a trust is available “if it is proved by clear and convincing evidence that both the accomplishment of the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.” (Emphasis added.) It is beyond argument that the statutory reference to “a mistake of fact or law” is not limited by any qualifiers. The broad scope of the language used in the statute is inconsistent with the notion that reformation is available to correct some mistakes in a trust, i.e., “simple scrivener’s error,” but not others.

In Megiel, the Court held that the trust could be subject to reformation to correct an alleged drafting error.

Kelly v. Lindenau

In Kelly v. Lindenau, 223 So. 3d 1074 (Fla. 2d DCA 2017), the Florida appellate court held that reformation of the trust was not permitted, because the amendment at issue was only signed by one of the witnesses and was invalid under Florida law.  There were no terms of the Trust that needed reformation.  The court stated:

Indeed, in discussing Florida’s liberal policy regarding reformation, this court has acknowledged that the remedy is used “to cause the instrument to reflect the true agreement of the parties when the terms of the agreement have not been clearly expressed in the instrument because of [a] mutual mistake or inadvertence.”  Id. at 1097 (emphasis added) (quoting Tri-Cty. Prod. Distrs., Inc. v. Ne. Prod. Credit Ass’n, 160 So. 2d 46, 49 (Fla. 1st DCA 1963)). But here, the terms of the second amendment are clear that Ralph intended to leave the Bradenton house to Lindenau. Thus there were no terms of the trust that needed reformation. Rather, Lindenau sought reformation to remedy an error in the execution of the second amendment. But by the statute’s terms, reformation is only available to remedy mistakes that affect “both the accomplishment of the settlor’s intent and the terms of the trust.” § 736.0415.

 

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