Is a Testamentary Trust Beneficiary an “Interested Person” in the Probate Estate?

There are a few different ways to create an estate planning trust in Florida. One is to sign a trust during your lifetime. This is commonly known as a living trust or revocable living trust. This type of trust exists separate from your will, if you have one.

There is also what is known as a testamentary trust. This is where a trust is created under the terms of a last will and testament. Testamentary trusts can be used to handle specific bequests to individuals. For example, a parent might leave an inheritance to their child, but place it in a testamentary trust. This means that the trustee actually holds and administers the funds for the benefit of the child, as specified in the will.

Brothers’ Disagreement Over Father’s Estate Leads to Extended Litigation

Does a person who is a beneficiary under a testamentary trust, but not the rest of a will, have standing to challenge the discharge of the estate’s personal representative in the underlying probate proceeding? The Florida Fourth District Court of Appeal recently confronted such a case. In Carmel v. Fleischer, a decedent passed away in 2017, leaving behind three children. Before his death, the decedent executed a codicil (amendment) to his will, leaving a share of his estate to one child in a testamentary trust. The decedent named one of his other sons and another person to serve as co-trustees.

After the father died, there was extensive litigation between the children. The son who was the beneficiary of the testamentary trust alleged that his brother–now the co-trustee–had the codicil signed through the exercise of undue influence over their father. The parties eventually agreed to a settlement that included the appointment of a neutral party as personal representative of the father’s estate.

Litigation then followed over the enforcement of the settlement agreement. By 2023, the personal representative filed a final accounting of the estate and petitioned to be discharged from his duties. The son had filed objections to this, but the personal representative argued that the son lacked standing as he was not an “interested person” in the probate proceedings. The trial court agreed, holding that the co-trustees of the testamentary trust–not the beneficiary–were the interested persons.

On appeal, the Fourth District disagreed. The appellate court noted that the beneficiary’s objections in this case go to an alleged conflict of interest by the co-trustee (i.e., his brother). Specifically, the brother could stand to benefit if the court dismisses the beneficiary’s objections, which go through the issue of how to allocate the expenses of administering the estate with the testamentary trust. As such, the beneficiary was an “interested person” in the estate and had standing to object to the discharge of the personal representative.

 Contact Mark R. Manceri, P.A., Today

Estate and trust disputes often involve conflicts between family members. A qualified Pompano Beach trustee dispute lawyer can help guide you through these difficult matters with professional skill and understanding. Contact the offices of Mark R. Manceri, P.A., today to schedule a consultation.

Source:

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