What Happens When A Trustee Needs To Recover Property Wrongfully Taken From A Florida Trust?

One function of the personal representative of a probate estate or a trustee for a trust is taking legal action to recover property that was wrongfully taken from either. A trustee, for example, has a fiduciary duty to the beneficiaries of the trust to ensure that trust assets have not been misappropriated. This may include suing a party who is wrongfully in possession of the trust’s property.

Husband Improperly Transferred Millions to Mistress Without Wife’s Knowledge

A recent case from here in Florida, Wallace v. Torres-Rodriguez, provides a good example. This case involved a husband, a wife, and the husband’s longtime mistress. In 2010, the wife asked her estate planning attorney to draft an irrevocable trust agreement for both her and the husband. At the time, the husband suffered from a degenerative neurological condition, and the wife said she wanted to protect the couple’s marital assets from any potential “undue influence” upon her husband.

The husband and wife subsequently executed the irrevocable trust, which named their son as trustee. The couple signed a separate agreement to fund the trust using their marital property. Specifically, the agreement stated that neither spouse would transfer any marital asset during their lifetimes without the consent of the other. And upon the death of one spouse, the surviving spouse was then required to convey all remaining joint marital assets to the trustee within 60 days.

The wife died in 2016. The husband then informed the son, who was now serving both as trustee and personal representative of his mother’s estate, that he had been conducting a 14-year extramarital affair. During the course of this relationship, the husband said he “paid for sex” and given several million dollars to his mistress in the form of cash, real estate, and other assets.

The son subsequently sued the mistress, seeking recovery of these assets on behalf of the trust. Following a bench trial in 2020, a judge held the husband’s transfers to the mistresses violated the agreement he signed with his wife as well as Florida law governing property held by married couples as tenants by the entirety. The judge rejected the mistress’ testimony that the wife had known about these millions of dollars in gifts and consented to them.

The trial court did, however, permit the mistress to keep some of the assets she received from the husband on the grounds that she had relied upon his financial support and thus “refrained from finding whatever employment she would otherwise have been obliged to find.”

On appeal, the Florida Third District Court of Appeal was less sympathetic. It held that the mistress had to return all of the property to the trust. The appellate court noted that the mistress never had the legal right to receive the husband’s marital property without the wife’s consent and that she knew taking such property was wrong.

Speak with a Florida Trust Litigation Lawyer Today

At the end of the day, a trustee’s obligations require them to safeguard the trust’s property using any legal means at their disposal. An experienced Pompano Beach estate and trust litigation attorney can provide valuable guidance and assistance in accomplishing this task. If you need to speak with a lawyer, call the offices of Mark R. Manceri, P.A., today to schedule a consultation.

Source:

3dca.flcourts.org/content/download/837470/opinion/210244_DC08_05112022_101440_i.pdf