Change in Parent’s Revocable Trust Omitting Child after Parent Remarries… Actionable? Carefully Read the Statute!

Change in Parent’s Revocable Trust Omitting Child after Parent Remarries… Actionable? Carefully Read the Statute!

In a recent case, Tarek Habel v. Suzanne Habel, et. al., the court determined that the plain language in a Florida statue precluded a claim by a potential beneficiary of a trust.

A revocable trust was created when Salem Habal’s (“Father”) wife predeceased him after 40 years of marriage. Father was the settlor of the trust and son, Tarek, (“Son”) was a beneficiary of the trust. Father was not the trustee. As can happen in these cases, Father remarried and amended the trust. It is unclear whether Son was omitted or his share was reduced but it is clear that son did not agree with such amendment.

Son, as a “potential beneficiary” filed a complaint against the trustees seeking rescission or revocation of the amendment, due to the trustees’ undue influence and Father’s incapacity and damages for the trustees’ tortious interference with Son’s testamentary expectancy.

The trial court dismissed the case determining that, pursuant to Florida law, Son could not commence an action while the settlor was still alive.

Son appealed, arguing that the settlor lacked capacity to amend the revocable trust as supported by medical documents and “exceptional circumstances” permitted the tortious interference claim.

The appellate court cited Section 736.0207(2) of the Florida Statutes stating that “[a]n action to contest 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…This section does not prohibit such actions by the guardian of the property of an incapacitated settlor”.

By the plain reading of the statute, the trust had to be irrevocable or the settlor had to be incapacitated and the cause of action had to be brought by the guardian. Son was not the guardian of Father’s property. The appellate court also found the claim of exceptional circumstances for tortious interference claim was without merit and affirmed the trial court.

ADVICE: Unfortunately, in second and blended families an amendment of a revocable trust is common, sometimes cutting out children of a first marriage or other beneficiaries intended by the first spouse. Careful drafting, planning and consultation with an attorney can prevent this disinheritance.

A guardian of an incapacitated settlor’s property, DOES have a cause of action prior to the trust becoming irrevocable. In second or series marriages, the current spouse may be such guardian and it is unlikely that such an “interested” guardian is going to bring an action to defeat their own interest.

WORD OF THE WEEK: Tortious interference with an expectancy involves one who uses fraud, duress or some other tortious or wrongful means to prevent another from receiving from a third person an inheritance or gift they otherwise would have received.