2nd DCA Rules in Favor of Remaining Settlor of Trust to Have Unfettered Discretion as to its Contents, Careful and Proper Draftmanship is Essential in Estate Planning and Litigation

In the case, Dowdy v. Dowdy, 182 So.3d 807 (2nd DCA 2016), Co-successor trustee Michael Dowdy (hereinafter Michael) brought this action because after one of the settlors of the trust died the living settler removed him as successor trustee. Michael also sought a temporary injunction to compel preservation of trust proceeds for which he was successful. Thus, the settlor appealed. This ruling was ultimately reversed in the 2nd DCA. 

The Dowdy Family Trust created by husband and wife Dennis and Betty Dowdy in 2006. It was mainly comprised of two parcels of real estate. The trust named Betty and Dennis, as the initial co-trustees and beneficiaries and each trustee’s children were co-successor trustees.

In 2011 a few years after Dennis died, Betty amended the trust to remove Dennis’ children as co-successor trustees and beneficiaries. Michael was one of Dennis’s sons, who had been removed. Betty subsequently sold the remaining trust property and when Michael learned of the sale, he requested that the profits be split between co-trustees.  This petition stems from the company’s delivery of the proceeds solely to Betty. Michael contends the changes made were invalid because they were made after the death of the co-settlor and co-trustee. The court held that in order to obtain a temporary injunction the movant must demonstrate first, that he will suffer irreparable harm without an injunction; second, that he has no adequate remedy at law; third, that he enjoys a substantial likelihood of success on the merits. Furthermore, he must demonstrate that an injunction would be in furtherance of the public interest. The court held that it must make a factual finding to support each element listed above before granting the injunction. In the case at bar, Betty, being the sole trustee following the death of her husband, has sole discretion to pay, apply, or invade the income or corpus to or for the benefit, support or maintenance of the initial primary beneficiaries and may add to the principle any income not so expended”. Therefore, Betty has the unfettered authority to sell the property solely for her own profit. The trust could have been construed in a way to prevent this whole situation from occurring, where Dennis could have structured the trust in a way that would have protected his children and his desired beneficiaries. Clear and proper draftsmanship that understands the client’s true desires and needs is essential in estate planning and litigation.

If you or anyone you know is in need of representation in actions involving Guardianship, Probate and/or Trust Disputes, or questions pertaining to such proceedings, please contact The Law Offices of Glenn M. Mednick, P.L., at (954) 315-1154 or gmednick@mednicklawgroup.com.