3rd DCA Reverses Trial Court on Interpretation of Fla. Stat. §736.0602(3)(b)(2) on Case of First Impression, Citing 2nd Restatement of Trusts and 4th DCA

In Bernal v. Marin, 2016 Fla. App. LEXIS 9229 (Fla. 3d DCA, 2016), the Third DCA reversed the trial court, holding that under section 736.0602(3)(b)(2), Fla. Stat., a settlor’s will revoked her earlier trust, although it did not specifically refer to it as the will stated it revoked all prior trusts, and affidavits of attorney who drafted will and settlor’s confidant provided clear and convincing evidence that settlor intended to revoke trust and leave estate to her friend.

In October, 2004, Renee Zintgraff executed the Trust naming herself as the initial trustee and her cousin, Marin, as the successor trustee. The Trust directed that upon Zintgraff’s death, a specific bequest of $5,000 was to be distributed to her cousin, Lisa Cardozo, and the remainder of her Trust property was to be equally divided and distributed to the Zoological Society of Florida, Defenders of Wildlife, International Wolf Center, and Parrot Jungle of Miami. Zintgraff funded the Trust with her solely owned residence and with her Wells Fargo brokerage account, both of which were titled in the name of the Trust. It was undisputed that in the Trust, Zintgraff specifically reserved her right to revoke the Trust during her lifetime but that the Trust did not provide a method for revocation of the Trust. Four years later, in November, 2008, Zintgraff met with an attorney and executed her Will appointing Bernal as her personal representative and devising all of her tangible personal property and residuary estate to Bernal. The Will provided that she is revoking her trust, the Will does not name or specifically refer to the Renee Zintgraff Revocable Living Trust.

Upon Zintgraff’s death in 2013, Bernal filed an emergency petition for administration seeking to admit Zintgraff’s Will to probate, and alleging that Zintgraff’s real property and the Wells Fargo account were assets of the estate to be distributed pursuant to Zintgraff’s Will. The Will was admitted to probate, and Bernal was appointed personal representative of Zintgraff’s estate. Marin then filed a complaint seeking a temporary injunction and a declaratory judgment finding that the alleged revocation of the Trust in Zintgraff’s Will was ineffectual and that the Trust remained valid. The parties conducted discovery; Marin filed a motion for summary judgment; and after conducting a hearing, the trial court granted Marin’s motion and entered a Final Declaratory Judgment in favor of Marin. The trial court concluded that because Zintgraff’s Will did not specifically name or expressly refer to the Trust or specifically devise her real property and the Wells Fargo account, the Will did not revoke the Trust and Zintgraff’s real property and the Wells Fargo account remained Trust assets to be disbursed according to the Trust. Oscar Bernal (“Appellant”), the named personal representative and beneficiary of Zintgraff’s Last Will and Testament (“Will”), appealed to the Third DCA.

On appeal, the Third DCA noted that the case presented an issue of first impression, with regard to the interpretation of section 736.0602(3), “Revocation or amendment of revocable trust,” which provides that a settlor may revoke or amend a revocable trust: (a) by substantial compliance with a method provided in the terms of the trust; or (b) if the terms of the trust do not provide a method, by a later will or codicil that expressly refers to the trust or specifically devises the property that would otherwise have passed according to the terms of the trust; or any other method manifesting clear and convincing evidence of the settlor’s intent.

The Court noted that it was undisputed that the Trust did not provide a method for revocation and that that Zintgraff’s later Will did not name or expressly refer to the Renee Zintgraff Revocable Living Trust or specifically devise her real property or the Wells Fargo account to Bernal, and therefore, the Will did not comply with subsection (b)(1) of section 736.0602(3). Instead, her Will simply devised all of her tangible personal property and residuary estate to Bernal and declared the Will “to be my Last Will and Testament, revoking all other wills, trust and codicils previously made by me.”

The question that needed to be answered was whether Bernal could rely on subsection (b)(2) which allows for the revocation or amendment of a trust by “[a]ny other method manifesting clear and convincing evidence of the settlor’s intent.” The trial court found that the “[a]ny other method” of revocation permitted under subsection (b)(2) does not include a will that fails to satisfy the requirements of subsection (b)(1). The Third DCA found that such a narrow interpretation of the statute is in conflict with the purpose of revocable trusts and the plain language of the statute. The Court noted that The Florida Supreme Court has specifically recognized that “[a] revocable trust is a unique type of transfer . . . [and] [s]ince [the settlor] is the sole beneficiary of the trust during [the settlor’s] lifetime, [the settlor] has the absolute right to call the trust to an end and distribute the trust property in any way [the settlor] wishes.” Fla. Nat’l Bank of Palm Beach Cnty. v. Genova, 460 So. 2d 895, 897 (Fla. 1985); Siegel v. Novak, 920 So. 2d 89, 95 (Fla. 4th DCA 2006).

Section 330(1) of the Restatement of Trusts (Second) provides that the settlor has the power to revoke the trust if and to the extent that by the terms of the trust he reserved such a power. Comment (i) of section 330 of the Restatement further states that where no method of revocation specified. If the settlor reserves a power to revoke the trust but does not specify any mode of revocation, the power can be exercised in any manner which sufficiently manifests the intention of the settlor to revoke the trust. Any definitive manifestation by the settlor of his intention that the trust should be forthwith revoked is sufficient. See also Euart v. Yoakley, 456 So. 2d 1327, 1329 (Fla. 4th DCA 1984).

Section 736.0602(3) established two methods to revoke or amend a trust that if complied with require no evidence of the settlor’s intent, and retained the “any other method” mechanism for revocation or amendment of a trust previously found in section 330(1) of the Restatement of Trusts (Second). However, if the “any other method” under section 736.0602(3)(b)(2) is alleged, the proponent must not only prove the settlor’s intent, he must do so by clear and convincing evidence.

Thus, in enacting 736.0602(3)(b)(2), the Florida Legislature has: (1) reduced the burden of establishing a revocation or amendment of a trust if the trust provides for a method to revoke or amend or if a later will or codicil complies with the specific requirement of 736.0602(3)(b)(1); and (2) increased the burden when neither of these methods is available by requiring clear and convincing evidence of the settlor’s intent.

The trial court concluded that the Will, as written, does not and cannot satisfy the clear and convincing evidence requirement to revoke or amend the Trust by “any other method.” The Third

 DCA noted that it was true that the Will by itself did not reach the clear and convincing evidence threshold, the Will was not the only record evidence of Zintgraff’s intent. The record also includes the deposition of Sara Saba, the lawyer who drafted the Will for Zintgraff, and an affidavit submitted by Gary Tacon, a “friend and close confidant” of Zintgraff.

Saba testified in her deposition that she was hired by Zintgraff to draft her Will. During their initial meeting, Zintgraff told Saba “that she wanted to leave everything to [Bernal].” When Saba asked Zintgraff if she had executed any prior wills or created any trusts, Zintgraff told her that there were no prior wills but she had a trust which she wished to revoke. She explained that since the creation of her Trust, she had developed a very close relationship with Bernal and the Trust no longer represented her wishes with regard to her property. Zintgraff did not provide Saba with any further details about the Trust or a copy of the Trust, which she explained was in Marin’s possession. Further there was highly compelling evidence of Zintgraff’s intent on the record which reflected that several years after creating her revocable Trust, Zintgraff decided to revoke her Trust and leave all that she had left (her house and the Wells Fargo account) to Bernal who had lived with her and cared for her for many years. To effectuate her wishes, she hired Saba to draft her Will and revoke her Trust. Saba, a lawyer, who had never revoked a trust before, drafted Zintgraff’s Will, included what she believed was the correct language regarding Zintgraff’s intent to revoke her one and only Trust and to leave all of her property to Bernal. Zintgraff was clear and unequivocal when she met with Saba and spoke with Tacon, her friend of forty-four years, that she wanted to revoke her Trust and leave all of her possessions to Bernal. However, because the trial court interpreted section 736.0602 to preclude consideration of evidence manifesting Zintgraff’s intent under section 736.0602(3)(b)(2), this evidence was not considered.

The Third DCA found that such an interpretation of the statute was contrary to the plain language of the statute, the Restatement of Trusts (Second), years of law regarding revocation and amendments to revocable trusts, and “sheer logic.” Section 736.0602(3)(b)(2) provides that a trust may be revoked or amended by “[a]ny other method manifesting clear and convincing evidence of the settlor’s intent.” See also Macfarlane v. First Nat’l Bank of Miami, 203 So. 2d 57, 60 (Fla. 3d DCA 1967)  If Zintgraff had simply written a letter to Tacon telling him that she no longer wanted to leave $5,000 to Lisa Cardozo and the rest of her property to the four entities listed in her Trust, but, instead, wanted to leave everything to Bernal, or she had scribbled the exact same thing on a napkin or a piece of paper and left it in her dresser drawer, then clearly, the “any other method” provision of section 736.0602(3)(b)(2) would be applicable and evidence of Zintgraff’s intent would be admissible. If such evidence clearly and convincingly manifested Zintgraff’s intent to revoke her trust, then Zintgraff’s intent would have been honored. However, under the trial court’s interpretation, a will drafted by a lawyer that was then executed by the testator, witnessed and notarized and that says the same thing, may not be considered.

The Court concluded that a settlor may revoke or amend a trust under subsection (3)(a) by substantially complying with the method provided in the terms of the trust, or under subsection (3)(b)(1), if the terms of the trust do not provide a method, by executing a later will or codicil that expressly refers to the trust or specifically devises the property that would otherwise have passed according to the terms of the trust. Under these two methods, no further evidence is required. However, if the settlor revokes or amends his or her trust under the “any other method” provision under subsection (3)(b)(2), then the settlor’s intent must be established by clear and convincing evidence. Thus, the Third DCA reversed the Final Declaratory Judgment entered in favor of Appellee and remanded for further proceedings.

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.