Can a Mistake of Law Allow for Reformation of Trust Documents?

In Kelly v. Lindenau, 223 So. 3d 1074 (Fla. 2nd DCA 2017), the Court addressed whether an improperly executed trust amendment can be validated through reformation pursuant to Section 736.0415, Fla. Stat. A trust—or an amendment thereto—must be signed by the settlor in the presence of two attesting witnesses and those witnesses must also sign the trust or any amendments in the presence of the settlor and of each other. See Sections 736.0403(2)(b), Fla. Stat.; 732.502(1)(b)-(c), Fla. Stat. In Allen v. Dalk, 826 So. 2d 245, 247 (Fla. 2002), the Court explained that strict compliance with statutory requirements for execution of a will is mandated in order to create a valid will and recognized that absent the requisite formalities, a will “will not be admitted to probate”. The Court in Crawford v. Watkins, 75 So. 2d 194,197-98 (Fla. 1954), explained that the signature of an attesting witness serves “as testimony of the fact that all legal steps necessary to make the will a legal instrument have been taken by the testator.” So, where a testator, or a settlor in the case of a trust, fails to strictly comply with the statutory requirements for valid execution of the relevant document, the document remains invalid and unenforceable. Id.; see also Aldrich v. Basile, 136 So. 3d 530, 533 (Fla. 2014) (explaining that codicil that was only signed by one witness “was not an enforceable testamentary instrument under the Florida Probate Code”); Allen, 826 So. 2d at 248 (expressly refusing to impose a constructive trust over estate assets—despite the testator’s clear intent as stated within the will—where the testator failed to sign the will, a “major requirement for a validly executed will”).

The decedent, Ralph Falkenthal, validly executed a trust in Illinois in 2006. The trust evenly distributed the assets to Ralph Falkenthal’s three children: Jill Kelly, Jeff Falkenthal, and Judy L. Mors-Kotrba, the appellants. In 2009, the decedent met Donna Lindenau, the appellee, and in 2010 the decedent bought a house in Bradenton and moved in with the appellee. On December 18, 2014, the decedent executed a second amendment that modified the trust to provide for a specific devise of the Bradenton residence to the appellee.  At the time of execution of both the first and second amendments, the decedent resided in Florida. Both amendments were prepared by the decedent’s Illinois attorney, and the parties have not disputed the appellee’s assertion that the amendments were prepared in accordance with Illinois law. Even though the amendments were executed in the presence of two witnesses, they were only signed by one of the witnesses. The decedent died on February 7, 2015, making the trust irrevocable. Judy petitioned for a declaratory judgment in her capacity as successor trustee of the trust. Judy claimed that the two amendments to the trust were not signed by two witnesses as required by Florida law, making the amendments invalid. Appellee then filed a counterclaim seeking reformation of the trust in relation to the second amendment. Appellee argued that the decedent’s intent was clear and therefore she should be allowed to reform the trust to make it comply with Florida law. The trial court granted appellee’s reformation request pursuant to Section 736.0415, Fla. Stat.

The Second District Court of Appeal relied on Allen v. Dalk. The court in Allen refused to impose a constructive trust because the testator had failed to comply with a “major requirement for a validly executed will” (i.e., the testator’s signing of it) and thus “[a]n order imposing a constructive trust under these facts would only serve to validate an invalid will.” Allen, 826 So. 2d at 248. The fact that the decedent’s intent to give the Bradenton house to the appellee is not disputed; however, the issue is the validity of the trust amendment. The Second District Court of Appeals held that the imposition of a constructive trust is inappropriate when the trust has not been validly executed.

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.