POD Designation Properly Invalidated Where Personal Representative Failed to Prove that POD Designation was not Obtained by Undue Influence

In Keul v. Hodges Blvd. Presbyterian Church, 2015 Fla. App. LEXIS 17713 (Fla. 1st DCA 2015), the First DCA found that the trial court properly invalidated, under Section 733.107, Fla. Stat., a payable-on-death (POD) designation because the personal representative failed to prove that the POD designation was not obtained by undue influence. In the subject case, Mrs. Lampp and her late husband executed a family trust and pour-over wills several months before Mr. Lampp died. The trust provided that, if Mr. Lampp died first, then upon Mrs. Lampp’s death, the entire estate would go to Hodges Boulevard Presbyterian Church. When she died, Mrs. Lampp had $333,497.56 in Navy Federal Credit Union accounts that she had jointly owned with her husband. Two disinterested witnesses testified that it was Mrs. Lampp’s intention to leave the entire estate to the church. No document existed to the contrary, until a few days before Mrs. Lampp (“Decedent”) died. A few days before she died, Decedent’s neighbor, health care surrogate, and attorney in fact, Pennie Keul (“Appellant”) alleged that Decedent had asked her to help her get a POD form to change her beneficiary to leave all of her assets to the Appellant and her family. After Decedent passed, the church objected to such and sought to remove Appellant as personal representative, arguing that Appellant failed to include the credit union accounts in the inventory.

The trial court entered an order requiring Appellant to return to the estate funds disbursed from Mrs. Lampp’s credit union accounts. The trial court invalidated the POD designation by which the funds were disbursed to Appellant and her family on grounds that Appellant had obtained the POD designation through undue influence. The trial court found that she had used her confidential relationship with Decedent and actively obtained the POD designation so the court invalidated the POD designation accordingly. Appellant appealed the trial court’s opinion, arguing that a POD designation cannot, as a matter of law, be invalidated for undue influence. Appellant further asserted that the trial court erred by requiring Appellant to return the funds to the estate instead of entering a money judgment against Appellant in the amount of the disbursed funds.

On appeal, the First DCA rejected Appellant’s arguments and affirmed the ruling of the trial court.  It found that Florida has a legitimate public policy interest in preventing the abuse of confidential relationships. See Section 733.107, Fla. Stat. The court rejected Appellant’s assertion that a POD designation cannot be invalidated for undue influence by noting that a banking regulatory statute need not expressly address grounds for invalidating a POD designation. See Seymour v. Seymour, 85 So. 2d 726, 727 (Fla. 1956). The court explained that even though a POD designation is an inter vivos transfer, it has the characteristics of a testamentary transfer since it has no effect until the death of the owner. Therefore, under Florida law, it is subject to challenge on grounds such as undue influence. The First DCA agreed with the trial court’s conclusion that Appellant failed to prove that the POD designation was not obtained by undue influence and that even if the burden of proof had remained with the church, the church had met its burden of proving undue influence which invalidated the POD designation. The First DCA further held that the trial court did have the authority to order Appellant to return the funds to the estate, pursuant to Section 733.812, Fla. Stat.  A court order which justifies a finding of civil contempt which may lead to incarceration is not an unconstitutional remedy.

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.