Trust Agreement Codicils and Indeterminate Language

Earlier this month in an opinion filed by the Third District Court of Appeal of Florida (“3d DCA”), Kritchman v. Wolk, 2014 Fla. App. LEXIS 15266 (Fla. 3d DCA 2014) illustrated that trust language should always be as explicit and narrow as possible. Although affirming a breach of trust by the co-trustee’s and awarding the plaintiff damages, the 3d DCA reversed in part a judgment and held that a promise of an indeterminate amount for an indeterminate number of years of graduate school, commencing at an indeterminate time, ran afoul the Statute of Frauds.

The case arose from a magnanimous settlor, Mrs, Lola Kritchman’s (“Lola”), and gifts to pay certain educational expenses of her first cousin’s grandson, Mr. Wolk.  Upon her death, Lola’s son, Mr. Kritchman, along with the Wells Fargo, the co-trustee became in charge of her trust and appealed the trial court’s final order.  The trust agreementspecified that, during Lola’s lifetime, the trustee was to “pay such sums from principal as [Lola] may direct at any time.”  The record established that Lola directed Wells Fargo to make payments for Mr. Wolk’s private school for seven years in Miami, and his tuition, room, and board for his first two years as an undergraduate at Yale.  During his sophomore year in 2010, Lola signed and delivered a letter to her trust officer at Wells Fargo stating:

As you know, I have agreed to pay for Hunter’s college education at Yale, as I have for the last 2 years. Thank you for your assistance with the logistics. He will be beginning his junior year in September 2010 and his senior year in 2011. Please make arrangements so that his costs will be paid for those 2 years as well. The cost for his junior year is forty nine thousand eight hundred dollars, which you will see when the school sends its documentation in the next month or so.

Thank you for taking care of this on my behalf. Sincerely, [/s/ Mrs. Lola Kritchman]

Consistent with its expressed terms, Wells Fargo paid Mr. Wolk’s expenses at Yale for the fall semester of his junior year, but failed to comply with the directive fully, which required them to make arrangements so that his costs for junior and senior year would be paid for.  Wells Fargo did not pay for Mr. Wolk’s tuition and expenses for his last three semesters at Yale, nor were arrangements made.  Lola died on November 8th, 2010, before Mr. Wolk’s junior year.  Thereafter, Mr. Kritchman disagreed regarding his mother’s last will and testament, and countermanded her written instructions to Wells Fargo in order to stop payment.  Moreover, in Mr. Wolk’s suit, he further claims reimbursement for future graduate school expenses based on a broad definition of “education,” in the trust agreement.  However, the agreement itself did not include specific gifts for “education,” and Lola did not issue any directive regarding graduate school expenses. 

On appeal, the 3d DCA agreed with the trial court, and reasoned that Wells Fargo was obligated to carry out Lola’s written directive, and to make arrangements to pay Mr. Wolk’s last three semesters at Yale even though the language was not in her trust, the instructions were consistent with it.  Wells Fargo’s attempt to impose additional procedural requirements, none of which were set forth in the trust agreement, was unavailing.  The 3d DCA illustrated that the real reason Wells Fargo did not pay for Mr. Wolk’s expenses was that it was to the detriment of Mr. Kritchman.  They failed to comply with the express terms of the written directive of the trust, and therefore violated Fla. Stat. §§ 736.0801, .0803, .0804 (2010), and consequently, established the liability of the co-trustees for a breach of trust.  However, regarding the issue of future expenses, the trust agreement did not include any such gift or provision for the benefit of Mr. Wolk, despite its broad definition of “education.”  As stated by the 3d DCA, “A promise of an indeterminate amount, for an indeterminate number of years of graduate school, commencing at an indeterminate time, runs afoul of the Statute of Frauds.”  Therefore, the Court reversed part of the trial court judgment that included an award for graduate school expenses “to be determined.”

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.