In Blackburn v. Boulis, 2016 Fla. App. LEXIS 716 (Fla. 4th DCA 2016), the Fourth DCA held that the probate court properly ordered personal representatives to pay interest on a percentage of the court-determined minimum value of the surviving spouse’s elective share from the date of the initial valuation. The Court reasoned that it would have been inequitable for the spouse to have been denied the opportunity for a reasonable return on her minimum elective share. The subject case involves two appeals regarding payment of a surviving spouse’s elective share.
In the first appeal, Ace J. Blackburn, Jr. and the other named personal representatives of the estate of Konstantinos Boulis, a/k/a Gus Boulis (“PRs” and “Appellants”) challenged probate court orders directing them to pay interest on forty percent of the court-determined minimum value of Spouse’s elective share from the date the court made its initial valuation. Spouse cross-appealed, arguing that the probate court reversibly erred by assessing interest on only forty percent of the minimum elective share. In the second appeal, Spouse argued that the probate court reversibly erred by allowing the PRs to deduct from the minimum elective share a proportionate amount for the fees charged by lawyers hired by the PRs to litigate estate claims.
The probate court rendered various orders concerning the valuation of Spouse’s elective share. The order rendered November 18, 2010 entitled “Interim Order Determining Minimum Value of Elective Share and Directing Partial Distribution” was the key interlocutory step which gave rise to the issues on appeal. Failure to utilize the right to take an interlocutory appeal does not restrict the scope of appellate review when the final order is appealed. Fla. R. App. P. 9.170(b)(16) and (e). Thus, the Fourth DCA was able to review the November 2010 valuation order for an abuse of discretion.
In the November 2010 interim order, the probate court determined that the value of Spouse’s minimum elective share was twelve-and-a-half million dollars and ordered that assets of that value be distributed by the estate to Spouse or her qualified domestic offshore trust. It also expressly ordered that the minimum value was to bear interest at the statutory interest rate from the date of the order. The PRs did not distribute the minimum value of the elective share to Spouse until a few years later, resulting in a partial summary judgment directing the PRs to pay Spouse interest on forty percent of the minimum value of the elective share, dating back to the November 2010 valuation order. The Court noted that it would be inequitable for Spouse to be denied the opportunity for a reasonable return on her court-determined minimum elective share. However, it would have been inequitable for Spouse to enjoy a windfall of interest on a portion of the value of her minimum elective share which, due to taxes, she would not be entitled to retain. Thus, the Court held that the probate court did not abuse its discretion and was within its authority to exempt from interest-assessment sixty percent of the minimum elective share value.
The second appeal concerned the court’s April 2014 order of distribution in which the court charged a portion of the attorneys’ fees incurred by the estate in litigating claims against Spouse’s elective share. The purpose of the elective share statute is to ensure provision for a surviving spouse’s needs. The applicable statute for Spouse’s elective share provides that the elective share shall consist of an amount equal to thirty percent of the fair market value, on the date of death, of all assets referred to in Section 732.206, Fla. Stat., computed after deducting from the total value of the assets. The assets include, (1) all valid claims against the estate paid or payable from the estate; and (2) all mortgages, liens, or security interests on the assets. Section 732.207, Fla. Stat. (1998).
The Court noted that it is unquestionable that the Legislature is presumed to know the meaning of words it uses in laws it enacts. Therefore, courts must look to the plain meaning of the language in the statute. The statute noted above unambiguously sets forth only four types of expenses or costs which the probate court is to deduct from the value of the assets in the surviving spouse’s elective share. Attorneys’ fees are not listed. Therefore, the probate court reversibly erred by deducting attorneys’ fees from the value of Spouse’s elective share. The Court reasoned that if the Legislature had intended to allow a probate court to deduct attorneys’ fees paid by an estate’s personal representative(s) in litigating claims from the surviving spouse’s elective share, it would have done so. In turn, the Fourth DCA reversed and remanded the case for the court to recalculate the value of Spouse’s elective share to exclude the PRs’ attorney’s fees and affirmed in all other respects.
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