October 27, 2009
Previously published on October 22, 2009
Helen Wedell executed and transferred her assets to a revocable trust during her lifetime. The trust provided for the distribution of the trust assets among her three sisters, after her death.
After Ms. Wedell's death, one of her sisters, Liz, as trustee of the trust, filed suit against another sister, Agnes, alleging that weeks prior to Ms. Wedell's death, as a result of undue influence by Agnes, Ms. Wedell removed assets from the trust and transferred them to Agnes or accounts in Agnes's name. The trial court dismissed the claim on the basis that the decision of the Florida Supreme Court in Florida National Bank of Palm Beach County v. Genova barred an undue influence challenge to a settlor's removal of funds from her revocable trust.
On appeal, the Court of Appeals affirmed the dismissal of the claims, noting that a settlor, prior to her death, has the right to revoke the trust in the absence of a judicial determination or medical certification of her physical and mental incapacity. The court also noted that revocable trusts are unique types of transfers where the settlor retains the right to regain absolute ownership of the trust property, which is distinguishable from other types of conveyances where claims for undue influence might apply, such as gifts, deeds, wills, and contracts.
The court also noted that the courts "have no place in trying to save persons…from what may or may not be her own imprudence." The court affirmed the trial court's holding that "even after the settlor's death, the settlor's revocation of her revocable trust during her lifetime is not subject to challenge on the ground that the revocation was the product of undue influence."
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