A Palm Beach County man who was a beneficiary under an amended trust established by his father challenged the trust’s validity and faced potential dismissal of his suit for failure to return money given to him by the trustee, his father’s surviving wife. Gossett v. Gossett, 182 So. 3d 694, 695 (Fla. 4th DCA 2015).
This case illustrates a principle of law dating back in this country to a New Hampshire case from 1833 which imported the law from English ecclesiastical court rulings. The principle is referred to as the “renunciation rule,” which holds generally that a recipient of a benefit through a trust must “do equity” by returning the benefit and renouncing that recipient’s interest before he or she can be permitted by a court to challenge the validity of the trust (i.e., a person cannot keep and enjoy the benefits of a trust that he or she seeks to invalidate).
In Gossett, the son received the benefits originally while in financial duress and was unable to return them prior to initiating the case to overturn the amended trust (actually, the fourth and fifth amended versions). However, he argued—and the court agreed—that, since he was entitled to that amount (or more) under the versions of the trust he believed were valid, he did not have to return the funds.
In reaching its decision, the Fourth DCA reasoned that the son’s situation in Gossett was similar to that of a self-settled trust, whereby the interest in the money that was not being ‘renounced’ derived not from the trust itself, but from the settlor’s ownership of the assets and the fact that he was the sole beneficiary (a commonly invalidated trust arrangement). Potentially strained logic aside, the court found that, regardless of which version of the amended trust was upheld (everyone agreed that at least some version was valid), the son was entitled to the money and, therefore, should not have to return the funds. This finding represented a potential departure from over two hundred years of precedent on this issue.
As the Gossett case illustrates, trusts and estate planning can be convoluted and confusing to those without the training and experience to navigate the process. Inconsistency and lack of clarity can cause strife that potentially rips families apart after a loved one passes. It is crucial to get sound advice from a trusted counselor who can help establish a clear and enforceable estate plan. Talk to our trusted estate planning attorneys at Icard Merrill today to find out more.
Michael L. Foreman, an attorney and shareholder at Icard Merrill, was a featured presenter at the 2014 Bench Bar Conference.
The theme of this year’s conference focused on current issues related to civility and professionalism within the legal industry.
Mr. Foreman focuses in probate, estate planning and guardianship law and his discussions as a member of the panel dealt specifically with professionalism and civility within those areas of law.
Mr. Foreman highlighted frequent areas of professional and ethical violations for probate, estate planning, and guardianship attorneys. A unique situation that Mr. Foreman discussed was dual representation in the “second marriage” situation. One of Mr. Foreman’s pieces of advice was to make a “loud exit” by withdrawing if either party attempts ex-parte communication.
When discussing civility in communication with other attorneys, Mr. Foreman’s advice was to “put in writing, sleep on it before you send it, keep the big picture in mind, and use the Golden Rule.”
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