University of Florida Levin College of Law
Spring 2015
Professor Tritt
Fiduciary Administration
No Book- Statutes/Cases Given By Professor Tritt
FIDUCIARY ADMINISTRATION OUTLINE
PART ONE: PROBATE ADMINISTRATION
Introduction
· Fiduciary Administration:
o This is the flip side of drafting the Will.
o Involves:
§ Interpreting the Will.
§ Interpreting Statutes
o This is the time that the completed Will gets tested.
o For will administration, this is when the validity of a Will is determined, and then dealing with the directions in the Will in order to carry out its wishes.
· Fiduciary: A person who is entrusted with another’s property—A person having a duty to act primarily for another’s benefit in matters connected with such undertaking.
o The term encompasses such notions as: Good Faith, Trust, Special Confidence, and Candor towards another.
A. Brief Overview: Duties and Default Rules
· Me: The duties of PRs and trustees and other fiduciaries are a scheme of default rules that can generally be overridden by the settlor or testator, with few exceptions (See UTC §105, below)
· One mandatory rule that cannot be overridden is the duty of good faith (UPC §3-703 & UTC §801, below) This includes: administering the trust or will:
o In good faith
o In accordance w/ its terms and purposes
o In the best interests of the beneficiaries and
o In accordance with the Code
B. Reasons For Estate Administration
1. Serves to establish title of decedent’s property and provides orderly distribution of Decedent’s Property to successors.
FL §733.103 Effect of Probate
· (1) [Will ineffective until admitted to probate] Until admitted to probate in this state or in the state where the decedent was domiciled, the will shall be ineffective to prove title to or the right to possession of, property of the testator.
· (2) [Probate is evidence of Will’s due execution] In any collateral action or proceeding relating to devised property, the probate of a will in Florida shall be conclusive of its due execution; that it was executed by a competent testator, free of fraud, duress, mistake, and undue influence and that the will was unrevoked on the T’s death.
o This is important because once the Will has been admitted to probate all Will contests are over (IT IS A RACE!)
2. Commences Statute of Limitations on Decedent’s Debts
FL §733.702(1) Limitation on Presentation of Claims
· (1) If not barred by §733.710: [Claims barred by Statute of Limitation]:
o No claim or demand against the decedent’s estate that arose before the death of the decedent, including claims of the state and any of its political subdivisions, even if the claims are unmatured, contingent, or unliquidated;
o No claim for funeral or burial expenses;
o No claim for personal property in the possession of the personal representative; and
o No claim for damages, including, but not limited to, an action founded on fraud or another wrongful act or omission of the decedent, is binding on: The estate, The PR, or any beneficiary
§ Unless filed in the probate proceeding on or before the later of: [statute of limitations]:
· The date that is 3 months after the time of the first publication of the notice to creditors or,
· As to any creditor required to be served with a copy of the notice to creditors, 30 days after the date of service on the creditor, even though the personal representative has recognized the claim or demand by paying a part of it or interest on it or otherwise.
o The personal representative may settle in full any claim without the necessity of the claim being filed when the settlement has been approved by the interested persons.
FL §733.710 Limitations on Claims Against Estates
· (1) [No liability >2 years after death] Notwithstanding any other provision of the code, 2 years after the death of a person, neither the decedent’s estate, the PR, if any, nor the beneficiaries shall be liable for any claim or cause of action against the decedent, whether or not letters of administration have been issued, except as provided in this §
· (2) [Exception for unpaid creditor who made claim <2 years b4 death] This § shall not apply to a creditor who has filed a claim pursuant to §733.702 within 2 years after the person’s death, and whose claim has not been paid or otherwise disposed of pursuant to §733.705
· (3) [Exception for liens] This § shall not affect:
o The lien of any duly recorded mortgage or security interest or
o The lien of any person in possession of personal property or
o The right to foreclose and enforce the mortgage or lien.
3. Facilitates Collections of Debts and Assets
4. Provides Method of Determining and Paying Taxes
· Tritt: This is a federal government view. Florida does have an estate and gift tax, but it is 0.
I. Initial Interview With Client
1.) Meet with the family
· Tritt likes to talk to the PR or family power player before the funeral
· At the funeral have the family meeting about the estate where you can bring papers for them to sign knowing the whole family will be present.
o Probably should not bill for time spent at the funeral.
2.) Sign retainer
· Also Have family sign waivers that you represent the estate, and not the beneficiaries
· If they are hesitant, recommend to them that they seek counsel Try and get as much done as you can.
3.) Assemble contact information
· Get everyone’s information and birth dates because there are tax implications depending on when each person was born
Note: When the family first contacts you, as decedent’s lawyer, they will assume you are the estate’s lawyer, but you need to tell them you are not. The PR hires the lawyer for the estate, and a PR has not been appointed yet.
II. Pre-Probate
A. When Do Fiduciary Duties and Powers Commence?
UPC §3-701 Time of Accrual of Duties and Powers
· [When] The duties and powers of a PR commence upon his appointment. (When Letters Testamentary).
· [Relate Back?] The powers of the PR relate back in time to his acts (if beneficial to the estate) occurring prior to his appointment. (Comments: Relates back to death).
· [Acts Prior To Appointment] Prior to the appointment, a person named executor in a will (nominated executor) may carry out written instructions of the decedent relating to his body, funeral and burial arrangements.
· [Ratifying Acts of Others] A PR may ratify acts on behalf of the estate done by others, where acts would have been proper for the PR.
FL §733.601 Time of Accrual of Duties and Powers
· [When] The duties and powers of a PR commence upon appointment.
· [Relate Back?] The powers of the PR relate back in time to his acts (if beneficial to the estate) occurring prior to his appointment.
· [Ratifying Acts of Others] A PR may ratify acts on behalf of the estate done by others, where acts would have been proper for the PR.
FL §732.804 Provisions relating to the Disposition of the Body
· Before issuance of letters, ANY person may carry out written instructions of the decedent relating to the decedent’s body and funeral and burial arrangements. The fact that cremation occurred pursuant to a written direction signed by the decedent that the body be cremated is a complete defense to a cause of action against any person acting or relying on that direction.
B. Death of Client/ Proof of Death (issue arises b/c when someone dies, assets are froze)
UPC §1-107 Death or Status
· (1) [When Dead] Death occurs when an individual has sustained either:
o (i) Irreversible cessation of circulatory and respiratory functions or
o (ii) Irreversible cessation of all functions of the entire brain, including the brain stem.
§ Must be made in accordance w/ accepted medical standards.
· (2) [Death certificate as evidence] A certified/authenticated copy of a death certificate is prima facie evidence of the fact, place, date, and time of death and the identity of decedent.
· (3) [Report of Gov’t Agency as evidence] A certified/authenticate copy of any record/report of any gov’t agency (domestic or foreign) that an individual is missing, detained, dead, or alive is prima facie evidence of the fact, place, date and time of death and the identity.
· (4) [If no Prima Facie Evidence] In the absence of (2) or (3), the fact of death may be established by clear and convincing evidence, including circumstantial evidence.
· (5) [5 years of absence] If death of an individual is not established under preceding ¶s, but he has been absent for a continuous period of five years, not heard from, and whose absence is not satisfactorily explained after diligent search or inquiry, is presumed dead.
o [Presumed date of death] His death is presumed to have occurred at the end of the period unless there is suffi
ority. A lessor making delivery pursuant to this section shall maintain in its files, a receipt executed by such PR, which itemizes all property so delivered.
· (3)
· (4) A lessor is not liable for damages or penalty by reason of any delivery made pursuant to this section.
FL §655.937 Access to Safe-Deposit Boxes leased in two or more names
· (1) [If box in two or > names, who gets access] Unless specifically provided in the lease or rental agreement to the contrary, if1 a safe-deposit box is rented or leased in the names of two or more lessees, access to the safe-deposit box will be granted to:
o (a) Either or any of such lessees, regardless of whether or not the other lessee or lessees’ or any of them are living or competent.
o (b) §655.933
o (c) §655.935
o (d) Subject to §733.6065, the PR of the estate of either lessee who is deceased, or the guardian of the property of either lessee who is incapacitated.
· (2) [Release and discharge for lessor In all cases described in (1), the signature on the safe-deposit entry or access record, or the receipt or acquaintance, in the case of property or documents otherwise held for safekeeping, is a valid and sufficient release and discharge to the lessor for granting access to such safe-deposit box or for the delivery of such property or documents otherwise held for safekeeping.
· (3) [No liability for Lessor] A lessor may not be held liable for damages or penalty by reason of any access granted or delivery made pursuant to this §
· (4) [Does not affect right of Co-Lessee] The right of access by a co-lessee is separate from the rights and responsibilities of other persons who may be granted access to a safe-deposit box after the death or incapacity of another co-lessee, and such right of access is not subject to requirements imposed upon PRs, guardians, or other fiduciaries.
· (5) [Right to make inventory] After the death of a co-lessee, the surviving spouse or any other person who is granted access to the safe-deposit box pursuant to this section may make a written inventory of the box, which must be conducted by the person making the request in the presence of one other person as specified. Each person present shall verify the contents of the box by signing a copy of the inventory under penalty of perjury.
o (a) [If requestor is surviving co-lessee] If the person making the written inventory is a surviving co-lessee, the other person may be any other person granted access pursuant to this section, an employee of the institution where the box is located, or an attorney licensed in this state.
o (b)[If requestor not surviving co-lessee] If the person making the written inventory is not a surviving co-lessee, the other person may be a surviving co-lessee, an employee of the institution where the box is located, or an attorney licensed in this state.
D. Disposition of the Body
· Determine whether the decedent made pre-need funeral arrangements (contracts).
· The nominated PR in the Will may carry out written instructions of the decedent relating to his body and funeral arrangements. (UPC §3-701)
· Every Floridian has a statutory right to prepare a burial declaration (FL §497.005(39)) by writing an inter vivos authorization and direction for their own burial plans.
o The law does not state whether a direction in a Will is allowed for this purpose. A will is testamentary in nature and is not effective until death. Since the law requires an inter vivos direction a direction in the decedent’s will might not be valid.
§ Even if instructions were in the Will, probate takes a long time, so we normally do not have a valid will to look to until after long after the funeral.