PBCBA BAR BULLETINS PBCBA Bulletin - February 2020 | Page 16

PROBATE CORNER
Oral Trusts Of Personal Property
(Part II/Case Summaries) (continued)
DAVID M. GARTEN
In Calderόn v. Vazquez , 251 So. 3d 303(Fla.
3rd DCA 2018), René obtained a life
insurance policy on his life and designated
his brother Juan as the beneficiary of the
policy. He made it clear to Juan that the
proceeds of the policy were to be held in
trust by Juan for his wife and son for their
education and living expenses after René's
death. René also left a will referencing the
policy and that the purpose of the policy
was to ensure the education and living
expenses of his wife and son. René passed
away and Juan received the full proceeds of
the policy. Over the next nine years, Juan
made distributions to René’s wife and son
for their education and living expenses.
When René’s wife and son asked Juan to
deliver the balance of the proceeds, Juan
refused and claimed that the funds are
his. The issue presented to the court was
whether Juan, by agreement or operation
of law, became a trustee with respect to the
proceeds paid over to him as designated
beneficiary. The lower court dismissed the
complaint with prejudice and the appellate
court reversed and remanded for further
proceedings consistent with their opinion.
In Estate of Craft, 320 So. 2d 874 (Fla. 4th
DCA 1975), the court held that that there
was sufficient evidence to give rise to the
establishment of a valid oral trust. First, the
words giving rise to the trust were reflected
in a will and trust which were mailed to and
received by the trustee bank. Second, the
object of the trust was clearly reflected in
the trust as providing an education for the
children and grandchildren of the decedent.
And third, the subject matter of the trust was
in existence at the time of the execution of
the new will, and creation of the new trust
and was ascertainable with reasonable
certainty through the testimony of the trust
officer of the trustee bank and the writings
of the decedent. Further indication of the
sufficiency of the words to create the trust
was reflected by a telephone conversation
between decedent and a trust officer of the
trustee bank on directing the cancellation
of the old trust and the creation of the new
one, and a letter of confirmation written by
decedent to the trustee bank pursuant to
which the bank transferred the assets on
its books to the new trust. The court found
that the procedures followed by the trustee
bank in facilitating the establishment of the
new trust cannot serve to defeat the validity
of the trust if all other requisites necessary
to its establishment of the oral trust were
properly present.
In Estate of Pearce , 481 So. 2d 69 (Fla. 4th
DCA 1985), the co-personal representative,
John F. Pearce (“JP”), sought leave to file
an amended inventory determining that
certain stock was held by decedent as
trustee and not individually. When the
lower court granted JP’s request, the other
co-personal representative, Dewitt L. Pearce
(“DP”), appealed the removal of the stock
from the probate inventory maintaining
that the plain language of the stock
certificates indicated that they were issued
to the decedent, individually. The appellate
court, in affirming the lower court's
judgment, found, in part, as follows: the
decedent transferred certain real property
to her revocable trust. Thereafter, she
formed a corporation and transferred the
real property to the corporation. The estate
plan involved converting the real property
into shares of stock (personal property)
and then issuing the shares to herself, as
trustee of her revocable trust. The shares
of stock were mistakenly issued to the
decedent, individually and not as trustee.
The decedent subsequently executed an
amendment to her revocable trust wherein
she listed the stock as an asset of the trust.
Before and after issuance of the stock, the
decedent orally declared she was holding
the stock in trust and that she had instructed
her attorney to prepare the necessary legal
documents to transfer the stock to her
trust. The decedent’s attorney testified
that title to the stock should have been
issued to the decedent as trustee, that the
issuance to the decedent in her individual
name was a mistake, and that he accepted
responsibility for this mistake. The attorney
further testified that he was responsible
for including the stock on the probate
inventory and this, too, was a mistake.
The court held that while the meaning of
a written document generally should be
determined solely from the language of the
instrument where such language was clear,
parol evidence could serve to establish
a trust in personalty. The parol evidence
in this case was not offered to change the
terms of a written contract; it was utilized to
establish a trust in personalty. The evidence
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was introduced to demonstrate further that
the stock certificates were the corpus or
res of the trust. The court reasoned that “[o]
f course, looking at the stock certificates
alone one would assume that they were
owned individually by Mrs. Pearce, but
an examination of the amendment to the
trust and the oral declarations made after
issuance of the stocks indicate that the
stocks were held in trust, as found by the
trial court.”
In Spearman v. Estate of Spearman , 618 So.
2d 276 (Fla. 4th DCA 1993), the personal
representative (“PR”) of the estate of the
deceased former husband brought an
action against the former wife alleging
conversion and seeking an accounting of
$984,000 allegedly transferred to her during
his lifetime. The PR alleged the existence
of a trust in which the corpus was to be
held by the former wife for the use and
benefit of her husband during his lifetime
and who was incarcerated at the time such
funds were transferred. The trial court
determined that the former wife received
the money for the use and benefit of her
husband and that it was not intended as a
gift to the former wife. The appellate court
reversed and held that in all cases wherein
relief is predicated upon an oral agreement
for an express trust in personalty, proof of
such an agreement or of such facts must
be weighed cautiously and should be clear,
positive and unequivocal, citing, Columbia
Bank for Cooperatives v. Okeelanta Sugar
Cooperative , 52 So. 2d 670 (Fla. 1951). Here,
the PR presented no direct evidence in
support of its claim that the former wife
held the money as trustee for her husband
during his lifetime and that the record
contains no other evidence from which
the trial court could have determined the
existence of a trust.