Can a person under a guardianship create or amend a trust? That is the question posed by two recent Florida cases, Jervis v. Tucker and Jasser v. Saadeh. 82 So.3d 126 (Fla. 4th DCA 2012) and Case No. 4D09-3974 (Fla. 4th DCA July 18, 2012).
In Jervis, Ms. Meikle was under a plenary guardianship with her brother serving as her guardian. Prior to her guardianship, Ms. Meikle executed a revocable trust. After the imposition of the guardianship, Ms. Meikle signed an amendment to her trust which drastically changed the disposition of her estate. After she died, the beneficiaries under the original trust sued to have the amendment declared void, arguing that she was incapacitated at the time it was signed. The guardian, who stood to benefit from the amendment, argued that although she was under a guardianship at the time the amendment was signed, Ms. Meikle had the testamentary capacity necessary to execute the trust amendment.
Under the terms of the original trust, if there was a question of capacity, the trust could be amended if the Trustee received opinions from two licensed physicians who have examined the Grantor. Here, the Trustee received opinions from Ms. Meikle’s treating physician and from a licensed nursing home health care administrator that Ms. Meikle had testamentary capacity when the amendment was signed. The court held that the second opinion from the nursing home health care administrator did not qualify as an opinion from a “licensed physician” and concluded that the trust amendment was invalid.
In the case of Jasser v. Saadeh, Mr. Saadeh was a widower in his eighties who began dating a younger woman. Mr. Saadeh loaned money to his girlfriend, upsetting his children. The children brought a petition to determine him to be incapacitated and the court appointed an emergency temporary guardian. In the days and weeks that followed, the parties reached an agreement whereby the guardianship petition would be dismissed if Mr. Saadeh created a trust with his children serving as co-trustees. Mr. Saadeh was persuaded that this would be the best option for him, so he signed the trust.
Of note in this case is that two rounds of examining committees were ordered. Five out of the six examining committee members found that Mr. Saadeh did not need a guardianship and had full capacity. Thus, the guardianship proceedings were dismissed and Mr. Saadeh sought to have the trust declared void.
In ruling on the issue of whether the trust was valid, the court determined that because Mr. Saadeh was under an emergency temporary guardianship and his right to contract had been removed, the trust was void.
The interesting contrast between these two cases is that in Jervis, the court was willing to entertain the argument that if testamentary capacity could be shown, then the trust amendment would be valid. In Jasser, the court concluded that the plain fact that a guardianship was in place meant that any trust signed by the ward was invalid, even though five out of the six examining committee members concluded that Mr. Saadeh had full capacity when the trust was signed. The Jervis court used testamentary capacity to determine the validity of the trust and the Jasser court used contractual capacity to determine the validity of the trust. Why? Reading these two cases together begs the question, under what circumstances can an adult ward of a guardianship to create or amend a trust? This is certainly one of life’s great mysteries.