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When you have a loved one who cannot always make their own decisions, there is a constant fear that someone will take advantage of them. Ailing people may be convinced, pressured, or guided to sign things they don’t understand, including trusts. No trust like that is legally valid, but that does not stop unscrupulous people from trying.
What can you do if you believe your loved one created a trust under pressure from someone else—or even when they had no mental capacity to do so?
Mental Capacity in Florida Law
In Florida, a settlor—the creator of a trust—must have capacity in order to create a valid trust. Florida courts treat the capacity to create a trust in much the same way as the capacity to create a will.
The settlor of a trust must understand:
- the nature and extent of the property they are disposing of;
- their own relationship to “those who would naturally claim a substantial benefit” from their estate, such as family members; and
- “a general understanding of the practical effect” of the trust.
See Raimi v. Furlong (Fla. 3d DCA 1998). An elderly or medically frail person, whether or not they have a dementia diagnosis, might be unable to perceive one or all of these.
Florida law can also reject a trust made because of an “insane delusion”—a “spontaneous” idea with “no real existence except in imagination.” See Miami Rescue Mission, Inc. v. Roberts (Fla. 3d DCA 2006). In that case, a heavily medicated patient became convinced that her longtime friend stole from her and let her dog die—neither of which had happened. She revoked her will to disinherit her friend, but a Florida court later rejected that revocation and the new will she made while suffering from the delusions.
However, it is not easy to challenge capacity. The matter at issue is the settlor’s mental condition at the time they created the trust, not their condition in general. Even someone diagnosed with dementia may have lucid moments or “good days” that allow them to act with sufficient capacity to create a will or trust.
Furthermore, a bad or unpopular choice is not the same as an insane delusion. Anyone challenging the creation of a trust must provide strong evidence of the settlor’s condition and state of mind.
Undue Influence on Trusts in Florida
If a settlor creates or revokes a trust (or part of a trust) through the undue influence of another person, it will be void. See Fla. Stat. § 736.0406. Courts also view undue influence on trusts through many of the same principles that apply to wills.
Establishing undue influence is a complex matter, almost always based on circumstantial evidence. To begin with, a challenger must first prove to the court that the alleged influencer was a “substantial beneficiary” of the settlor’s actions. This person must also have had a “confidential relationship” with the settlor as a caregiver, relative, professional advisor, or trusted friend.
Finally, they had to be “active in procuring” the settlor’s trust creation. See In re Estate of Carpenter (Fla. 1971). The Carpenter case established several factors for defining active procurement. A court will consider that a favored beneficiary actively procured a trust if they:
- Were present when the settlor expressed a desire to create a trust
- Recommended an attorney to draft the trust
- Knew the contents of the trust
- Gave instructions about preparing the trust to the attorney
- Secured any witnesses to the signing
- Were present at the creation of the trust
- Retained the trust instrument for safekeeping
It is unnecessary to show that all of these things happened to demonstrate active procurement. Courts look for them, however, since they often serve as red flags of undue influence.
After establishing these facts around the creation of the trust, the challenger must still show further elements in the relationship that led to undue influence, such as:
- Inequality between the mental states of the favored beneficiary and the settlor. Someone suffering limitations from illness, frailty, or imposed ignorance is often no match for a loved one who is healthier and more mentally acute.
- Efforts to isolate the settlor from family, friends, or others in their life. A caregiver or confidential friend can physically cut off a vulnerable person. They may also lie, exaggerate, and otherwise poison their relationships with loved ones to create emotional dependency.
A court will also consider a strange or uncharacteristic decision to give assets away by creating a trust. Of course, everyone has the right to make unexpected decisions about their property. But if the settlor was also isolated or weakened by illness when they created the trust, such a decision can be a strong sign of undue influence.
Again, courts will not lightly invalidate a trust, especially in a case where a settlor can no longer speak for themselves. This is particularly true if the person suspected of undue influence is a spouse or child of the settlor. Thus, collecting as much evidence as possible about the relationship and the circumstances of the trust’s creation is vital to building your case.
Trust and Probate Counsel in Orlando
Our Orange County trust litigation attorneys have seen many challenges to trusts, especially among families dealing with a loved one’s estate. We understand the complexities and relationships at stake, and we are ready to provide tough and compassionate counsel. If you have concerns about a Florida trust, contact us today at our Orlando offices (407-449-8958).
