Arguing Undue Influence In A Trust Formation? When Are You Barred?

Most beneficiaries are extremely unhappy when they learn they have been omitted from estate planning documents, especially when they believe that the decedent was “unduly influenced”.  The factors to analyze whether undue influence exists were set forth in a 1971 Florida Supreme Court case .

A recent case, Flanzer V. Kaplan, explores the time frame in which you must bring an action for undue influence in the creation of an irrevocable trust agreement. The donors, Gloria and Louis Flanzer, husband and wife, created an irrevocable philanthropic trust in 2005. Louis died in 2013 and Gloria died in 2015.

In November, 2015, daughter, Jan Flanzer(“Jan”)  alleged that during a period of time from 2001 until Gloria’s death, the trustees of the philanthropic trust “exploited their confidential relationship” with Gloria to eliminate Jan from Gloria’s estate planning documents. Jan, however, did not file a lawsuit until her mother’s death which was 10 years AFTER the irrevocable philanthropic trust was created.

While the trust code permits a challenge to the validity of any portion of a trust procured by undue influence, the trust code does not specify a time in which to challenge a trust. While the trust code does not specifically provides time periods for such a lawsuit, Florida has general provisions for such time periods.

The statute of limitations (“SOL”) to bring a lawsuit is 4 years for an action founded on fraud. The issue is WHEN the 4 year statute begins. Florida law provides that the SOL for an action founded on fraud begins running on the date in which the action was discovered or SHOULD have been discovered with due diligence. Thus, Jan argued that the 4 years did not start until she knew of the omission.

The trustees argued that the SOL was 4 years from the creation of the irrevocable trust, as the “delayed discovery” language ONLY applies to fraud and fraud is not the same action as undue influence. The court noted that there was no authority supporting this conclusion and determined that Jan could bring her cause of action.

ADVICE: Any time you think you have a case of undue influence, discuss the circumstances with an expert in probate or trust litigation immediately. You want to be sure that you determine your alternatives as soon as possible. If you believe your loved ones are being abused or exploited then contact Florida Abuse Hotline at 1.800.96-ABUSE (1.800.962.2873). Press 1 to report suspected abuse, neglect or exploitation of the elderly or a vulnerable adult. This toll free number is available 24/7. To make a report via fax, send a detailed written report with your name and contact telephone to 1.800.914.0004. Download the Florida Abuse Hotline’s fax reporting form. (DCF)

WORD OF THE WEEK: Exploitation is currently defined in Florida law as generally knowingly obtaining or using an elderly person or disabled adult’s funds with the intent to temporarily or permanently deprive the individual from the use of such funds and assets. The Florida statute is very broad and should be reviewed when determining if one is being exploited.


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