Trust Code Updates Lapsing Statute

Section 732.603 of the Florida Statutes (the “antilapse statute”) is a probate default rule of construction that allow certain devises under a last will and testament to pass to the devisee’s descendants instead of the devise “lapsing” to the residuary or passing by intestacy laws. To trigger the antilapse statute, such devises do not have survivorship language and only applies to the testator’s grandparent or descendants of a grandparent.

For example, Harold’s will states “all my residue to be distributed to my daughter, Suzie.” If Suzie predeceases Harold, because there is no language indicating what happens if Suzie predeceases Harold, the antilapse statute provides that Suzie’s interest would be distributed to her children. The statute only applies to distribute to the descendants of Harold’s grandparents.

Until recently, Chapter 736 (the “trust code”) afforded this antilapse coverage for all devises in a trust instrument. Therefore, all devises in a trust, regardless of the familial relationship to the testator/grantor, passed to a devisee’s descendants if they predeceased the testator/grantor and survivorship language was not utilized. Thus, if Harold left $10,000 to his personal trainer, Sally, and Sally predeceases Harold, then the antilapse statute would provide that the devise would be distributed to Sally’s children which is probably not what Harold intended.

The Florida Legislature amended Section 736.1106(2) of the Florida Statutes to make the trust code consistent with the probate code and eliminates any confusion between the probate process and a trust administration. It also eliminates the trustee’s burden of tracking down descendants who were never intended by the testator/grantor to receive the distribution thereby allowing devises to be administered closer to the testator’s/grantor’s intent. This amendment is effective for all trusts that become irrevocable after June 30, 2014.

Advice:

Antilapse statutes are only default rules so it is important to talk to your clients about contingent recipients for all devises in a Will or Trust. While adding “per stirpes” after a devise can be a simple solution, it is always prudent to plan for the unexpected and eliminate devises ending up in the wrong hands.