FL: Trust & Estateslaw
Facts: In 1994 attorney prepared a trust instrument with a Mr. and Mrs. Beery as grantors. The trust provided that, upon their death, the residual beneficiary of the remaining assets would be their son. In the event the son predeceased either of them, the assets were then to be devised as follows: (a) 20 percent to Lori Passell; (b) 40 percent to Debbie Passell; (c) 20 percent to Patricia Leafty; and (d) 20 percent to the Church. Upon the death of either Mr. or Mrs. Beery, the trust became irrevocable and not subject to amendment. The survivor, however, as the surviving trustee, had the absolute right to dispose of any or all of the trust assets in any manner in which he or she determined to be in his or her best interests. Both Mrs. Beery and her son predeceased Mr. Beery.
Thereafter, in 1996, Mr. Beery expressed a desire to change the residual beneficiaries of the trust. The lawyer prepared an amendment deleting the Church and increasing the appellants’ 20 percent shares to 30 percent. In 1997, Mr. Beery died. The Church demanded and received its 20 percent interest provided in the original trust instrument. The appellants’ respective shares were then reduced to the original 20 percent each. This lawsuit followed.
Issue: Do third party beneficiaries of testamentary documents have standing to sue for legal malpractice?
Rule: Yes. Intended third-party beneficiaries of testamentary documents have standing to bring an action for legal malpractice "if they are able to show `that the testator’s intent as expressed in the will is frustrated by the negligence of the testator’s attorney.’" Hare v. Miller, Canfield, Paddock & Stone, 743 So.2d 551, 553 (Fla. 4th DCA 1999) (quoting Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So.2d 1378, 1380 (Fla.1993)). In Hare, the court held that the third-party beneficiary of a trust amendment had standing in a legal malpractice action against the settlor’s attorney. Similarly, the appellants in this case have standing to maintain their action against the decedents’ attorney. Here, the surviving trustee’s intent was two-fold: first, to delete the Church as a residual beneficiary and, second, to increase the appellants’ respective shares. The evidence the court had before it on the motion for summary judgment supports the conclusion that the decedents’ intent was frustrated by the attorney’s preparation of an invalid amendment to a trust which the lawyer had drafted in the first instance.
Lesson: Beware the intended beneficiary who is not a client.