Friday, October 9, 2020
The primary focus in Demicran v. Mikhaylov was the ability to modify an irrevocable trust under the Florida common law. The settlor had established an irrevocable trust for the benefit of his children, "which initially appointed an independent trustee and a third party with trustee removal powers." Disagreements eventually arose between the settlor and the beneficiaries against the trustee and third party.
Before the final hearing, the third party appointed a new trustee to serve as an independent trustee. At the final hearing, noting the consent of the settlor and beneficiaries, the court allowed a modification of the trust.
The court considered whether the new trustee had standing to appeal this modification, ultimately finding that the new trustee had a "sufficient stake in the controversy to seek judicial resolution..." The court also considered whether the third party was indispensable to the action. The court found that the third party was not indispensable, reasoning that there was a "complete and efficient determination of the equities and rights between the other parties was possible without the third party..."
The court ultimately held that the modification of the trust is appropriate if the settlor and all of the beneficiaries agree to modify the trust, Florida common law will permit the modification.
"Finally, the Court reversed the trial court's denial of attorney's fees to the trustees because the trial court failed to make the requisite finding of bad faith or reckless indifference which the trust itself required."
See Rubin on Tax:Demircan v. Mikhaylov , Rubin on Probate Litigation, September 25, 2020.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.