mediating probate cases to settlement

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Upchurch Watson White & Max

Mediation Group

and the University of Florida

Levin College of Law

Institute for Dispute Resolution

Mediating Probate Cases to Settlement

are proud to cosponsor today’s Webinar:

Upchurch Watson White & Max Mediation Group


MEDIATING PROBATE CASES TO SETTLEMENT

MEET OUR PRESENTER MEET OUR MODERATOR

Michael S. Orfinger [email protected]

Richard B. Lord [email protected]

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P R E S E N T E D B Y M I C H A E L S . O R F I N G E R


WHY DOES PROBATE LEND ITSELF TO MEDIATION?

• Both parties are hamstrung in litigation by the fact that the key witness (i.e. the testator) is dead. “Dead men tell no tales.”

• There can be no will contest while the testator is alive. Fla.Stat. s.732.518.

• But the litigation will focus on whether a testamentary document accurately sets forth the decedent’s testamentary intent.

Upchurch Watson White & Max Mediation Group 4

WHY ELSE DOES PROBATE LEND ITSELF TO MEDIATION?

• Fla.Stat. s.733.815 allows interested persons to agree among themselves to alter the interests, shares or amounts to which they are entitled under a testamentary instrument by executing a written contract to that effect.

• Pierce v. Pierce, 128 So. 3d 204 (Fla. 1st DCA 2013) (s.733.815 is a legislative embodiment of the preference for mediation and settlement of disputes).


THE PROBATE ESTATE IS A SHRINKING PIE: WHICH IS BETTER?

33% of Pie “A” OR 100% of Pie “B”?


THE ROLE OF EMOTIONS IN PROBATE LITIGATION


Grief Anger at co-litigant(s)

Betrayal Anger at decedent

Entitlement

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• The emotions in each room will be different (e.g.

anger v. grief).

• The lawyer’s challenge is to remain “uninfected” by

those emotions and keep the client from

developing unrealistic expectations.

• Mediator’s challenge is to figure out what

combination of emotions are in play in each room.



• In many cases, the grief process has been thwarted

for one or more litigants.

• Exclusion from hospital/home/hospice during last illness.

• Exclusion from the funeral.

• Exclusion from wakes, sitting shiva, etc.

• Exclusion from the family home.

• Deprivation of family keepsakes (e.g. photos).

• A settlement is often necessary to complete the

grieving process.


DEFUSING ENTITLEMENT

• Other than matters like homestead and elective

share, inheritance is not a right. A bequest is a gift.

There is no right to a gift.

• If Mom left everything to the Humane Society, what would you have to complain about?

• Very often, the client’s motivation to litigate is not

that he/she didn’t inherit, but that the other party

did inherit.

• Why did Mom decide she was more worthy than I?


LIKELY LITIGATION MATCHUPS

• Children vs. children

• Children vs. boyfriend/girlfriend

• Children vs. caretaker

• Children vs. attorney-in-fact

• Children vs. surviving spouse (i.e. stepparent)

• Note the recurring theme of “children”.

• Most likely to have a sense of entitlement?


LIKELY LITIGATION ISSUES

• Lack of testamentary capacity

• Undue influence

• Somewhat less likely litigation issues:

• Proper execution of the will by the testator and witnesses

• Reestablishment of a lost will

• Appropriate funding of a living trust


TESTAMENTARY CAPACITY

• Testator must understand in a general way:

• Nature and extent of property to be disposed of;

• Testator’s relation to those who would naturally benefit from

the will; and

• The practical effect of the will as executed.

• Raimi v. Furlong, 702 So.2d 1273 (Fla. 3rd DCA 1997).

• Testamentary capacity is determined solely by the

decedent’s mental state at the time of execution of

the will. • Coppock v. Carlson, 547 So.2d 946 (Fla. 3rd DCA 1989).


LACK OF TESTAMENTARY CAPACITY

• There is a strong presumption of testamentary

capacity under Florida law.

• The presumption is so strong “that it allows for a demented

or insane person to execute a valid will during a ‘lucid

interval’”. Raimi v. Furlong, 702 So.2d 1273 (Fla. 3rd DCA

1997).

• A will contestant who bases the opposition on lack

of capacity bears the burden of “proving a

negative”, i.e. that the testator lacked capacity.


LACK OF TESTAMENTARY CAPACITY VS. UNDUE INFLUENCE

• Which will be easier to prove for the party opposing admitting the will to probate?

• Undue influence is usually a more promising approach for

the opponent of the will.

• Proof of lack of capacity requires proving a negative to

overcome a strong presumption.

• Proof of undue influence requires proof of a prima facie case

that raises a presumption.

• Evidence of undue influence includes proof of actions of

persons other than the testator.


UNDUE INFLUENCE

• A claim of undue influence effectively concedes

the existence of testamentary capacity, but claims

that the will is the product of:

• “Active procurement” by

• A “substantial beneficiary”, who occupied a

• “Fiduciary or confidential relation” with the testator.


UNDUE INFLUENCE

• The “how-to” guide for undue influence an estate

plan is at www.stealanestate.com.

• Focuses on the ways in which the unscrupulous or greedy

create a “fiduciary or confidential relation”.

• Indicia of “active procurement” creating a

presumption of undue influence are found in In re:

Carpenter’s Estate, 253 So.2d 697 (Fla. 1971).


http://www.stealanestate.com/

UNDUE INFLUENCE

• A presumption of undue influence is a presumption

shifting the burden of proof.

• Fla. Stat. §733.107(2); Hack v. Janes, 878 So. 2d 440 (Fla. 5th

DCA 2004).

• Therefore, once the presumption is raised, the

proponent of the will must prove the nonexistence

of undue influence.

• Diaz v. Ashworth, 963 So.2d 731 (Fla. 3rd DCA 2007).


MAKING THE PROBATE MEDIATION SUCCEED

• Probate mediations tend to take longer than average.

• Start in the morning, not the afternoon.

• Prepare to devote the entire day, and possibly the

evening, to the mediation process.

• Discourage the client from having travel plans on the

same day as the mediation.

• Accept that at least one party will spend a lot of

caucus time venting, because of faith in his/her

position and a feeling of powerlessness.


LAWYERS AND MEDIATORS BEWARE!

• Pierce v. Pierce, 128 So.3d 204 (Fla. 1st DCA 2013).

• Probate mediation took all day on a Friday. Appellee

asked to take the proposed agreement home for the weekend to review before signing. She ultimately signed it

without taking it home. She immediately sought to rescind.

• Trial court rescinded the agreement, holding appellee

didn’t freely, knowingly and intelligently enter into it.

• First DCA reversed. “That appellee may have been

fatigued and distressed by the labor, and later suffered second thoughts, these facts, without more, do not provide

grounds for setting aside an otherwise valid agreement.”

7/30/2014 Upchurch Watson White & Max

Mediation Group


• Let your client vent, but only in private caucus. Venting is cathartic, and is part of the grieving process.

• Allow your client to provide the mediator with as much insight as possible into the opposing party (work history, education, relationship while growing up, what motivates him/her).

• What motivates your client? • Money, sentiment, regret, vindication?



• Venting helps the mediator “categorize” the clients,

which dictates the approach to take with them:

• Category 1: Those who want to settle.

• Category 2: Those who do not want to settle.

• Category 3: Those who affirmatively want NOT to settle.

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• Category 1: Recognizes the economic utility of

settlement; understands the emotional utility of

looking forward rather than backward.

• Category 2: May see little merit in adversary’s

position; may view it as extortion against the estate.

May still be willing to settle if the economics of

settling justify it, and allow it to be viewed as a

“win”.



• Category 3: Settlement doesn’t compensate for the

intangible benefit this party gets from continuing to

litigate. Primary motivation is “schadenfreude” –

pleasure derived from the troubles of others.

• “If I’m not getting it, then neither are you!” (Translation: That means the lawyers are getting it.)

• How should the attorney react to litigation motivated by spite?

• Inquire of the party how the decedent might react to his/her tactics (“How would your Dad handle this?”)



• Repeatedly reinforce to your client the fact that the

settlement pie is shrinking.

• Shows that the pie at trial will be smaller yet.

• This allows the client to fully analyze the risks and benefits of

settling for a fixed sum versus a percentage of the estate.

• Be candid about the probabilities of prevailing in

court, and what a “win” would really mean in

financial terms.


WHAT ABOUT REAL ESTATE?

• A devise of real estate presents multiple issues:

• Valuation is uncertain and prone to fluctuate.

• Adversary parties may find themselves as tenants in

common, which may lead to a partition action later.

• Carrying costs must be shared by all.

• Can anyone afford to buy anyone out?


MEDIATING THE DISPOSITION OF REAL ESTATE

• “I cut, you choose”.

• One party picks a price at which he is willing either to sell his interest in the property or buy the other party’s interest. The

other party decides whether to be buyer or seller at that

pre-determined price.

• Can be done in multiple rounds or a single “Russian Roulette”

round.

• Advantage: Inherently requires the party submitting the price to

be fair.

• Caveat: Assumes that both parties are willing and able to either

buy or sell.


SINGLE BID REVERSE DUTCH AUCTION

• Each party submits one sealed bid to the mediator,

with the price at which she is willing to either buy

the other party’s interest in the property or sell her

own.

• High bidder is the “winner”, and purchases at the

price set by the low bidder.

• Advantage: Encourages high bidding, therefore

maximizing value of the property. Good tactic in a soft real estate market.


CONCLUSION

• Remind the client about the financial and

emotional benefits of settlement.

• Little things mean a lot. Offer photos, keepsakes,

etc. Your client may receive more in financial value

in exchange.

• Be patient. Settling probate litigation requires

emotional fortitude by the client, and in some ways

marks the end of the client’s relationship with the

decedent.


Michael S. Orfinger



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For related information about this topic, please see Mr. Orfinger’s article in Alternatives to the High Cost of Litigation (CPR’s newsletter) at this link:

bit.ly/probate_orfinger

http://bit.ly/probate_orfinger

http://bit.ly/probate_orfinger

THANK YOU FOR JOINING US!

Michael S. Orfinger Principal

[email protected] 800-264-2622

Richard Lord Shareholder

[email protected] 800-264-2622

MEDIATING

PROBATE CASES

TO SETTLEMENT

Florida Bar Course

#1405077N 1.5 Hours CLE 1.0 Certification

Elder Law

Marital & Family Law

Wills/Trusts/Estates

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Please email

[email protected]

with questions.

uww-adr.com

www.law.ufl.edu/idr

Robin Davis, Director [email protected]


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