A Strong Offense
A Stronger Defense
A misspelled name; an incomplete name of a charity; an “Inc.” instead of an “LLC.” Grantors get names wrong. Testators make typos. Attorneys make scriveners’ errors.
Usually it isn’t that hard to figure out that the grantor actually meant “JoAnn” instead of “JoAnne” or to figure out that the grantor meant “Habitat for Humanity” and not “Habitat for Humans.”
But then there are times when getting a beneficiary’s name wrong could mean all the difference in the world. At a minimum, it could open the door for a court to find an ambiguity in the trust instrument, which, in turn, could open the door into a very protracted, expensive court fight over the grantor’s intent.
In Miami Children’s Hospital Foundation, Inc. v. Estate of Hillman, a recent case out of Florida, we’re reminded about the need for precision in naming beneficiaries.
Elaine B. Hillman executed a will that left the residue of her estate to her trustee under a trust agreement. Hillman later executed an amendment to the trust agreement. That amendment provided:
Upon my death, the trustee shall distribute some of the assets of this Trust as follows: . . . All the remaining property, annuities, stocks, bonds and assets in the trust shall be split among the following charities:. . . TWENTY-FIVE PERCENT (25%) to MIAMI CHILDREN’S HOSPITAL FOUNDATION, CRANIAL/FACIAL FOUNDATION, located at 3000 S.W. 62nd Avenue, Miami, FL 33155, ATT: Dr. Anthony Wolf [sic].
Seems pretty straightforward that Hillman intended the Miami Children’s Hospital Foundation to be the beneficiary of the pourover trust, right? The Florida trial court that first considered the issue didn’t think so.
The trial court concluded that there was an ambiguity in the trust document and went on to conclude that Miami Care Foundation, Inc. – not Miami Children’s Hospital Foundation – was the intended beneficiary. The basis for the perceived ambiguity was that Hillman wanted Dr. Anthony Wolfe to have the ability to direct and control the assets of the pourover trust and Dr. Wolfe was now the head of Miami Care.
The appellate court disagreed. In finding that there was no ambiguity in the trust instrument, the appellate court determined that the lower court’s interpretation contradicted the plain language of the trust documents. No where does the trust mention Miami Care Foundation. In fact, it couldn’t mention it. The Miami Care Foundation didn’t even exist until some time after the trust documents were executed.
While the trial court here was wrong in looking beyond the terms of the trust because the trust unambiguously named Miami Children’s Hospital Foundation as the beneficiary, you can see the potential for problems if the grantor got the name of the charity wrong. Getting a name wrong may open the door for the court to look beyond the terms of the trust.