Court: District Court of Appeal of Florida; November 23, 2015; Florida; State Appellate Court
Appellant, acting as the personal representative of Aiko Okamua Lampp's estate, contests a trial court order mandating the return of funds disbursed from Mrs. Lampp’s credit union accounts. The trial court invalidated the payable-on-death (POD) designation that granted Appellant and her family members access to these funds, citing undue influence in its procurement. Appellant asserts that POD designations cannot be invalidated on these grounds and argues for a money judgment instead of returning the funds to the estate. These arguments were rejected, and the court affirmed the trial court's decision.
Mrs. Lampp had established a family trust in 2009, intending her entire estate to bequeath to Hodges Boulevard Presbyterian Church upon her death. At her passing, she had substantial funds in Navy Federal Credit Union accounts, which she had previously held jointly with her husband. Testimonies from two disinterested witnesses indicated her consistent intent to leave her estate to the church. However, Appellant and her former daughter-in-law claimed that Mrs. Lampp expressed a desire to exclude the church from the credit union funds and requested that Appellant complete a POD form to allocate the funds among her family members.
The trial court determined that Appellant held a fiduciary relationship with Mrs. Lampp and concluded that the POD designation was procured during Mrs. Lampp's final illness, just days before her death, despite her having the necessary mental capacity. The court found the testimony from Appellant and her former daughter-in-law unconvincing, leading to the conclusion that Appellant had exploited her relationship with Mrs. Lampp to secure the disputed gift, resulting in the invalidation of the POD designation and Appellant's removal as personal representative.
Florida law permits the invalidation of a Payable on Death (POD) designation due to undue influence, supported by a strong public policy against the abuse of fiduciary relationships. Statutory provisions, such as section 733.107 of the Florida Statutes and case law, uphold this policy. If a substantial beneficiary has a confidential relationship with the testator and is involved in obtaining a contested will, a presumption of undue influence arises.
POD designations and Totten trusts are classified as 'will substitutes' that do not transfer ownership until the account holder's death but are treated as inter vivos transfers with testamentary characteristics. Florida law allows challenges to these designations on various grounds, including undue influence, fraud, duress, and overreaching. Relevant case law, such as Cripe v. Atlantic First National Bank of Daytona Beach and Estate of Kester v. Rocco, confirms the application of undue influence analysis to POD accounts.
The trial court's conclusion that the POD designation could be challenged based on undue influence is affirmed, as the Appellant did not prove that the designation was free from undue influence. Even if the burden of proof rested with the church, it successfully demonstrated that undue influence invalidated the POD designation. The Appellant's reliance on Brown v. Brown is misplaced, as that case addressed the decedent's intent regarding joint accounts and did not prevent undue influence challenges to POD designations. Furthermore, the absence of express undue influence provisions in Florida's banking statute concerning POD designations is not determinative.
Seymour v. Seymour, 85 So.2d 726 (Fla. 1956) establishes that banking laws do not conclusively determine the ownership of deposited funds. The court rejects the Appellant's argument regarding the nature of a Payable on Death (POD) account, affirming it functions similarly to a testamentary device and is subject to the same equitable principles. The trial court found that the Appellant obtained the POD designation through undue influence, rendering the gift void and ordering the return of funds to the estate.
The court also dismissed the Appellant's claim that the trial court lacked authority to mandate the return of credit union funds. The Appellant failed to comply with the order and was found in contempt, facing monetary sanctions. The order for repayment is deemed appropriate under Florida Statutes 733.812, which requires the return of improperly received assets, including any gains since receipt.
While the Appellant contends that the order could lead to incarceration for contempt, which she claims would be unconstitutional, the court concludes that the trial court had the discretion to require the return of funds rather than only issuing a money judgment. The law allows for civil contempt findings for failure to comply with court orders, and the trial court's actions protect the Appellant from indefinite incarceration without a finding of her ability to pay the purge amount. Indirect criminal contempt could apply if the Appellant intentionally divested herself of the ability to pay, following due process.
The trial court has not ordered incarceration, making any arguments regarding its propriety premature, leading to an affirmation of the lower court's decision. Totten trusts, validated by the 1904 case In re Totten, involve accounts managed by an owner as trustee for a beneficiary, with ownership transferring upon the owner's death. These trusts are incorporated within Florida Statutes § 655.82. In cases involving money as the asset for a constructive trust, it is essential to identify and trace a specific amount, either by linking it to an existing account or by tracing transactions related to its conversion into other assets.
