Court Opinion

ID: 4357109
Source: CourtListenerOpinion
Date Created: 2019-01-09 15:04:01.586584+00
Date Added: 2024-06-11T09:37:07.725112
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

 HADASSAH, THE WOMEN’S ZIONIST ORGANIZATION OF AMERICA,
                          INC.,
                        Appellant,

                                      v.

   STEPHEN G. MELCER, TRUSTEE, MARSHA E. GELT, ROBERTA
    GELT, JERILYN GELT and NATIONAL MULTIPLE SCLEROSIS
                          SOCIETY,
                          Appellees.

                              No. 4D18-623

                            [January 9, 2019]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Janis Brustares Keyser, Judge; L.T. Case No. 50-2017-CP-
004190XXXXMB.

  William E. Boyes of Boyes, Farina & Matwiczyk, P.A., Palm Beach
Gardens, for appellant.

  Richard S. Geller of Fishback Dominick, Winter Park, for appellee,
Marsha E. Gelt, and Steven H. Kane of Kane and Koltun, Attorneys at Law,
Maitland, for appellees, Marsha E. Gelt, Roberta Gelt and Jerilyn Gelt.

KANNER, DANIEL J., Associate Judge.

    Three sisters, the current distributees of an irrevocable trust, dispute
whether several charities are “qualified beneficiaries” of the trust under
the Florida Trust Code (FTC). We reverse the grant of summary judgment
to the sisters on our finding that under the plain language of the statute,
the charities have the rights of qualified beneficiaries.

   The trust was created in 1989 by Sylvia Gelt. The trust instrument
provided that upon her death, a portion of the trust fund was to be placed
in a Credit Shelter Trust for her husband, Samuel. Upon his death, the
balance of the Credit Shelter Trust was to be divided into three separate
trusts for the benefit of their daughters.
   During their lifetimes, the daughters have the right to receive income
and principal distributions from their respective trusts. They do not have
general or testamentary powers of appointment over any portion of the
principal or undistributed income of their respective trusts.

   The trust instrument provides that upon the death of each daughter,
her trust terminates and the balance of the principal and any
undistributed income is redistributed to the trust(s) of the remaining living
daughter(s). When the last daughter dies, the trust terminates and the
trustee is instructed to distribute the remaining principal and
undistributed income to three named charities.

    Sylvia died first and Samuel died in 2016. Their three daughters are
alive. The trustee filed this action seeking to resign. He named the
daughters and the charities as defendants, alleging that the “defendants
are the qualified beneficiaries of the Trust.”

   The daughters filed a motion for summary judgment, arguing that the
charities are not qualified beneficiaries of the trust. The court found in
favor of the daughters and Hadassah appealed. 1

   Having the rights of a qualified beneficiary of a trust is important
because under the FTC, a trustee is only required to “inform and account”
to a trust’s qualified beneficiaries. § 736.0813, Fla. Stat. (2017). Whether
a charitable organization has the rights of a qualified beneficiary is a
question of statutory interpretation. The relevant section of the FTC
provides:

          (1) A charitable organization expressly designated to
      receive distributions under the terms of a charitable trust has
      the rights of a qualified beneficiary under this code if the
      charitable organization, on the date the charitable
      organization’s qualification is being determined:
          (a) Is a distributee or permissible distributee of trust
      income or principal;
          (b) Would be a distributee or permissible distributee of trust
      income or principal on termination of the interests of other
      distributees or permissible distributees then receiving or eligible
      to receive distributions; or
          (c) Would be a distributee or permissible distributee of
      trust income or principal if the trust terminated on that date.

1 Originally, two of the three charities appealed. However, one of the charities
dismissed its appeal, leaving Hadassah the sole remaining appellant.

                                      -2-
§ 736.0110(1), Fla. Stat. (2017) (emphasis added). A “distributee” is a
beneficiary who is currently entitled to receive a distribution. § 736.0103
(6), Fla. Stat. (2017).

   We find the charities are qualified beneficiaries under section
736.0110(1)(b). On the relevant date, the daughters were the only “other
distributees or permissible distributees then receiving or eligible to receive
distributions” of trust income or principal. Id. “[O]n termination of the
interests” of the daughters, the charities “would be” distributees. Id.
(emphasis added).

   The statute and the trust instrument are clear and unambiguous. If
the daughters’ interests terminate, the charities take the remainder.
Therefore, the charities are qualified beneficiaries under section
736.0110(1)(b).

   The error in the lower court’s reasoning is found in paragraph 7 where
the court found:

      7. Each daughter is the sole distributee or permissible
      distributee of her separate Trust. Upon the termination of
      each daughter’s separate trust, the only distributee or
      permissible distributee of trust income or principal would be
      the “Trusts created herein for Grantor’s surviving daughters,
      in equal shares, or to the Trust of the sole surviving daughter,
      as the case may be,” as provided in article 4, paragraph
      b.(2)(d) of the Trust.

   The lower court’s order contemplates the sequential termination of the
daughters’ individual interests such that A’s interest passes to B and C;
then B’s interest passes to C; then C’s interest passes to the charities.
This interpretation is contrary to the plain language of the statute.

   The statute contemplates the simultaneous termination of the interests
of the distributees (“termination of the interests of other distributees or
permissible distributees then receiving or eligible to receive distributions”).
If the interests of the distributees of the trust were simultaneously
terminated, all of the daughters’ interests would terminate and the
charities would be the distributees. Therefore, the charities are qualified
beneficiaries under the plain language of the statute.

   Accordingly we reverse the trial court’s order of summary judgment and
remand for further proceedings consistent with this opinion.

                                     -3-
  Reversed and remanded.

DAMOORGIAN and CIKLIN, JJ., concur.

                          *           *   *

  Not final until disposition of timely filed motion for rehearing.

                                  -4-