blogger visitor

Wednesday, January 09, 2019

Mandatory Restricted Depository Arrangements in Probate Questioned [Florida]

Fla.Stats. §69.031(1) authorizes a probate court to direct the financial assets of a probate estate be deposited into a restricted depository account held by a financial institution. This is a protective mechanism, since assets may be disbursed from that account only upon court order, instead of mere direction by the personal representative. Thus, it acts a mechanism to reduce the risk of improper use, dissipation, or disbursement of estate assets by the personal representative.

Fla.Stats. §69.031(1) reads as follows:

(1) When it is expedient in the judgment of any court having jurisdiction of any estate in process of administration by any guardian, curator, executor, administrator, trustee, receiver, or other officer, because the size of the bond required of the officer is burdensome or for other cause, the court may order part or all of the personal assets of the estate placed with a bank, trust company, or savings and loan association (which savings and loan association is a member of the Federal Savings and Loan Insurance Corporation and doing business in this state) designated by the court, consideration being given to any bank, trust company or savings and loan association proposed by the officer. When the assets are placed with the designated financial institution, it shall file a receipt therefor in the name of the estate and give the officer a copy. Such receipt shall acknowledge the assets received by the financial institution. All interest, dividends, principal and other debts collected by the financial institution on account thereof shall be held by the financial institution in safekeeping, subject to the instructions of the officer authorized by order of the court directed to the financial institution. (emphasis added)

Some counties have opted to impose restricted depository accounts for all estates, raising the issue whether a blanket prohibition is appropriate, or whether the above highlighted language of the statute first requires either a determinization that the size of a bond would be burdensome or there is other good cause in each estate.

In an opinion released today, the Fourth District Court of Appeal ruled against local rules requiring the mandatory use of restricted depositories. The Court nonetheless allowed the restricted depository order under appeal in that case to stand, since there was otherwise good cause for the court to order the account under the facts. The case is not final, pending the possibility of a motion for rehearing and the outcome of such a rehearing if it is granted, but interested persons should monitor its status.

Assuming the Court’s opinion becomes final, it is difficult to know how counties with such mandatory requirements will react, both within and without the counties making up the Fourth DCA (such as whether they will remove such mandatory requirement, otherwise attempt to re-work their rules in light of the opinion, or await appellate decisions in their own circuit).

DISCLOSURE: Our firm, through Jenna Rubin, Esq., represents the appellees in this case.

STEVEN GOODSTEIN, as Personal Representative of the Estate of Andrew Scott Goodstein v. SHELLEY GOODSTEIN, as Conservator for BLAKE GOODSTEIN and CHANDLER GOODSTEIN, and GRANT GOODSTEIN, 4th DCA, Case No. 4D18-2382 (January 9, 2019)

Post a Comment