Florida Court Provides a Lesson in Nuncupative and Notarial Wills

Many lawyers have not heard the terms “nuncupative wills” and “notarial wills” since they took their bar exams (and some perhaps not even then). A recent Florida case provides us with a real world application of these terms.

In the case, a testator executed a will in New York before 3 witnesses and signed it at the end. The will expressly was limited to the U.S. property of the testator. Later, as an Argentinian resident, testator entered into a will in Argentina. This will had different beneficiaries than the New York will, and it also revoked all prior wills. A dispute arose whether the New York will could be probated in Florida, or whether the Argentina will could be (which would act to revoke the New York will).

The Argentina will was not signed by the testator, and the witnesses also did not sign. Here is the procedure that was followed:

The Testator orally pronounced her testamentary wishes to a notary who transcribed them. The Argentine will sets forth that the Testator made her attestations before the notary in the presence of three witnesses who were identified by name, address, and national identity card number. The Argentine will explains that the notary typed up the testamentary wishes and presented the typed document to the Testator, who declined to read it. The document was then read back to the Testator, who orally approved it in the presence of the witnesses. The notary signed and stamped the will, but the Testator and the witnesses did not sign it.

Florida law requires the testator to sign a will at the end and also requires two signing attesting witnesses. Fla.Stats. Sec. 732.502(1). So at first blush, the Argentina will cannot be probated in Florida. Fla.Stats. Sec. 732.502(1).

Florida does relax its execution requirements for wills signed by a nonresident of Florida. Fla.Stats. Sec. 732.502(2) provides in part “[a]ny will, other than a holographic or nuncupative will, executed by a nonresident of Florida, either before or after this law takes effect, is valid as a will in this state if valid under the laws of the state or country where the will was executed.” Since the will was admitted to probate in Argentina, it purportedly was valid in Argentina and thus this statute would allow its probate so long as it was not a holographic or nuncupative will.

So was the will “nuncupative?” Florida’s Probate Code does not provide a definition, and there is little Florida case law on the issue. Black’s Law Dictionary defines a nuncupative will as a “will made by the verbal declaration of the testator, and usually dependent merely on oral testament for proof.” The classic example is a testator who makes a declaration on his deathbed. Since the will at issue was orally dictated and not signed, it sure looks like a “nuncupative will.”

The proponents of the Argentina will attempted to get around the Florida restrictions by characterizing it as a “notarial will.” Fla.Stats. Sec 733.205 provides “[w]hen a copy of a notarial will in the possession of a notary entitled to its custody in a foreign state or country, the laws of which state or country require that the will remain in the custody of the notary, duly authenticated by the notary, whose official position, signature, and seal of office are further authenticated by an American consul, vice consul, or other American consular officer within whose jurisdiction the notary is a resident, or whose official position, signature, and seal of office have been authenticated according to the requirements of the Hague Convention of 1961, is presented to the court, it may be admitted to probate if the original could have been admitted to probate in this state.”

So was the will a “notarial will?” Again, Florida’s Probate Code does not define the term. The appellate court quoted a treatise that indicates a notarial will general involved four stages of creation:

First, the testator makes an oral declaration of the will to the notary and two witnesses. Second, the notary (or an assistant) reduces the will to written form. Third, after being read aloud by the notary, the will is signed by testator, notary, and witnesses, with the notary adding information about the execution, including, usually, its date and place and the names of witnesses. Finally, the will is retained by the notary and, in some countries, registered in a central register.

The third element was missing here – the testator and witnesses did not sign the will. But even if the will was a notarial will, there is the last requirement of Fla.Stats. Sec. 733.205 that still must be met – that the original will could have been admitted to probate in Florida. So if the will was nuncupative, then the fact that it was a notarial will would not help its admission.

The appellate court noted that it is possible to have a notarial will that is not nuncupative (i.e. it was signed by the testator). In that case, Florida would admit it. But unsigned notarial wills are nuncupative and thus cannot be admitted – thus the appellate court denied the admission of the will.

The appellate court closes its opinion with a call to the Florida legislature to make their job easier by enacting some statutory definitions for these these terms.

Malliero v. Mori, Mori & Corallo, 3rd DCA (September 30, 2015)

Applicable Federal Rates – October 2015

No Charitable Set Aside Deduction for Estate Due to Litigation

Under Code Section 642(c)(2) an estate may claim a current charitable contribution deduction for income tax purposes, notwithstanding that the income earned will not be paid or used for a charitable purpose until sometime in the future. That is, the estate need not actually pay income over to the charity in the year it is earned to obtain a charitable deduction – it is enough if the funds are set aside for later payment to the charity.

In a recent Tax Court case, the remainderman of the estate was a church. However, at the time the income tax return for the year at issue was filed (albeit filed late), there was ongoing litigation regarding who was entitled to what from the estate. Income earned during the year that appeared to be otherwise due to the church was now at risk of being diverted to pay other claimant beneficiaries and litigation costs.

Under Regulations, no charitable set-aside deduction deduction will be available if there is a risk that the set aside income may not find its way to charity. They require the estate to prove that the possibility that the amount set aside for the charitable beneficiaries would go to noncharitable beneficiaries be so remote as to be negligible. Treas. Regs. Sec. 1.642(c)- 2(d). In the case at issue, the IRS sought to disallow the deduction due to the risk that the set aside income could be diverted to noncharitable beneficiaries and expenses.

The Tax Court sided with the IRS and disallowed the deduction. The estate argued that due to the advanced state of settlement negotiations, there was little risk that the income would not go to two churches (at some point, another church was added as a beneficiary) at the time the return was filed. The court noted that at the time of the return filing, even if the pending settlement was finalized, the shares of the churches were still uncertain since the issues of legal fees and coexecutors’ commissions remained unsettled. Also, until that issue was resolved, the will was not validated. Based on these facts, the risk of loss of funds was not “so remote as to be negligible.”

This is the second case in 2015 with similar facts and a similar result. The first case was Estate of Eileen S. Belmont, et al.v. Commissioner, 144 T.C. No. 6, which I wrote about here. Estates and trusts seeking a set-aside deduction that are engaged in litigation should consider themselves warned that the IRS will scrutinize such deductions and contest them when appropriate, and that the Tax Court is apt to side with the IRS on these issues.

Estate of John D. DiMarco, TC Memo 2015-184.