In short: In Kates v. Lifter (Fla. 3d DCA 2012), a trustee who also ran the family company proposed $1 million loans at 3% to beneficiary-shareholders the court found uncreditworthy. The probate division blocked them, whether made by the trust or the company. The court affirmed: every circuit judge holds the court’s full jurisdiction, and divisions are administrative.
Families often assume the probate judge can’t touch the family business. This case says otherwise.
The Facts
The decedent built a corporation and, during life, gave stock to children and grandchildren. At death, his revocable trust held 49.9% of the voting shares. His successor trustee was also president and sole director of the company. The trustee proposed lending up to $1 million each, at 3%, to certain beneficiaries who were also shareholders. The court found them uncreditworthy and barred the loans, whether made from the trust or from the corporation.
The Decision
The Third District affirmed (84 So. 3d 1093, Mar. 14, 2012). Every circuit judge holds the full jurisdiction of the circuit court; divisions such as probate exist only for administrative convenience. An older Florida Supreme Court case suggesting otherwise, Gettinger v. Gettinger, was obsolete after county judges’ courts were abolished in 1973. The probate judge could address the corporation’s conduct where it was intertwined with the trustee’s administration.
Why It Matters
When a trust controls a family company, the trustee wears two hats. Beneficiaries can ask the probate court to restrain conduct that harms the trust, even if it is carried out through the company.
Lessons
- Trustees who control businesses owe trust duties when acting for the company in ways that affect the trust.
- Below-market loans to insiders or beneficiaries are a red flag.
- Don’t assume you must file a separate corporate case; the probate division may have the power you need.
Source: Kates v. Lifter, 84 So. 3d 1093 (Fla. 3d DCA 2012).
Watch the Oral Argument
This is the recording of the actual oral argument, posted on the channel. What lawyers and judges say at argument is not the ruling; the decision is summarized above.
49.9% of the Voting Shares in a Revocable Trust — and a Family Fight Over Control
Go Deeper
- Florida Trustee Duties and Beneficiary Rights: Accountings, Self-Dealing, and the 6-Month Deadline
- Can a Florida Trustee Use Trust Money for Themselves? The Duty of Loyalty Under § 736.0802
Frequently Asked Questions
Can a Florida probate judge rule on a family corporation?
Yes, when the issues are intertwined with trust administration. Every circuit judge holds the full jurisdiction of the circuit court.
Can a trustee lend trust money to beneficiaries?
Only consistent with the trust terms and fiduciary duties. In Kates v. Lifter, the court barred below-market loans to uncreditworthy beneficiaries.
Does a trustee owe duties when acting as company president?
When the trust controls the company, conduct affecting trust assets is subject to trust duties and court oversight.
What happened in Kates v. Lifter?
The Third District affirmed an order barring $1 million loans at 3% to beneficiaries in 2012.
Talk to a Florida trust litigation lawyer
Weidner Law, P.A. handles Florida trust disputes and probate appeals from St. Petersburg. If you need a trust litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
Read the law yourself, free: the full Florida Probate Code and Probate Rules and the Florida Trust Code are on floridarules.net.
This article is general information about Florida law, not legal advice about your situation. Reading it, watching the videos, or contacting the firm does not create an attorney-client relationship. Every case turns on its own facts, and past results do not guarantee a similar outcome. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.
