PROBATE CORNER

By: David M. Garten, Esq.

ARTICLE: The Situs Rule – Litigation Roulette

Clients frequently own real estate (immovables) in two or more states. Post-death, the courts in each state may construe the realty located therein as if devised by separate wills. As a result, issues involving the validity and construction of your client’s will may arise in multiple jurisdictions.

  1. THE SITUS RULE: In Florida, the law of the state where the realty is located (i.e., the “situs”) governs the validity and effect of a disposition, whether intestate or testate, of realty. See, §731.1055, F.S. (eff. 7/1/16)[1] For example, the law of the situs state governs:
    • (a) the validity of the will, i.e., fraud, duress, mistake, and undue influence in its execution and the testator’s capacity to execute the will. See In re Estate of Hatcher, 439 So. 2d 977 (Fla. 3rd DCA 1983); In re Estate of Roberg, 396 So.2d 235 (Fla. 2nd DCA 1981).
    • (b) the execution requirements of document purporting to convey title to or an interest in realty. See Kyle v. Kyle, 128 So. 2d 427(Fla. 2d DCA 1961); Trotter v. Van Pelt 198 So. 215 (Fla. 1940); Thomson v. Kyle, 39 Fla. 582, 23 So.12 (Fla.1897). Most states have responded to this problem by enacting “validating” statutes thereby acknowledging the validity of the domicillary state’s will execution requirements. For example, §732.502(2), F.S. reads in relevant part: “Any 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.”
    • (c) the surviving spouse’s dower right or statutory forced share interest in realty. See Morton v. Morton, 297 So.2d 79 (Fla, 3d DCA 1974), citing In Re Estate of Johnson, 240 So.2d 840 (Fla. 2nd DCA 1970); In re Estate of Udell, 482 So. 2d 458 (Fla. 4th DCA 1986). Contra, elective share rights. The ancillary jurisdiction will typically consider a formal election at the domicile to be binding on property located within the ancillary jurisdiction. See, In Re Kees’ Estate, 31 N.W. 2d 380 (Iowa 1948).
    • (d) an out of state adopted child’s right to claim a portion of the decedent’s intestate Florida realty. See, Mott v. First National Bank of Petersburg, 124 So. 36 (Fa. 1929).
  2. FULL FAITH AND CREDIT: It is well settled that a will probated in the domicillary state is not entitled to the protection of the full faith and credit clause of the Federal Constitution in the situs state with regard to realty. Nor does the doctrine of res judicata or estoppel by judgment apply. See, Biederman v. Cheatham, 161 So. 2d 538 (Fla. 2nd DCA 1964); Stein v. Welch (In re Estate of Stein), 896 P.2d 740 (Wash. Ct. App. 1995); First Presbyterian Church of Sterling, Ill. v. Hodge (In re Barrie’s Estate), 35 N.W.2d 658, 661 (Iowa 1949); Marr v. Hendrix, 952 S.W.2d 693, 695 (Ky. 1997). Compare, New York Surrogate’s Court Procedure Act § 1603 which establishes a procedure for distributing property subject to a New York ancillary administration where there is a will contest pending in the testator’s domicile.
  3. CHOICE-OF-LAW PROVISION: It is unclear whether you can you avoid the situs rule by including a choice-of-law provision in your client’s will that selects the law of a non-situs state.
    • (a) FLORIDA:  (i) PERSONAL PROPERTY: In Florida, an out of state testator’s election of Florida law in his will is controlling as to personal property. See §731.106(2), F.S. (eff. 7/1/16). (ii) TRUST: §736.0107, F.S. reads: “The meaning and effect of the terms of a trust are determined by: (1) The law of the jurisdiction designated in the terms of the trust, provided there is a sufficient nexus to the designated jurisdiction at the time of the creation of the trust or during the trust administration, including, but not limited to, the location of real property held by the trust or the residence or location of an office of the settlor, trustee, or any beneficiary; or (2) In the absence of a controlling designation in the terms of the trust, the law of the jurisdiction where the settlor resides at the time the trust is first created. Notwithstanding subsection (1) or subsection (2), a designation in the terms of a trust is not controlling as to any matter for which the designation would be contrary to a strong public policy of this state.” [Emphasis added].  (iii) COMMERCIAL TRANSACTIONS: With respect to commercial transactions, the legislature has specifically authorized contracting parties to agree that the laws of another state having a reasonable relation to the transaction may govern their rights and duties. See, §671.105, F.S. which reads in part that “when a transaction bears a reasonable relation to this state and also to another state or nation, the parties may agree that the law either of this state or of such other state or nation will govern their rights and duties”. This rule is consistent with the Restatement (Second) of Conflict of Laws §187 (1969) and the Uniform Probate Code Section 2-703 which generally recognize choice-of-law provisions in the governing instrument.
    • (b) NEW YORK: In NY, the testator’s election of NY law in his will is controlling. EPT§3-5.1(h) reads: “Whenever a testator, not domiciled in this state at  the  time  of   death,  provides  in  his will that he elects to have the disposition of his property situated in this state governed by the laws of this state, the  intrinsic validity, including  the  testator’s  general capacity, effect, interpretation, revocation or alteration of any such disposition  is determined by the local law of this state.”  However, EPT§3-5.1(b)(1) reads: “The formal validity, intrinsic validity, effect, interpretation, revocation or alteration of a testamentary disposition of real property, and the manner in which such property descends when not disposed of  by will, are determined by the law of the jurisdiction in which the land is situated.”
  4. INTESTATE SUCCESSION: The conflict rules governing intestacy largely mirror those governing testate succession. See, §731.1055, F.S.  But See, In re Dalip Sing Bir’s Estate 188 P. 2d 499 (1948) where the court ruled that the laws of the country of India would control the disposition of proceeds from sale of California real estate in the estate of an Indian national decedent who died intestate in California.

[1] See also, Walling v. Christian & Craft Grocery Co., 27 So. 46 (Fla. 1899); Thomson v. Kyle, 23 So. 12 (Fla. 1897); Williams v. Kimball, 35 Fla. 49, 16 So. 783 (Fla.1895); Trotter v. Van Pelt 198 So. 215 (Fla. 1940); In re Estate of Roberg, 396 So.2d 235 (Fla. 2nd DCA 1981); Beale v. Beale, 807 So. 2d 797 (Fla. 1st DCA 2002).  But see, Saunders v. Saunders, 796 So. 2d 1253 (Fla. 1st DCA 2001) wherein the court held that Florida law applies to distribute a nondomiciliary testator’s Florida realty only when the will provides that Florida law applies to his Florida property. The Legislature fixed the Saunders problem by enacting §731.1055, F.S. (eff. 7/1/16). For a discussion on this issue, see Governing Law for Dispositions of Florida Real Property by Non-Resident Decedents, ActionLine, Winter 2017, pp. 14, 15.