Understanding the limits of and exceptions to intent.

• Author: Tiernan, Peter B.
• Position: Wills and trusts - Florida

Florida law provides that an individual's intent controls. This rule seems pretty straight forward. However, as with any other rule, certain limitations and exceptions apply. As a result, ascertaining an individual's intent in a will or a trust continues to be a challenge to many attorneys.

The Most Common Limitation

The most common and arguably the most misunderstood limitation on an individual's intent is the limitation the document itself places on a trustee's otherwise apparent broad power or authority. Consider, for example, the following invasion provision: "The trustee may pay to my wife so much of the corpus of the trust estate as the trustee, in his sole and absolute discretion, deems appropriate for her health, support, or happiness. My trustee need not act reasonably when exercising this discretion." The above provision is clear and unambiguous. In such cases, words are supposed to be accorded their usual, ordinary, or commonly accepted meanings. (1) Further, a court must assume that a testator (and presumably a settlor) meant what was said in the will (or in the trust). (2)

Based on the use of the conjunction "or" in the above provision, one might think that "happiness" is an independent standard for invading the trust, and that the settlor wants to give the trustee complete and total authority over whether to make a distribution to his wife, when to make distributions, and the amount of any distribution. Additionally, when considering the extent of the discretion granted, the use of the term "happiness," and the statement that the trustee does not have to act reasonably, it appears that the trustee could distribute the entire corpus of the trust to the wife if she told him that such a distribution would make her happy. (3)

Undoubtedly, the intent of the testator controls, governs, or determines the construction of a will. (4) But an individual's intent is not ascertained from some random term, phrase, or paragraph of a will or trust. Rather, "[i]ntent is ascertained from the four corners of the document through consideration of all the provisions of the will taken together, rather than from detached portions or any particular form of words. This rule prevails whether the entire will or some specific clause or part of it is being construed." (5)

Confirming the above approach, another court stated, "The interpretation of any integral part of a will must be based on the total will, construed solely in the light of the testator's intent gathered from the complete instrument." (6) The Florida Supreme Court stated, "a court must ascertain and determine a testator's 'paramount' intention and take this as its guide." (7) Scott on Trusts states, "[t]he extent of the powers conferred on a trustee does not depend only on the language used by the settlor in creating the trust but may depend also on the purposes for which the trust is created." (8)

Taking all of the above into account, the primary question that needs to be addressed is what the instrument as a whole indicates that the individual's paramount or overall intent was for creating the trust. Once that is established, one must use that finding as the guide for determining what the testator or settlor meant.

With the above parameters in mind, assume that the last provision of this same trust provides as follows: STATEMENT OF INTENT. I love both my wife and my children equally. However, this is a second marriage. She has children from her first marriage and I have children from my first marriage. After my death I want my wife to be supported in the same manner to which she was accustomed to during our marriage. With this in mind, I want the trust administered in such a manner as to preserve as much of the trust estate as possible for my children and their descendants who are the ultimate objects of my bounty.

The above statement changes the whole understanding of the settlor's intention. The invasion provision indicated that the settlor wanted to create something akin to a total discretionary trust. However, whether that language should be accorded its broadest breath or application is dependent upon the intent of the testator or settlor as gathered from a reading of the entire will or trust, not just from an isolated paragraph. (9) This statement of intent provision creates an ambiguity as to the settlor's true intention. As a result, the plain and ordinary meaning of the language used would not be the only source from which to interpret the will or trust. Extrinsic evidence could be introduced to explain what the settlor actually meant.

Florida law is very clear that isolated words, phrases, and even paragraphs are not the determining factors regarding someone's intent. (10) The whole document must be considered. The overall plan or scheme gleaned from a reading of the entire instrument sets forth the tone for how specific provisions should be construed. (11) If the general intention of the testator is clear, a court will give effect to such intention, disregarding the particular intent of the particular clause. (12)

The above statement of intent provision almost certainly conveys the settlor's general dispositional scheme and the purposes for which the trust was created. It emphasizes a balanced approach between supporting his wife while at the same time not distributing so much of the trust to her that it diminishes his children's inheritance. It indicates that the term "happiness" should not be accorded its broadest application. It creates substantial doubt that the phrase, "My trustee need not act reasonably" is to be taken literally. Finally, it shows that he does not want the trustee to have absolute authority as to whether and when to make a distribution and the amount of any distribution. It shows he clearly wants there to be some...