The Long Arm of the Law – Trust Litigation and Out-of-State Beneficiaries
When dealing with trusts, there is a possibility that the potential litigation or present lawsuit involves people from multiple jurisdictions and multiple states. A trust may be created and administered in Florida, but the beneficiaries may live elsewhere. If this is the case, can the beneficiaries still be sued in Florida?
The Southern District of Florida discussed the issue of personal jurisdiction over a party when dealing with an in-state trust and an out of state beneficiary in Abromats v. Abromats. Gloria Abromats, executed a revocable trust while she was residing in Florida. Further amendments were made to Trust, which one of her sons, Clifford, claimed were procured through undue influence over Gloria by his brother Phillip. Phillip lived in Wyoming and received distributions from the trust. Clifford filed suit against Phillip in Florida, but Phillip argued that the court did not have jurisdiction over him in Florida.
Florida has a specific long-arm statute tailored for trust litigation. Fla. Stat. § 736.0202 provides a multitude of situations in which a person may subject themselves to jurisdiction in Florida. These include situations such as accepting a trusteeship of a trust with principal place of administration in Florida, moving the principal place of administration of trust to Florida, or accepting a distribution from a trust having its principal place of administration in Florida. Clifford argued that Fla. Stat. § 736.0202(a)8 was applicable to this case as Phillip accepted distributions from the Trust while in Wyoming.
The Court needed to determine whether the statute violated the due process clause. The Court examined whether Clifford’s claims 1) arise from Phillips contacts with Florida, 2) whether Phillip “purposefully availed” himself of Florida by conducting activities in the state, and 3) if exercising jurisdiction over Phillip would comply with fair play and substantial justice. The Court found that the distributions that Phillip had been accepting since 2007 created enough contacts that were sufficiently related to the claim and to Florida. Further, because the distributions were accepted from the Trust administered in Florida, with funds that were based in Florida bank accounts, Phillip “purposefully availed” himself and it would be reasonable for him to come to court in Florida. Finally, because the case was centered in Florida and all witnesses and documents that would be required for the case were in Florida, it was not against fair play to have Phillip come to Florida for the case.
Thus, the Court found that by cashing the checks that were distributed from the Florida trust, Philip fell under the long-arm statute and could be sued in Florida.
This article is meant to briefly discuss a recent case involving jurisdiction in trust litigation cases, but does not cover all of the intricacies of jurisdiction. Anyone with trust litigation or estate litigation questions should not hesitate to contact the attorneys of Chepenik Trushin LLP, who are ready, willing, and able to assist with your trust litigation needs. Bart Chepenik, 305-613-3548 or Brad Trushin, 305-981-8889. We answer calls and texts 24-7 to be accessible to you.