Florida Trust Code & the Florida Long Arm Statute
There are many estate planning benefits for creating a revocable or irrevocable trust in Florida. Trusts can help our Jacksonville clients avoid probate, efficiently manage assets, save money on estate taxes, and protect assets. A person can create a trust in any state, but Florida is unique because of the Statutes that make up the Florida Trust Code.
One of these is the Florida Trust Code’s long arm statute. This law can be found under Florida Statute 762.0202, is a law that was specifically tailored to protect Florida trusts in litigation. This law states that a Florida probate court will decide just about any lawsuit or litigation involving a trust created in Florida.
This statute was recently tested in a case between two brothers G. Clifford Abromats and Philip Abromats. Their mother, Gloria Abromats, created a living trust in September 2005 in Broward County, Florida. A living trust is a revocable trust, which means the settlor of the trust may modify or revoke the trust any time before he or she dies. Clifford claimed that Philip used undue influence to get his mother to modify the trust. The brothers filed lawsuits against each other in multiple jurisdictions, and the question became which court could hear the case?
This is where Florida Trust Code’s long arm statute comes into play. Traditionally, many states have long arm statutes to protect the state’s interest. A good example of a long arm statute is usually found in torts, or in civil litigation. If a Mississippi resident gets into an automobile accident with a Florida resident in Jacksonville, Florida, then the Florida resident may bring a lawsuit against the Mississippi resident in Florida. A Florida court would use the long arm statute to exercise jurisdiction over the Mississippi resident even though he does not live in Florida.
How Does A Florida Court Determine Jurisdiction?
A Florida probate court determines jurisdiction in three steps:
First, the court determines if the subject matter of the lawsuit is located in the state. Second, the court determines if Florida’s long-arm statute authorizes jurisdiction.
Third, it determines if the exercise of this jurisdiction will violate the Fourteenth Amendment’s Due Process Clause.
In this case, Clifford was a resident of Wyoming and a qualified beneficiary of his mother’s trust. Clifford sued in one court to receive an accounting of the trust, while Philip sued in another court claiming Clifford exercised undue influence over his mother’s trust. These cases eventually reached a Florida probate court, and the court had first to decide if its jurisdiction was appropriate.
The first step the court took was to determine In rem jurisdiction. Florida Statute 762.0202 states, “Any beneficiary of a trust having its principal place of administration in this state is subject to the jurisdiction of the courts of this state to the extent of the beneficiary’s interest in the trust.” According to Florida law, unless the trust document says otherwise, the principal place of administration is located at the trustee’s usual place of business. The usual place of business is where the records about the trust are kept, or the trustee’s residence. A court also considers where the trust funds are held. In this case, the Florida trustee’s records were kept in Florida, and a Florida bank held the trust’s assets.
The next step for the Florida court was to determine if the beneficiaries had minimum contacts with the state of Florida. The court here found there were minimum contacts when the beneficiaries accepted the trust’s distributions because the trust records and property were in Florida.
“Furthermore, by accepting distributions from the Trust administered from Florida, with the assistance of Florida-based professionals, from funds based in Florida accounts, and with the understanding that Florida law governed, [Defendant] unquestionably “purposefully availed [himself] of forum benefits” and made it such that he “could reasonably anticipate being haled into court” in Florida.”
The last step for the Florida court was to decide if exercising jurisdiction would violate the due process test. The court essentially asks itself, would it be fair to the out of state party to exercise jurisdiction over him or her? Here, the court decided it would be because it was in the best position to efficiently resolve the dispute. The relevant evidence is in Florida, which makes the discovery process more convenient. Many witnesses and party members live in Florida. Further, the case involves a trust created in Florida by a resident of the state, so this state has the strongest interest in resolving the matter.
If you are looking to bring an action against a Florida Trust or Trustee located in Florida, contact a Florida Trust attorney to discuss your case.