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Wintering in Florida is a popular practice for those residing part of the year in a cold-weather state, and even for many outside the United States. In a recent economic report, Canada deemed itself “Florida’s most important economic partner.” Some part-year residents flock to Florida for the warmer weather during the winter months, while others strategically establish Florida residency to lower their taxes. But, with those benefits come potential complications.
One potential complication is managing assets, particularly when passing assets to heirs and beneficiaries. A part-year Florida resident may have property in another state–or even Canada or another foreign country. Among those who retired to Florida part-time, family members and trusted friends who will be beneficiaries and might serve as personal representative for an estate or trustee for a trust may live outside the state or the country. That means the parties directly involved with the trust–from the trustee to those accepting distributions and perhaps those performing services for the trust–may not be Florida residents. In some cases, those parties may not even have visited the state.
Fortunately, Florida law contains specific provisions for establishing jurisdiction in interstate and international trust matters.
Jurisdiction refers to a court’s authority over a matter or a person. Limits on jurisdiction prevent complicated and unfair situations such as a resident of Florida suing a resident of New Hampshire in a Florida court even though the New Hampshire resident has no contacts with the state of Florida, has done nothing to submit himself to the jurisdiction of the Florida courts, and has no reason to expect to be required to travel to Florida to participate in a lawsuit.
There are two different types of jurisdiction: in personam jurisdiction and in rem jurisdiction. In personam jurisdiction simply means jurisdiction over the person. A Florida court has in personam jurisdiction over all Florida residents. In general, though, a Florida court doesn’t have jurisdiction over an out of state resident unless certain criteria are met. In rem jurisdiction is jurisdiction over “the thing.” For instance, if a piece of property is located in Florida, the Florida court will typically have jurisdiction over disposition of the property in litigation, even if one of the parties is not subject to personal jurisdiction.
If this seems complicated, don’t worry. In 2013, Florida law was amended to include specific provisions for trusts, making jurisdiction clearer in this arena. And, of course, an experienced Florida trust litigator can explain which provisions apply in your situation and how best to move forward.
In 2013, the Florida Trust Code was amended to specifically state that anyone who accepts the role of trustee of a Florida trust submits to the jurisdiction of the Florida courts with regard to that trust. The statute provides for a variety of scenarios, including accepting trusteeship of a trust that has Florida as its principal place of administration or moving the principal place of administration of the trust to Florida.
In short, the trustee of a trust with its principal place of administration in Florida is usually deemed to have consented to personal jurisdiction in the state, whether the trust was based in Florida at the time of the appointment or the trustee moved the principal place of administration after accepting the role. The statute also includes a catch-all provision that grants the court personal jurisdiction over a trustee “to the maximum extent permitted by the State Constitution or the Federal Constitution.”
It’s important to note that in accepting the role of and acting as trustee, the trustee has submitted to personal jurisdiction only as it relates to trust issues. Florida courts do not obtain blanket personal jurisdiction over the trustee.
A Florida court does not obtain personal jurisdiction over an out-of-state beneficiary of a Florida trust simply because he or she is a beneficiary. However, the court does have in rem jurisdiction to the extent of the beneficiary’s interest in the trust. That means that while the court may not have the authority to order an out-of-state beneficiary to appear before the court, it does have the power to make decisions regarding the trust property. So, as a practical matter, the beneficiary will typically have the option of appearing in the Florida court proceeding or allowing the court to make decisions about his interest in the trust without his participation.
Under some circumstances, the Florida court may also have personal jurisdiction over an out-of-state beneficiary. One example is that a beneficiary who accepts a distribution from a Florida trust submits to personal jurisdiction with regard to any matters involving the distribution.
Otherwise, personal jurisdiction generally depends on the beneficiary’s ties to and actions within the state of Florida, and so must be determined on a case-by-case basis.
The statute also contains a catch-all provision providing that a Florida court may exercise personal jurisdiction over a beneficiary “to the maximum extent permitted by the State Constitution or the Federal Constitution.”
In addition to the specific provisions relating to trustees and beneficiaries, the Florida Trust Code also provides that Florida courts have personal jurisdiction over anyone who:
Some examples of third parties who might become subject to personal jurisdiction under these provisions include an accountant hired to manage the books for the trust, a financial advisor managing trust investments, or an appraiser hired to assess the value of trust assets.
The statute also contains a catch-all provision that allows Florida courts to exercise personal jurisdiction over others “to the maximum extent permitted by the State Constitution or the Federal Constitution.”
The United States Constitution puts some limits on long-arm statutes–the laws that allow a state to grant itself jurisdiction over those who do not reside within its borders. These statutes are necessary to manage interstate issues like the ones described on this page. At the same time, Constitutional due process rights limit a state’s authority to claim jurisdiction over out-of-state residents. Without that limitation, a state could simply pass a statute declaring that it had personal jurisdiction over any resident of any state if someone chose to file a lawsuit against that person in the state.
To protect against that sort of overreach, the U.S. Supreme Court has ruled that a long-arm statute is effective only if the person has sufficient “minimum contacts” with the state. In general terms, the minimum contacts test assesses whether the person through his own actions established contacts with the state sufficient that he might reasonably be expected to be summoned to court there.
Even if the Florida court has jurisdiction over a trustee, beneficiary, or other out-of-state party, the court can’t act on that jurisdiction unless and until the person has been properly “served.” Often, service of process on an out-of-state party can be achieved through mail or use of a delivery service. However, it is important to follow statutory procedures exactly. And, if the person in question avoids service by not picking up certified mail or otherwise preventing completion of the process, it may be necessary to make other arrangements.
The attorney handling your trust litigation matter will typically take care of this step on your behalf to ensure that the jurisdiction is effectively secured.
The information above provides an overview of how Florida’s long-arm provisions establish jurisdiction over trustees, beneficiaries, and others involved in Florida trusts. However, every situation is a bit different. In some cases, jurisdiction will be clearly established and the party will readily accept service of process and submit to the court’s jurisdiction. In other cases, the lines aren’t as clear, and the out-of-state resident may challenge the court’s jurisdiction. Or, the out-of-state resident may attempt to evade service of process, effectively stalling the proceedings until service can be completed.
An experienced Florida trust and estate litigation attorney is your best source of information about how to establish jurisdiction over out-of-state parties and any limits state law or the U.S. Constitution may place on that jurisdiction.
Attorney Thomas Upchurch dedicates his legal practice to Florida estate and trust matters. He has the knowledge and experience to guide any trustee, beneficiary considering trust litigation, or other interested party through all aspects of the litigation, including securing jurisdiction over out-of-state parties.
The sooner you get reliable information about your rights and options, the better. You can schedule a consultation with Upchurch Law right now. Just call 386-320-6169 or fill out the contact form on this site to get started.