According to census data, Florida is the largest recipient of state-to-state migration in the U.S. Internationally, Florida remains the top state for international home buyers. So it shouldn’t come as a surprise to anyone that multi-jurisdictional estates are a growing part our practice here in Florida. The jurisdictional issues these cases raise in probate and trust cases are different. On the probate front, jurisdiction is often a given (there’s no FL probate proceeding if there isn’t a FL probate asset that needs administering), so most of the case law focuses on conflicts-of-law issues (see here, here). On the trust front, if the trustee isn’t a Florida resident, jurisdiction is never a given (see here).

Effective October 1, 2013, we now have new legislation addressing the thorny jurisdictional issues inherent to multi-state and international trust cases in two ways: first, it creates a new, detailed long-argm statute specifically designed for trust cases (new F.S. 736.0202); and second, it repeals F.S. 736.0205, a poorly drafted forum non conveniens statute that had been used to preemptively block litigation in Florida involving non-resident trustees (see here, here). For better or worse, repeal of F.S. 736.0205 and passage of new F.S. 736.0202 is likely to lead to even more multi-jurisdictional trust cases getting litigated in Florida courts.

Here’s how this senate staff analysis described the statutory problems the new legislation is intended to address:

Current Florida law does not contain a comprehensive long-arm statute for litigation relating to a trust. The Florida Supreme Court, following decisions by the United States Supreme Court, has ruled that if there is a statute authorizing jurisdiction and if the defendant has sufficient minimum contacts with Florida such that maintaining the suit does not offend traditional notions of fair play and substantial justice, a Florida court may exercise jurisdiction over the defendant. The minimum contacts test is a factual analysis insuring that a defendant’s constitutional right to due process is not violated. The statute authorizing the jurisdiction is called a long-arm statute.

The Real Property, Probate, and Trust Law Section of The Florida Bar is concerned that the long-arm statute in s. 48.193(1), F.S., is too generic to authorize jurisdiction over all necessary parties in a trust dispute, including nonresidents. Section 736.0202(1), F.S., allows Florida courts to acquire personal jurisdiction over nonresidents if he or she accept a trusteeship of a trust having its principal place of administration in Florida, or he or she moves the principal place of administration of a trust to Florida. However, this leaves a number of scenarios in which Florida courts do not have express authority for jurisdiction over all necessary parties. Examples of necessary parties unaccounted for by s. 736.0202(1), F.S., include a beneficiary who accepts compensation from a trust or a person who performs a service for a trust, if the trust has its principle place of business in Florida.

While on its face, s. 736.0205, F.S., appears to be a statute establishing jurisdiction, courts have interpreted it to be a forum non conveniens statute that requires a court to determine the “most appropriate forum” in which a case should proceed. Courts have suggested that the statute shifts to the plaintiff the burden of proving that the choice of venue is appropriate. However, this conflicts with Florida Rule of Civil Procedure 1.061 which provides that the defendant has the burden of pleading and proving the facts necessary to obtain a change of venue. Thus, the relationship between the statute and the rule of civil procedure creates confusion as to the correct placement of burden of proof for forum non conveniens issues.

Under new F.S. 736.0202(2), a Florida court is deemed to have personal jurisdiction over any non-resident trustee, trust beneficiary or other interested person who personally (or through an agent) does any of the following:

  1. Accepts trusteeship of a trust having its principal place of administration in this state at the time of acceptance.
  2. Moves the principal place of administration of a trust to this state.
  3. Serves as trustee of a trust created by a settlor who was a resident of this state at the time of creation of the trust or serves as trustee of a trust having its principal place of administration in this state.
  4. Accepts or exercises a delegation of powers or duties from the trustee of a trust having its principal place of administration in this state.
  5. Commits a breach of trust in this state, or commits a breach of trust with respect to a trust having its principal place of administration in this state at the time of the breach.
  6. Accepts compensation from a trust having its principal place of administration in this state.
  7. Performs any act or service for a trust having its principal place of administration in this state.
  8. Accepts a distribution from a trust having its principal place of administration in this state with respect to any matter involving the distribution.

For more on the back story to this new statute and how it’s all supposed to work going forward you’ll want to read the FL Bar white paper submitted in support of the new legislation entitled Proposed Statutes on Acquiring Jurisdiction over Trustees and Trust Beneficiaries and Repealing s. 736.0205, and the CLE presentation explaining the new statute prepared by Barry F. Spivey of Spivey & Fallon, PA. entitled Jurisdiction Over Nonresidents in (Mostly) Trust Litigation.