Where Is a Trust Located?
There are many decisions you need to make when creating a trust. One of the more critical ones is deciding the trust’s location or “situs” for legal purposes. In other words, what state will have jurisdiction over your trust and its property?
For many Florida residents, that should not be a difficult question. If you live and own all of your property in Florida, then most of the time it will make sense to declare Florida as the situs of the trust. But if you own property in multiple states–say you have a second home in New York–then it might be beneficial to locate the trust in another state.
Pa. Court Declines to Get Involved in Florida Trust Litigation
Establishing a clear situs can also provide guidance to the courts in the event a dispute arises over the trust after you are gone. To illustrate what we mean by this, here is a recent decision from a court in Pennsylvania, In re Estate of Luciani, arising from a dispute over a trust located in Florida. More precisely, this case involves litigation between siblings fighting over their mother’s will and trust.
The mother passed away in 2012. She lived in Florida at the time of her death. Her will was filed for probate in a Florida court. It referred to a living trust, which the mother also executed in Florida. The trust instrument itself further declared it was subject to Florida law.
Initially, Florida is also where the siblings’ litigation took place. One of the children was named trustee. The other siblings asked the probate court to revoke the will. Both sides agreed that the will and trust were connected–i.e., if the will was invalid then so was the trust, and vice versa.
The Florida probate court ultimately decided the will and trust were valid. Sometime later, the objector siblings then sought a judgment from the Pennsylvania courts that the trustee failed to make certain required distributions to them from the trust.
If you are wondering what Pennsylvania had to do with any of this, the objector siblings basically argued that since the trustee herself happened to live Pennsylvania, that gave the state’s courts jurisdiction over the trust. The Superior Court of Pennsylvania, however, did not agree with this interpretation of the law. To the contrary, the Superior Court said all of the evidence pointed to this being a Florida trust. And as far as Pennsylvania law was concerned, the situs of a trust “is not affected by an out-of-state residence by the trustee to the extent … [the trustee] is not a Florida resident.”
Speak with a Lee County, Florida, Estate Planning Lawyer Today
As you can see, where a trust is “located” can matter a great deal. This is why it is important to work with an experienced Fort Myers estate planning attorney when drafting or administering a trust. Contact the Kuhn Law Firm, P.A., at 239-333-4529 to schedule a free consultation with a member of our estate planning team today.