Remainder trust beneficiary of dad’s Florida revocable trust? Involved in mom’s Florida Guardianship which also involves dad’s Florida revocable trust? Listen up. You may want to read this Miami case whose opinion was handed down yesterday. You should also read this Florida appeals court opinion if there is a trust lawsuit with a Florida “investment agent“. This case addresses the important issue of personal jurisdiction over a Florida Trustee’s “investment agent” under Florida Trust Law. Can you sue the Florida Trust’s investment agent in Florida ? I thought you could…………….. but…………..
“Contentious” & “Complicated” Miami Guardianship
- Rabbi Stern created two Florida trusts
- 1 trust was a Florida Family Trust & 1 Trust was a Charitable Trust
- He passed away survived by a Florida widow and daughters
- Evidently, there was a Miami guardianship of the Florida widow during her life
- She passed away, so this Miami Trust Lawsuit was filed by the personal representative of her Florida Estate
Florida Charitable Trust Pays $$ to Widow
- The Charitable Trust paid income to the Florida widow for her life and then the remainder trust interest, when she died, went to (“goes” to) charities
- The financial institution which provided financial or investment services to Rabbi Stern was NOT the trustee of the Florida Charitable Trust . It was INVESTMENT AGENT. This is very important from a Florida Trust Litigation standpoint.
Florida Trust Investment Agent Vs. Trustee
Q: Why ?
A: Florida Trust Law has special rules regarding
- Where A Florida Trust Lawsuit may be filed
- Who is subject to jurisdiction in Florida over a Florida Trust Lawsuit
Florida Living Trust For Wife & Daugthers
- Rabbi Stern, like most Florida citizens, had a Florida revocable trust as part of his estate plan
- A revocable trust in Florida may also be referred to as a Living Trust or Florida Revocable Living Trust
- •· The terms of the Florida Trust ? Income to his wife during her life & then the 4 daughters inherit the Florida Trust when his wife passes away
- Rabbi Stern’s Florida Living Trust created 3 sub-trusts
- The financial company /institution involved in his estate plan was the Trustee of this Florida Living Trust — an important difference than being “investment agent” of the Miami Charitable Trust
The charitable trust & the Living Trust have different
- trustees,
- beneficiaries,
- trust documents, and are
- funded and managed separately.
What Documents Are Important to the Charitable Trust and the Living Trust ?
- The Trust Document governs the relationship between the trustee and its beneficiaries, or, put another way, the Florida Trust Document provides the “rules” for the Miami Trust and the trustee.
- But when you have an investment agent, it’s different. The Florida investment agent usually has the Florida Trust sign an account opening document when the Florida investment agent begins working for the trust. That’s what happened here.
- Palm Beach trust beneficiaries and Palm Beach trustees: be careful ! If the Florida trustee hires an investment agent , know what rights you may be giving up. You may be giving up your right to sue the investment agent in Florida: not necessarily something your Palm Beach Trust litigator would advise you.
Investment Management Account Document Says You Can’t Sue in Florida
The financial institution had a written investment contract with the Charitable Trust.
It had a forum selection clause that said any investment litigation had to be in New Jersey: not Florida Probate Courts. (In Florida, Trust Lawsuits are typically filed in the Probate Division of the court system: the Florida Probate Court.)
Trustee of Living Trust Files Accounting & Appellants Sue for Fraud
- During the Miami guardianship action, the Florida Trustee of the Living Trust wanted court approval of its Florida trust accounting of the Living Trust.
- The appellants filed 13 counterclaims ! Including for fraud & breaches of fiduciary duty.
The Florida Investment Agent filed a Motion to Dismiss: saying the account opening documents had a MANDATORY forum selection clause. The Miami court dismissed the claims regarding the Florida Charitable Trust.
Q: What’s the Florida Trust “Take-Away” From This Miami Trust Case?
Don’t confuse a Miami Trustee’s duties & obligations as co-trustee of a Florida Living Trust with the duties and obligations of a Florida investment agent of a Florida Charitable Trust.
Oh yes, if you are a Palm Beach trustee or a Florida Trust Beneficiary, you should ask your Palm Beach trust litigation team about the section of the Florida Trust Code that talks about delegation of Trust Investment Functions. A TRUSTEE can delegate investment functions to an INVESTMENT AGENT…..and that investment agent is subject to the jurisdiction of Florida Trust Courts. I don’t know why this part of the Florida Trust Code was not mentioned in this opinion.