Why Does Your Trust Need a Forum Selection Clause?

Are you the settlor of a Palm Beach trust? Are you going to  have beneficiaries from all over the country? So what happens when your son whose at an internship in Indonesia decides to sue the trustee in Indonesian Court? Hopefully you though to include a forum choice clause in the trust charter. Don’t know what I am talking about? Check out an interesting case out of the Fourth District Court of Appeals.

West Palm Beach Trusts and Forum Choice Clauses

• Often times these days a West Palm Beach trust can have beneficiaries in multiple states as kids go off to college around the country and even around the world.
• Even after new lives are started in new places, and the trust has to be able to adapt to these changing circumstances.
• So using the example from above what do you do when your son in Indonesia is suing for breach of trust or surcharge?
• You should consider having a forum selection clause.
• Do you know what that does?
• It essentially tells everyone and puts him or her on notice that all cases need to be handled in West Palm Beach.
• Do you see why this is so beneficial?
• Now your trustee does not have to fly to Indonesia and hire a foreign attorney for their case.
• Even if there is no international travel, a foreign (out of State) lawyer can still addthousands in fees to the detriment of trust property.
• But not when there is a forum choice clause.
• Do court’s enforce these?
• Yes, all the time.
• Check out a case from West Palm Beach.

Fairbanks Contracting v. Hopcroft

• The defendant construction company is appealing an order that denied enforcement of their forum choice clause.
• They had filed a motion to transfer venue pursuant to the terms of the contract and it was denied.
• On appeal that decision was reversed.
• Courts prefer to enforce these agreements when possible because they make litigation more predictable for repeat players.
• Why not use this fact to your advantage whenever you have a trust that could have beneficiaries from all over the place.

Want to learn a little more about forum selection clauses?

Check out the entire case by clicking here.