In the case of Buskirk v. Buskirk, B295648 (2020), the California Court of Appeals, Second District held that despite the Settlor relocating to another state, when a dispute arose over the administration of her Trust, California was still the appropriate jurisdiction for the lawsuit. When I read this case, I immediately thought of the old television series “The Beverly Hillbilles” and the theme song that said “…California is the place you ought to be…” but substituted ought to sue…
Although the goal of creating a living trust is most often to avoid probate and thus avoid involving the court in your personal financial matters, it is all too often the case that lawsuits ensue over the administration of a trust. Sometimes these suits are brought by well intending family members who believe that their loved one is being taken advantage of and involving the court is necessary to both protect their loved one and save the trust assets from being misappropriated. It can also be a means for siblings or other family members to use the court system, under the guise that it is a legitimate dispute over the management or alleged mismanagement of trust assets, to carry out a long-standing sibling rivalry. Whatever the case may be, deciding where to sue is a factor in bringing a petition involving a trust.
In the case of Buskirk v. Buskirk the court of appeals held that despite Ellen Buskirk being relocated to Idaho in 2016 by her daughters, California was still the appropriate place to bring a lawsuit regarding the administration of the trust created by Ellen and her husband in 2005. This is an important ruling for many individuals who are thinking of relocating to another state while maintaining ties to California. In a nutshell, you could be living in another state, but forced to litigate in a California over issues surrounding a trust, because you created your trust in California and maintain ties to the state.
When Ellen’s son brought a petition for an accounting and to appoint a professional fiduciary to replace the trustee (pursuant to California Probate Code Section 17200), Ellen and her daughters claimed that Idaho was the appropriate jurisdiction. The court of appeal determined that California had personal jurisdiction over Ellen and her daughters because a three prong test was satisfied: 1) by participating in the management of a California Trust – which owned real property located in California – Ellen and her daughters had purposely availed themselves to California benefits; 2) the claims related to the trust and Ellen and her daughters because they were connected to the trust which was the topic of the lawsuit; and 3) Ellen’s prior residence in California and the question of her voluntary relocation to Idaho along with the participation in that relocation by her daughters was sufficient to establish minimum contacts to the state of California.
What does this mean to you? If you have a trust drafted in California and are considering relocating to another state, where you will be establishing residency, contact an attorney in that state to ensure that your Trust is consistent with the laws of the state in which you are now a resident. Ensure that your declaration of trust indicates that you intend the trust to be administered pursuant to the laws of your new home state and that you are complying with all of the statutory and decisional authority requirements of that state in administering your trust. No matter where you live, it is especially important to consult legal counsel for advice on administering your trust if you are a surviving spouse and your children or beneficiaries had rights that were triggered by the death of your spouse.
If you continue to own real property in California, you may still be subject to a lawsuit involving your trust or that property in the state of California, but for suits involving the administration of your trust, taking these steps may save you from having to participate in a lawsuit regarding the administration of your trust in California while you are living in another state. Ideally, receiving and following advice from a qualified attorney in the state where you live could avoid litigation over the administration of your trust altogether, which takes us back to the primary goal for creating a trust.
If you need to create an estate plan, modify your existing estate plan or if you are a trustee or beneficiary of a living trust, Cannon Legal Firm has the experience and expertise to advise you and work with you to achieve your goals. Contact us for a free consultation today. Dana@CannonLegalFirm.com ~ (562) 543-4529.