Robert and Andrea Silver, residents of Wisconsin, created trusts to manage their wealth. They had two children, Elizabeth and Geoffrey, who were the remainder beneficiaries. After Robert died, Andrea became the trustee of both trusts. In 2012 she amended the trusts to name a grandnephew, Peter Horneck, as successor trustee (as well as the executor of her estate). Andrea added a trust provision providing that, in the event trust distributions were delayed, the trustee was to pay certain of Elizabeth’s expenses and that these payments were not to count against her one-half share.
Andrea moved to Florida in 2014 and resigned as trustee in 2015. Mr. Horneck, a Colorado resident, took over the trust administration in consultation with the family attorney, who was still in Wisconsin. Andrea died in 2017.
In July 2017, Elizabeth asked for the reimbursement of some $14,000 in expenses. Mr. Horneck sent her a check for $50,000, but when she learned that $50,000 had also been sent to her brother, Elizabeth did not cash the check. She thought her pre-distribution payments should be coming “off the top” of the trust. After two years of correspondence and fruitless negotiations, Elizabeth filed suit in Wisconsin for accounting and enforcement of the trust provisions.
The problem was that Elizabeth was a Florida resident, the trustee lived in Colorado, and brother Geoffrey resided in Oregon. The trust document recited that it was to be governed by Wisconsin law but said, “The situs of any trust created hereunder may, however, be transferred at any time.” The trust situs became Florida when Andrea moved there and Colorado when she resigned from the trusteeship. The Wisconsin court held that it did not have jurisdiction over the case under these circumstances.
If Robert and Andrea had named a trust company, such as Legacy Private Trust Company, as the successor trustee, delays and lawsuits over the trust could have been avoided. Visit our website to learn more about the trust services we can offer: https://www.lptrust.com/our-services/trust-services/. Finding a trusted partner that you and your family can rely upon for years is no small task. Our trust services are broad-based, effective, and can serve your family for generations.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or firstname.lastname@example.org.
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