It is a legal question that comes up with increasing frequency. Let’s say your mother lived in Florida, and she signed a revocable living trust naming an Illinois bank with a Florida branch as trustee. Now that she has died the bank has transferred administration to its main Chicago office, but you live in Arizona. If you think the bank has failed to follow your mother’s directions, or that its investment decisions are questionable, you probably have the right to challenge its administration—but where would you file a lawsuit?

As society becomes increasingly mobile, and living trusts continue to grow in popularity, this problem occurs with more regularity. It is exactly the dilemma facing the Colorado courts in a recent case, though the state connections were different.

William M. Luebke’s father created a trust for him in 1986, and the current trustees took over managing the trust in 1989. The trustees are Mr. Luebke’s brother, a lawyer and his law firm, and U. S. Bank. The trust includes a provision that it will be governed by the law of Florida.

Mr. Luebke now thinks that the trustees have breached their fiduciary duty to him. He filed a lawsuit in the Colorado courts, alleging that the trustees breached their duty of loyalty to him as a beneficiary and were negligent in the trust’s administration. He also alleged that the trustees took actions that had an effect in Colorado, and that the Colorado courts therefore should have jurisdiction over the court dispute.

The probate judge in Denver disagreed, dismissed the case and instructed Mr. Luebke to file it in Wisconsin, where the trustees are all located. Mr. Luebke objected, arguing that dismissal of the Colorado proceedings would effectively preclude him from making his legal arguments because he could not afford to travel to Wisconsin, hire an attorney there and challenge the trustees. Both the state and federal constitutions guaranteed him the right to have his grievances aired, insisted Mr. Luebke, and dismissal of the Colorado court case would deny him his rights.

The Colorado Court of Appeals was unmoved. The court noted the general rule that primary jurisdiction over trust litigation is ordinarily in the state where the trustee lives and maintains the trust. None of Mr. Luebke’s challenges were particular to Colorado law, and the probate judge had been correct when he declined to exercise jurisdiction over the dispute. Luebke v. Luebke, April 20, 2006.

Colorado, like Arizona, has adopted the Uniform Probate Code, and Mr. Luebke’s case was decided partly on the basis of the language of the UPC. Consequently, Arizona courts would be likely to come to the same conclusion: ordinarily, trust contests must be filed in the state where the trustee resides.

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