Judges disagree on trust jurisdiction issue

In a matter of first impression, Indiana Court of Appeals judges disagreed whether an Indiana probate court had subject matter and personal jurisdiction over a trust based in Virginia.

In the case In re the matter of: the Marvine W. Alford Trust, Joseph and Sarah Rogers v. J. Robert Lyons, as Trustee, No. 49A02-0805-CV-413, Chief Judge John Baker and Judge Paul Mathias agreed with a Marion Superior judge's dismissal of a petition to remove J. Robert Lyons as trustee for lack of subject matter jurisdiction. The majority examined Marvine W. Alford's will and trust documents and ruled the trust was to be administered in accordance with Virginia laws, where Lyons lived.

Joseph and Sarah Rogers are the guardians of Shirley Rogers, who is the granddaughter of Alford. Alford had two children – Lyons and Marvine Mae Rogers, who is Shirley's mother. The Rogerses lived in Indiana and requested Lyons send a copy of Alford's will, the trust instrument, and a current statement of accounts after Marvine Mae's death. After Lyons delayed in sending the documents, the Rogerses filed a petition in the trial court to remove him as trustee, and sought an accounting and award of attorney fees.

Lyons filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Indiana Trial Rule 12(b)(1), which the trial court granted.

The majority reviewed provisions of the Section 199 Restatement (Second) of Trusts, Restatement of Conflict of Laws, Indiana Code, and caselaw to help them affirm the trial court's dismissal of the complaint. In the majority's view, the provisions in Alford's will instructing Lyons "of Alexandria, Virginia" to become trustee expressed her intent that Lyons administer the trust in Virginia, wrote Chief Judge Baker. Any jurisdiction Indiana courts may have had over the trust ended when Alford's estate assets were transferred to Lyons as trustee to be held and administered in Virginia.

"Moreover, it is undisputed that Lyons has continuously and exclusively administered the Alford Trust and the assets in Virginia, and he has been a resident of Virginia since Alford executed her will," he wrote. As such, all claims regarding the administration are to be heard in Virginia courts.

Judge Elaine Brown dissented, writing that she doesn't believe the will's reference to "Robert Lyons, of Alexandria, Virginia" shows an intent the trust should be administered in Virginia. Judge Brown wrote the trial court had subject matter and personal jurisdiction over the case and she would hold the court erred by granting Lyons' motion to dismiss.