Duties of a Trustee

Many Floridians choose to establish a trust as part of their estate planning. Many people associates “trust funds” with the uber-wealthy, but there are many ways in which trusts can protect assets for those in the middle class too. Trusts allow individuals to deposit, cash, real estate, stock and other valuable assets into one location, decide on the beneficiaries and then outline various stipulations. For instance, you may decide the funds can only be used for education or benefit payments are to be made monthly installments, rather than in a lump sum.

There are revocable trusts (also referred to as “living trusts,” which can be modified or altered) and irrevocable trusts (which cannot be changed without permission from beneficiary. Revocable trusts have no creditor protection, while irrevocable trusts do. Both trusts can help your estate avoid probate.

As The Ansara Law Firm’s Fort Lauderdale probate litigation attorneys can explain, assets that go into a trust are managed by a trustee, with duties and powers outlined in Chapter 736 Part VIII of Florida Trust Code.

It is very important for the trustee to know what the duties of a trustee are, especially when the trustee is someone (i.e., family member or friend) who lacks experience in managing trusts on a regular basis. There are many potential pitfalls that can arise, resulting in the need for probate litigation. But some of this may be avoided when both the trustee and beneficiaries are properly represented.

Our Fort Lauderdale attorneys are often contacted by beneficiaries of a trust who never receive a proper trust accounting or who are concerned that trustee has breached his/ her fiduciary duties.

A fiduciary duty is the highest standard of care. The person who owes the duty is typically referred to as the “fiduciary,” while those to whom the duty is owed are referred to as “beneficiaries.”

The duties of a trustee come in many different forms within the legal system, and one of those is the duty between a trustee and beneficiaries of that trust. In this arrangement, the fiduciary/ trustee has legal ownership of the property/ assets, but owes a duty to make sure all decisions are made in the best interests of the beneficiaries.

Some of the fiduciary duties of a trustee include:

• Prudent Administration and Good Faith. A trustee is not free to do whatever he or she wishes or thinks is best with the assets and property. The trustee must act in the best interests of the beneficiaries (F.S. 736.0802) – usually the grantor’s family members, charities, etc. A trustee cannot favor certain beneficiaries over another (F.S. 736.0803). In line with F.S. 736.0801, trustees must administer the trust in good faith, in accordance with its terms and purposes and also in the interests of beneficiaries. Also, per F.S. 736.0804, trustees must administer the trust as a prudent person would, exercising reasonable care, skill and caution.

• Control, Protection and Collection. F.S. 736.0809 requires trustees to take reasonable steps to control and protect the trust property. In addition to this, trustee is required under F.S. 736.082 to take reasonable steps to compel a former trustee or other person to deliver trust property and to redress any breach of trust known to have been committed by a former trustee. Our Fort Lauderdale lawyers can help you hold a trustee accountable for failing to meet this obligation.

• Recordkeeping, Identification and Accounting. A trustee is required under F.S. 736.0810 to maintain a clear, distinct and accurate record of trust administration. A trustee must keep his/ her property separate from that of the trust. The trustee must also, under F.S. 736.0813, keep all qualified beneficiaries of that trust reasonably informed of the trust and administration. This provision is complex, with requirements consisting of tight deadlines (60 days) to notify of the creation of an irrevocable trust (usually after grantor dies), to give notice of acceptance of the trust and to, upon reasonable request, provide any qualified beneficiary with a complete copy of the trust. Per F.S. 736.08135, the trust accounting by trustee must be reasonably understandable, showing all gains, losses and compensation paid to trustee/ agents. Proper accounting and recordkeeping is a top reason why it pays to have assistance from an experienced attorney who can help ensure your records and accounting meet this criteria.

There have been many cases in Florida of trustees removed for malfeasance. It’s becoming even more frequent as trust planning has become an increasingly popular tool for estate planning. Trust an experienced probate lawyer to help you research your options.

Contact the Fort Lauderdale Lawyers at The Ansara Law Firm at (954) 761-3641 or by email. Serving Broward, Miami-Dade and Palm Beach Counties.