5 Legal Duties of a Trustee in Florida
What exactly does a trustee do? This is a question we frequently get when advising clients on creating a revocable living trust. The short answer is that the trustee is the person responsible for managing the trust’s assets.
The longer answer is that the trustee is charged with carrying out several legal duties outlined in both the trust instrument and Florida law. Here are five essential duties that every trustee needs to follow:
- Duty to Administer the Trust
The basic job of any trustee is to “administer the trust in good faith,” according to Florida law. Ultimately, the trustee must always act in the best interests of the beneficiaries of the trust, as well as any other purposes outlined by the grantor, i.e. the person who created the trust. A trustee is expected to act as a “prudent person”
- Duty of Loyalty
Once again, this duty refers to the relationship between the trustee and the beneficiaries. Most of the time individuals create trusts and name themselves as the initial beneficiary and trustee. This makes carrying out the duty of loyalty rather easy. But after the grantor dies and a successor trustee takes over, it is important to make sure that individual will follow the duty of loyalty and only take actions that benefit the trust and the beneficiaries.
- Duty of Impartiality
In many situations a trust will have multiple beneficiaries. For example, let’s say Josephine has three children. She creates a trust that states each child will inherit one-third of the trust’s assets upon her death. The trust also names one of the children as successor trustee. This child-trustee has a duty to act impartially when performing her duties. She cannot abuse the office to benefit herself at the expense of her siblings.
- Duty to Inform and Account
Florida law states a trustee must “keep the qualified beneficiaries of the trust reasonably informed of the trust and its administration.” Among other things, this means a new trustee must inform of certain events, such as the appointment of a new trustee or the point at which the trust becomes irrevocable, which is usually when the original grantor dies. With respect to an irrevocable trust, the trustee must also provide a “trust accounting,” i.e. current financial statements detailing the trust’s assets and its activities since the settlor’s death.
- Duty to Distribute Trust Income
Trusts often continue for some time after a settlor’s death and may direct the trustee to pay the income from the trust’s assets to the beneficiaries at certain specified intervals. The trustee has a legal duty to distribute this income as directed. And if for some reason the trust does not specify how often to distribute income, Florida law requires the trustee to do so at least once per year.
Do You Have Additional Questions About Trustees?
This is just a brief overview of some of a trustee’s legal duties. If you have additional questions regarding the role of a trustee, or trusts in general, you need to speak to a qualified Fort Myers estate planning attorney. Call the Kuhn Law Firm, P.A., at 239-333-4529 to speak with a member of our team today.
Source:
leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736.html
