Trustee Duties

In most cases, a person dies with a will (or maybe they die with no will at all). In some cases, though, a deceased person may have a trust in place.

When a person has a living trust, a trustee manages their assets upon their death. A trustee is a person or entity legally responsible for managing a trust’s assets and administering its terms for the benefit of the beneficiaries. They hold the legal title to the trust property and are entrusted with managing it according to the grantor’s wishes, as outlined in the trust document.

While a bank or other entity can be a trustee, typically the trustee is a family member who is also the beneficiary of the trust. In these cases, the individual assumes the dual role of managing the trust assets while also being entitled to receive benefits from the trust.

So what exactly does a trustee do? Under Section 737.0809 of the Florida Trust Code, a trustee shall take reasonable steps to take control of and protect the trust property. Here’s a look at what that means in more detail.

Trustee’s Duty of Impartiality

Under Section 736.0803, Florida Trust Code, a trustee must act impartially when administering a trust with multiple beneficiaries, giving due regard to each beneficiary’s respective interests. This means the trustee cannot favor certain beneficiaries or classes of beneficiaries over others and must protect all their interests equally.

For example, an income beneficiary cannot be given preferential treatment in asset management to the detriment of a remainder beneficiary who will inherit after the income beneficiary’s death.

Trustee’s Duty of Loyalty

A trustee must administer the trust solely in the interests of the beneficiaries. This prohibits self-dealing and placing the trustee’s personal interests above those of the beneficiaries. Certain transactions are presumed void unless specifically permitted under the Florida Trust Code.

Trustee’s Duty to Preserve and Manage Trust Assets

A trustee must take reasonable steps to control and protect trust property. Trust assets must be kept separate from the trustee’s personal property, with no commingling. A trustee also has a duty to make trust assets productive. The trustee must invest and manage assets as a prudent investor would, considering the trust’s purposes, terms, and circumstances. Investments should be evaluated in the context of the entire portfolio, with an appropriate balance between risk and return.

Trustee’s Duty to Inform and Account to Beneficiaries

Trustees must keep qualified beneficiaries reasonably informed about the trust and its administration. Upon reasonable request, the trustee must provide information on trust assets, liabilities, administration details, and a complete copy of the trust instrument.

For irrevocable trusts, the trustee must also provide an accounting at least annually, upon trust termination, or when a trustee changes. The accounting must identify all cash/property transactions, significant administrative actions, realized gains and losses, receipts and disbursements.

Seek Legal Help

While trusts typically do not have to go through probate, sometimes there are situations in which probate may be required. For example, when trust documents aren’t properly set up or assets aren’t transferred correctly, probate may be required.

The death of a loved one can be a devastating situation. Get the help you need from Fort Lauderdale probate litigation lawyer Edward J. Jennings, P.A. can handle your Florida probate dispute with skill and efficiency. Schedule a consultation with our office today. Fill out the online form or call 954-764-4330.

Source:

flsenate.gov/Laws/Statutes/2024/0736.0809