Your Trustee Has a Side Hustle? Why That Might Be a Problem
Trusts are supposed to run quietly in the background, with a trustee managing assets according to someone else’s wishes. Most of the time, that’s exactly what happens. But every so often, a trustee’s own interests start bumping up against the interests of the people the trust was built to protect. When that happens in a Florida trust, it isn’t just an awkward situation. It can be a legal problem with real consequences for the trustee, and real remedies for the beneficiaries affected by it.
What a Conflict of Interest Actually Looks Like
A trustee doesn’t need to be stealing money for a conflict to exist. Conflicts show up in subtler forms, including:
- Selling trust property to the trustee themselves, a friend, or a family member at a below-market price
- Investing trust assets in a business the trustee personally profits from
- Favoring one beneficiary, such as a spouse or child of the trustee, over others
- Charging excessive or unjustified fees for managing the trust
- Delaying distributions or information requests when a beneficiary starts asking questions
None of these require dramatic wrongdoing. A trustee juggling their own financial interests alongside the trust’s can drift into a conflict without necessarily intending to cause harm, but Florida law doesn’t leave much room for that kind of drift.
The Legal Standard: Loyalty Isn’t Optional
Florida imposes a strict duty of loyalty on trustees, and it isn’t a vague ethical guideline. Under Fla. Stat. § 736.0802, a trustee must administer the trust solely in the interests of the beneficiaries. The statute goes further, stating that any transaction affected by a conflict between the trustee’s personal interests and fiduciary duties can be voided by a beneficiary, unless a specific exception applies, such as court approval or advance authorization in the trust document itself.
In plain terms, self-dealing is presumed to be a problem until the trustee can show otherwise. That shifts the practical burden onto the trustee, not the beneficiary, once a questionable transaction comes to light.
Why These Conflicts Are Hard to Spot From the Outside
Beneficiaries often don’t have day-to-day visibility into how a trust is being managed. A trustee could be quietly steering business to a relative’s company, or valuing an asset in a way that benefits them personally, and a beneficiary might not notice anything until an accounting looks off or distributions seem smaller than expected. This information gap is part of why Florida law puts the burden on trustees to act transparently and in good faith, rather than requiring beneficiaries to catch every issue themselves.
Signs Beneficiaries Should Watch For
If something feels off about how a trust is being run, a few warning signs are worth paying attention to:
- Requests for financial records or accountings that go unanswered or get delayed
- Trust property being sold or leased to someone connected to the trustee
- Trustee fees that seem disproportionate to the work being done
- Investment decisions that appear to benefit the trustee more than the trust
- A sudden shift in how distributions are calculated or explained
Spotting one of these on its own doesn’t necessarily mean something wrongful is happening, but a pattern of them is worth taking seriously.
Moving Forward
A suspected conflict of interest doesn’t automatically mean a trustee acted in bad faith, but it does mean the situation deserves a closer look. Beneficiaries have real legal tools available, from demanding a formal accounting to petitioning a court to remove a trustee who has breached their duty. If you’re a beneficiary who suspects a trustee is putting personal interests ahead of the trust, Edward J. Jennings, P.A. can review the situation and explain your options going forward. Reach out to our Fort Lauderdale trustee duties lawyers by calling 954-764-4330 or submitting our online contact form.
