Florida Probate Litigation Lawyer Blog

No matter how good a person’s intention may have been in creating a trust, as with any matter involving money and property, disputes often occur. Beneficiaries in Fort Lauderdale may contest the actions of the Trustee located in Miami. As with other legal disputes, it is often desirable to resolve a dispute over a trust without dealing with the time, expense, and burdens of the court system. This is why Florida Statute section 736.0111 permits people to enter into non-judicial settlement agreements. A non-judicial settlement agreement allows people to resolve a dispute themselves, without the court, and then enter into a contract that lays out whatever agreement was reached. Then, if a future dispute arises about the trust, a court can step in and enforce the terms of the non-judicial settlement agreement.

Non-judicial settlement agreements can be used to resolve a wide variety of issues that often cause problems when dealing with a trust. For example, non-judicial settlement agreements can be used to resolve disputes over (1) how the wording of a trust should be interpreted, (2) a trustee’s report or accounting of the money or property in the trust, (3) whether to direct a trustee to take or not to take a certain action, (4) granting power to a trustee to take certain actions, (5) appointing or removing a trustee, and (6) determining a trustee’s compensation.

There are some things people should be aware of before entering into a non-judicial settlement agreement. Settlement agreements can only be valid if the terms of the agreement could have been approved by a court if the dispute had actually been filed in court. Also, a non-judicial settlement agreement will not be valid if it causes a result that is prohibited by the Florida Trust Code. For example, an agreement cannot modify or terminate a trust in a way or manner prohibited by the Trust Code. Because the Florida Trust Code is complex and because there is often a lot of money and/or valuable property at stake in a dispute over a trust, it is important that someone with experience helps negotiate and write a non-judicial settlement agreement or there is a risk that a settlement agreement will not be valid. If a settlement agreement is not valid, it will have absolutely no effect on a trust and the individuals affected by the trust. In other words, an invalid non-judicial settlement agreement is not worth the paper it is printed on.

If you or someone you know is involved in a dispute over a trust and lives in the West Palm, Fort Lauderdale, or Miami-Dade area, the experienced legal team at Chepenik Trushin is ready, willing, and able to assist in all aspects of the dispute, including non-judicial settlement agreements. Please do not hesitate to contact us for an initial first consultation.

In addition to utilizing a trust to provide for your family, you can also create a trust to benefit a charitable organization. To qualify as a charitable trust, the benefiting party must be a charity pursuant to section 501(c)(3) of the Internal Revenue Code. Naturally, such entity must operate solely for religious, educational, and other charitable purposes whereby zero net earnings of the entity benefit any private shareholder or individual. Because donations to charitable organizations are tax deductible, a charitable trust serves as an easy way to provide for a charitable cause and achieve tax benefits.

Florida law, as emulated in section 736.1210 of the Florida Probate Code, encourages the use of charitable trusts and works to preserve the intent of any individual that seeks to provide for a charitable beneficiary through a trust. This intent of the Florida legislature is carried out further by section 736.0405 of the Florida Probate Code, which states that if the trust itself does not name a specific charity as a beneficiary, a court may select a charitable purpose or beneficiary. Of course, the court must consider the settlor’s intent wherever applicable when determining which charity will benefit under the trust.

Instead of creating a trust solely for the benefit of a charitable organization, many individuals name charities as beneficiaries to the remainder of the trust’s assets after the interests of other beneficiaries have terminated. For example, a trust may provide for one’s children, during their lifetimes, with the residuary of the trust going to a charity upon the passing of the children. This form of a trust is considered a split interest trust, in that it serves a purpose in addition to providing for a charitable purpose. Trusts can also be created to benefit one or more private foundations as well.

The trustee of a private foundation trust or a split interest trust owes fiduciary duties to both the settlor and the charitable beneficiaries. Under section 736.1204 of the Florida Probate Code, a trustee may not deprive the trust of any “tax exemption, deduction, or credit for tax purposes.” This section of the Code details the extent to which the trustee of a charitable trust must ensure that the trust is not subjected to unnecessary taxes under the Internal Revenue Code. Section 736.1206 of the Florida Probate Code also provides that the trustee of a trust created solely for charitable purposes may amend the trust instrument, with the consent of the charitable organization(s), so that it complies with section 736.1204(2) of the Code (“trustee of a private foundation trust shall make distributions at such time and in such manner as not to subject the trust to tax under s. 4942 of the Internal Revenue Code”). In other situations, the trustee may amend the trust to comply for tax purposes with the consent of the state attorney.

If you or someone you know wishes to create a trust for the benefit of a charitable organization and live in the West Palm, Fort Lauderdale, or Miami-Dade area, feel free to contact the experienced attorneys at Chepenik Trushin who can help you with your estate planning or probate litigation needs. Please feel free to contact us for an initial first consultation.