A trustee has many important duties. They have obligations to beneficiaries and to the trust. Their duties may be altered by the trust, by the creator of the trust or even by the beneficiaries. A trustee should be chosen carefully to ensure they can fulfill the purposes of the trust. According to the Florida Statutes section 736.0801, the trustee has the duty to administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with the laws of Florida. A settlor (trust creator) may choose anyone they wish to serve as trustee. It could be a family member trustee located locally in Miami, Ft. Lauderdale, or West Palm Beach. A trustee could also be a corporate trustee located within Miami-Dade County, Broward County or somewhere else.
The trustee also has a duty of loyalty, required by the Florida Statutes section 736.0802. The trustee has to administer the trust solely in the interests of the beneficiaries. A conflict between the trustee’s fiduciary obligation to the beneficiary and the trustee’s own personal interests may make a transaction voidable by a beneficiary affected by a transaction. Some transactions which presume a conflict between a beneficiary and trustee involves situations when the transaction is entered into by the trustee with the trustee’s spouse, the trustee’s children, siblings, or parents.
For example, if a trustee sells $500,000 worth of trust assets to her husband at a lower price of $400,000 there is a potential for a conflict between the obligations the trustee owes to the beneficiary and the trustee’s own personal interests. The beneficiary has remedies available. However, if the transaction may have been authorized by the terms of the trust; approved by the court; or if the beneficiary does not commence a judicial proceeding in time, the beneficiary may loose the relief available to her. It is important that a beneficiary of a trust contact an attorney in this situation to see what relief is available to them. Even a transaction not concerning trust property may involve a conflict between personal and fiduciary interests if the transaction concerns an opportunity that properly belonging to the trust.
The Florida Statutes section 736.0803 requires that the trustee act impartially between beneficiaries. Florida law requires that a trustee exercise reasonable care, skill, and caution in administering the trust. The trustee shall only incur expenses that are reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee. A trustee also shall also take reasonable steps to take control of and protect the trust property. According to section 736.0810 a trustee shall keep clear, distinct, and accurate records of the administration of the trust, the trustee must also keep trust property separate from the trustee’s own property. If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of two or more separate trusts.
As detailed, there are very important duties and powers of a trustee. The Florida Statutes and related case law show that the Trustee must be very careful in all decisions which they make. If you or someone you know lives in the West Palm, Fort Lauderdale, or Miami-Dade area and is a current trust beneficiary who believes their trustee may be violating their duties, the experienced attorneys at Chepenik Trushin will help with these probate litigation needs. Please feel free to contact us for an initial consultation