Trust administration guidance for trustees, personal representatives and beneficiaries

Professional Trustee Services Florida | Trust Counsel

A professional trustee for a Florida trust that holds a business is a paid, non-family fiduciary. The trustee holds legal title to the company interests and manages them under the trust terms and the company’s operating agreement. This page explains what that job covers, who it fits, and how the process runs. Trust Counsel, PL is a trusts and estates law firm with its only office in Coral Gables, Florida.

What a Professional Trustee Does for a Trust That Holds a Business

A professional trustee takes control of trust property when the family would rather not, or cannot, carry that role. When an owner moves an LLC or closely held company interest into a trust, the trust becomes the holder. That change decides who has authority after the owner dies or becomes incapacitated.

The trustee’s core job has three parts. The trustee holds legal title to the interests. The trustee follows the trust instrument. The trustee also works within the operating agreement. Under Fla. Stat. § 605.0105, the operating agreement governs relations among the members and between the members and the company. Under Fla. Stat. § 605.0106, a transferee is bound by the operating agreement, whether or not it agreed to it.

Trust Counsel’s attorneys can serve individually as trustee or personal representative, and this arrangement fits three kinds of families:

• Owners who want the business to keep running without a gap in management.
• Families with heirs where some are active in the company and others are not.
• Owners who do not want one relative carrying the management load and the family tension that comes with it.

The firm advises and represents trustees, personal representatives and beneficiaries. Trust Counsel’s attorneys can serve individually as trustee or personal representative. A personal representative (often called an executor) is the person who administers a probate estate.

What the Service Covers

The service covers the trustee’s authority over the business, the decisions that follow from it, and the records the trust must keep. Here is what that includes.

• Interest inventory. Listing each unit or percentage interest the trust holds, including any voting and nonvoting classes.
• Operating agreement review. Checking transfer limits, buy-sell terms and consent rules that limit what the trustee can do.
• Management decisions. Deciding whether to vote, take part in management, keep, sell or restructure an interest, and writing down the reasons.
• Distributions. Calculating and paying amounts to beneficiaries under the trust terms, with a record of each payment.
• Accounting. A trust accounting must show all cash and property transactions and all significant transactions affecting administration during the accounting period, including compensation paid to the trustee, under the Florida trust accounting statute.
• Beneficiary notice. Notices and accountings owed to qualified beneficiaries.
• Successor planning. Naming who takes over if the trustee resigns, dies or cannot serve.

The trustee must also prepare a trust accounting that is a reasonably understandable report, under Fla. Stat. § 736.08135. The trustee must administer the trust as a prudent person would, considering its purposes, terms, distribution requirements and other circumstances, and must use reasonable care, skill and caution, under Fla. Stat. § 736.0804.

How the Engagement Works, Step by Step

The work runs in five stages, from the first meeting through ongoing administration and later review.

1. First meeting. The attorneys review the trust, the operating agreement and the owner’s goals for the business.
2. Document review. The attorneys list the trustee’s powers and duties, plus open issues. Conflicts between the trust and the operating agreement go at the top of that list.
3. Acceptance and notice. A person designated as trustee accepts the trusteeship by substantially complying with a method of acceptance provided in the terms of the trust or, if the terms do not provide a method or the method is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship, under Fla. Stat. § 736.0701. A designee who does not accept within a reasonable time is treated as having declined. Within 60 days after acceptance, the trustee must notify the qualified beneficiaries, under Fla. Stat. § 736.0813.
4. For an irrevocable trust, the trustee gives each qualified beneficiary an accounting at least once a year, unless a family trust company, licensed family trust company, or foreign licensed family trust company, as defined in s. 662.111, is the trustee and the trust terms permit accounting only at termination of the trust, upon the removal, resignation, or other event resulting in a trustee ceasing to serve as a trustee, or upon demand of a qualified beneficiary or the representative of a qualified beneficiary. The trustee also accounts when the trust ends or the trustee changes.
5. Review at key events. The file is reviewed when the company is sold, ownership changes, beneficiaries change or the law changes. Each review ends with a written update.

Professional Trustee, Family Trustee, or Attorney Trustee

A family member often knows the owner and the business well. A professional trustee brings steady administration and neutrality among heirs. Each choice has trade-offs.

A family trustee knows the people and the history. That same closeness can pull the trustee into disputes between siblings. A professional trustee is outside the family, so the role is easier to keep neutral.

An attorney can also serve individually as trustee. Florida has a specific rule here. Under Florida law, an attorney serving as trustee is not entitled to compensation for serving as trustee if the attorney prepared or supervised the execution of the trust instrument that appointed the attorney as trustee, unless the attorney is related to the settlor or the required written disclosures were made to the settlor before the trust instrument was executed. This applies to trusts executed by a Florida resident on or after October 1, 2020, and to trusts amended by a Florida resident on or after that date if the trust agreement nominates the attorney who prepared or supervised the amendment, or a person related to that attorney, as trustee. The exception applies if the attorney is related to the settlor or makes the required disclosures before the trust is signed. The American College of Trust and Estate Counsel notes that a lawyer may be paid for serving as trustee, and that this raises ethical and legal issues, as discussed in ACTEC’s review of lawyers as trustees.

Co-trustees are another option. Under Fla. Stat. § 736.0703, cotrustees who cannot agree unanimously may act by majority. Before choosing, settle three questions. Who runs the business day to day? How will disputes among beneficiaries be handled? Who is the successor?

Trustee Compensation and Fees

Under Fla. Stat. § 736.0708, if the trust terms do not specify compensation, a trustee is entitled to compensation that is reasonable under the circumstances. A trustee who performs other services for the trust is also allowed reasonable pay for those services. When the trust instrument sets an amount, the trustee is paid that amount, but the court may allow more or less if the trustee’s duties are substantially different from those contemplated or the specified amount would be unreasonably low or high.

The firm does not publish hourly rates, retainers or market price ranges. The first consultation is free, confidential, and carries no obligation to continue. Any fee for the firm’s own work is set in writing before the engagement starts. Costs beyond attorney fees, such as filing fees or third-party valuation costs, are listed in that writing as well.

Why Work With Trust Counsel

Trust Counsel focuses on trusts and estates matters. The practice covers probate litigation, trust litigation, trust administration, estate tax planning, business succession planning, asset protection, guardianship and estate planning.

The firm’s only office is in Coral Gables, Florida. We serve clients in Fort Lauderdale, Boca Raton and Doral. Leslie V. Marenco is the responsible lawyer for this page. Tanya Vega is also one of the firm’s lawyers. The firm has more than one lawyer and also has support staff.

The attorneys review the documents, explain each duty in writing, and represent trustees, personal representatives and beneficiaries when disputes arise. That work covers both sides of a trust. Fiduciaries need clear duties. Beneficiaries need clear information and accountings.

Frequently Asked Questions

Schedule Your Free Initial Consultation

If your trust holds an LLC or family company and no one is ready to manage it, the time to plan is now. Call (305) 707-7126, schedule online at https://trustcounsel.com/contact/, or book a free strategy call through that page. Leslie V. Marenco or Tanya Vega can review your trust and operating agreement with you.