When Can a Florida Court Remove a Trustee?

What makes a trustee unfit? A trustee is unfit when the trustee cannot or will not run the trust properly for the people it is meant to help. Florida courts can remove a trustee on that ground and on several others. Trust Counsel, PL is in Coral Gables, Florida. The firm advises and represents trustees, personal representatives and beneficiaries in probate and trust disputes.

What makes a trustee unfit under Florida law

A trustee is unfit when the trustee cannot or will not administer the trust effectively. Florida names this as one ground for removal. Under Fla. Stat. § 736.0706, a court may remove a trustee when the trustee’s unfitness, unwillingness, or persistent failure to administer the trust effectively leads the court to find that removal best serves the beneficiaries’ interests.

The court looks at the facts and the trust terms. A trustee’s core duties start with § 736.0801. That section requires good faith administration under the trust’s terms and purposes and in the interests of the beneficiaries.

Only a court decides removal. The settlor, a cotrustee, or a beneficiary may ask the court to act. The court may also act on its own. The real question is whether the trustee’s conduct fits a ground the statute names. For broader context on trustee roles, contact Trust Counsel, PL.

How serious is a breach of fiduciary duty?

A serious breach of trust is one of the grounds a court can use to remove a trustee. Ordinary mistakes are a different matter, and the facts matter when a court weighs them. The statute ties removal to a serious breach, not to every error.

A trustee owes several core duties. The trustee must act in good faith and follow the trust’s terms and purposes, under § 736.0801. The trustee must act solely in the beneficiaries’ interests, under § 736.0802. The trustee must also administer the trust as a prudent person would.

Courts look at what the trustee did, what it did to the trust property, and whether the problem keeps happening. A breach can bring court orders even if the trustee is never removed. Under § 736.1001, a violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust, and to remedy a breach that has occurred or may occur, the court may order the trustee to account, reduce or deny the trustee’s compensation, or order other appropriate relief.

Mismanagement of trust assets

Mismanagement means the trustee handles trust property in a way a prudent person would not. Neglect and inaction count, too. A trustee can mismanage a trust without making a single bad trade.

Under § 736.0804, a trustee must administer the trust as a prudent person would. The trustee considers the trust’s purposes, terms, distribution requirements, and other circumstances. The trustee must also exercise reasonable care, skill, and caution.

Examples courts may review include property left unprotected, insurance not kept in place, and investments left to drift while assets lose value. These examples describe conduct. They are not a rule that every loss is a breach.

Records matter. Under § 736.0810, a trustee must keep clear, distinct, and accurate records of the trust’s administration. The trustee must also keep trust property separate from the trustee’s own property. Clear records show what the trustee decided and why.

Failure to distribute assets as the trust directs

A trustee must follow the distribution terms in the trust document. That document is the starting point for any review.

Under § 736.0801, the trustee administers the trust in accordance with its terms and purposes. Trusts can control when and how beneficiaries receive assets. The settlor’s wishes should be clearly stated in the trust document.

Beneficiaries may raise concerns about unexplained delays, withheld distributions, and payments to the wrong people. If a breach results in a distribution that is too small or too large, the court can act. Under § 736.1001, the court may require payment to restore the beneficiary. It may also require withholding from future distributions or return of an overpayment.

Lack of communication or accounting

A trustee must keep qualified beneficiaries reasonably informed about the trust and its administration. That duty appears in § 736.0813. Silence is not a neutral position under this section.

Upon reasonable request, the trustee must give a qualified beneficiary a complete copy of the trust instrument. The trustee must also share relevant information about the trust’s assets, liabilities, and administration. Both duties apply on reasonable request.

For an irrevocable trust, the trustee must provide an accounting to each qualified beneficiary at least annually. The trustee must also account on termination or on a change of trustee.

Under § 736.08135, an accounting must show all cash and property transactions. It must also show significant transactions, including compensation paid to the trustee and the trustee’s agents. Repeated failure to provide information can also fall under the persistent-failure ground in § 736.0706.

Conflicts of interest and self-dealing

A conflict of interest exists when a trustee’s personal interests compete with the beneficiaries’ interests. Florida law requires the trustee to put the beneficiaries first. Under § 736.0802, a trustee must administer the trust solely in the beneficiaries’ interests.

Conduct courts may review includes buying trust property, borrowing from the trust, or hiring relatives or businesses the trustee controls. These are examples of situations where the trustee’s own interests may be in play. Each one turns on the transaction and the trust terms.

The court can also step in before a transaction closes. Under the same section, the court may appoint a special fiduciary to act on any proposed transaction that might violate the section if the trustee enters it.

A conflict can be serious even when it is not a theft. The question is whether the trustee acted solely for the beneficiaries. A court reviews the transaction against that duty.

Unwillingness or persistent failure to administer the trust

Persistent failure means a trustee keeps failing to run the trust. A single slip is different from a repeated pattern. Under § 736.0706, unfitness, unwillingness, or persistent failure is a ground for removal.

Examples include leaving the trust unadministered for long stretches, ignoring deadlines, and missing required tax or administrative filings. These examples show a pattern of inaction. They are not the same as one late reply.

A temporary delay is different from a pattern that harms the trust. The statute’s word “persistent” matters. A court looks at whether the failure keeps going and what it does to the trust.

When a trust needs more help, the court has options. Under § 736.0704, the court may appoint an additional trustee or special fiduciary whenever it considers the appointment necessary for administration.

Hostility toward beneficiaries and co-trustees

Hostility is not listed as its own ground for removal. Hostile conduct still matters when it blocks the trust from being run. The focus is on whether administration is harmed.

Under § 736.0706, a court may remove a trustee when lack of cooperation among cotrustees substantially impairs administration. That ground can arise in disputes between co-trustees.

Cotrustees have duties to each other. Under § 736.0703, cotrustees who cannot agree unanimously may act by majority. Each cotrustee must also use reasonable care to prevent a cotrustee from committing a serious breach of trust.

Conduct courts may examine includes threats, hostile messages, refusal to cooperate, and efforts to keep beneficiaries from information. Keeping beneficiaries in the dark runs into the information duties in § 736.0813.

Can a trustee sue a beneficiary?

A trustee and a beneficiary can have claims against each other. The trust terms and Florida law shape those claims. Which claims hold up depends on the facts of the case.

Where a breach-of-trust claim or defense is raised in a proceeding, Fla. Stat. § 736.0802 addresses attorney fees. Under § 736.0802, the court must deny that motion unless it finds a reasonable basis to conclude there has been a breach of trust.

Even with that basis, the court may still deny the motion for good cause. That is one reason the trustee’s own conduct gets close attention in these disputes.

Good faith, loyalty, and prudence still apply to the trustee during any dispute with a beneficiary.

Remedies for breach of trust and the petition for removal

A court can order several remedies for a breach of trust. Removal is one of them. The court does not have to choose just one remedy.

Under § 736.1001, the court may compel the trustee to perform duties, enjoin a breach, and order an accounting. It may also appoint a special fiduciary, suspend the trustee, or remove the trustee. The court may void an act of the trustee or trace trust property.

A removal request starts with a request to the court. Under § 736.0706, the settlor, a cotrustee, or a beneficiary may ask the court to remove a trustee. While the request is pending, the court may order relief to protect the trust property or the beneficiaries.

If a trustee leaves, the trust must fill the seat when required. For a noncharitable trust, the vacancy is filled first by a person named in the trust. If none, it is filled by unanimous agreement of the qualified beneficiaries, and then by a court appointee. Under § 736.0704, a vacancy in a trusteeship occurs if, among other things, a trustee resigns, is disqualified or removed, or dies.

How a trustee steps down and why someone takes the role

A trustee steps down in one of two main ways. The trustee can resign, or a court can remove the trustee. Resignation has its own rules.

Under § 736.0705, a trustee may resign on at least 30 days’ notice or with court approval. A trustee may also resign on at least 30 days’ notice to the qualified beneficiaries, the settlor if living, and all cotrustees. Or the trustee may resign with court approval.

Resigning does not end past responsibility. Under the same section, a resigning trustee’s liability for acts or omissions is not discharged by the resignation.

A trustee who serves is paid under the trust terms or the statute. Under § 736.0708, if the trust does not specify compensation, the trustee is entitled to compensation that is reasonable under the circumstances.

People accept the role for many reasons, such as serving a family member’s trust. Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries.

Where to start if you have concerns about a trustee

Start by gathering the trust document, any accountings you have, and a dated list of the conduct that worries you. A clear timeline makes the situation easier to review.

You may be reading this because a parent’s trust has gone quiet. Or a co-trustee may refuse to share records. That is a hard position to be in, especially when you did not choose it.

Pull together what you can. Include the trust, account statements, letters or emails sent to the trustee, and the dates you asked for information. Note any reply, or the lack of one.

Frequently asked questions