Administering a Florida Trust? Know Your Duties Before You Act

If you were just named trustee of a family trust, you probably want to know what to do first. Knowing how to administer a trust in Florida means managing trust property under the trust’s written terms and the Florida Trust Code. It also means keeping beneficiaries informed and keeping clear records. This guide covers the roles, the first steps after a death, the trustee’s core duties and the rights beneficiaries have.

What Trust Administration Involves in Florida

Trust administration is the work of managing and distributing trust property under the trust’s terms. It usually begins when the person who created the trust dies or can no longer manage their affairs. With a living trust, the trustee may also manage property while the creator is still alive.

The job covers collecting assets, paying valid debts, keeping records, informing beneficiaries and distributing property as the trust directs. Most of the work follows the trust document, so reading it closely is the first task.

Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. Leslie V. Marenco, one of the firm’s lawyers, is the responsible lawyer for this page.

The firm’s only office is in Coral Gables, Florida. We serve clients in Boca Raton, West Palm Beach, Doral, Kendall, Pinecrest, Key Biscayne and Aventura. The sections below cover roles, planning, funding, first steps, trustee duties and beneficiary rights.

Who Does What: Settlor, Trustee, Successor Trustee and Beneficiaries

Each role has its own job, and the trust document sets most of the details. The settlor is the person who created the trust and set its terms.

The trustee manages trust property and follows the trust’s terms. Under § 736.0801, once a trustee accepts the role, the trustee must administer the trust in good faith. The trustee must follow the trust’s terms and purposes and the beneficiaries’ interests.

A successor trustee takes over when the first trustee can no longer serve. Under § 736.0704(1), a vacancy occurs when a designated trustee declines, cannot be identified or does not exist, or when a trustee resigns, is disqualified or removed, dies or is adjudicated incapacitated. Under § 736.0704(3), a vacancy that must be filled goes first to the person the trust names as successor trustee.

Beneficiaries are the people entitled to benefit from the trust. Qualified beneficiaries also have rights to notices and information, which this guide covers later.

Attorneys advise trustees and beneficiaries on duties, filings and disputes. One person can hold more than one role. The trust document controls who holds each role, so check it before assuming who is in charge.

Avoiding Probate Court Delays and Costs With a Funded Trust

A funded trust can keep many assets out of a probate case. Property titled in the trust is generally handled under the trust’s terms rather than through a probate estate.

Probate is the court process for settling a person’s affairs when property stays in that person’s own name. A trust works differently. It holds property under its own terms, and the trustee manages that property without the same court steps for each asset.

That approach has a trade-off. Usually no court supervises each step, so the trustee carries the duty to keep careful records and follow the trust’s terms. Those duties come from the Florida Trust Code and are covered below.

If you’re the trustee, this means much of the day-to-day work is yours to manage. The trust’s terms are your guide.

Assets outside the trust may still need probate. That is why funding, covered in a later section, decides how much the trust actually covers.

Living Trusts, Revocable Trusts and Types of Trusts in Florida

A living trust is a trust created while the settlor is alive. A revocable trust is one the settlor can change or end. Many living trusts are revocable, so people often use the two terms together.

Under § 736.0602(1), unless a trust’s terms expressly say it is irrevocable, the settlor may revoke or amend it. This does not apply to a trust created under an instrument executed before the effective date of this code. That power gives a revocable trust its flexibility during the settlor’s life.

An irrevocable trust works differently. Its terms say it cannot be changed in the same way, so the settlor cannot simply change it on their own.

A testamentary trust is created by a will and takes effect after the person dies. Other trust types exist too. The trust type shapes which rules apply, so read the document before you act.

Planning Ahead for Incapacity and Successor Trustees

A trust can name a successor trustee to step in if the first trustee cannot serve. Naming the right backup is one of the most important planning choices in the document.

Under § 736.0704(1), a trusteeship becomes vacant when a trustee dies, resigns, is disqualified or removed, or is adjudicated incapacitated, or when a designated trustee declines or cannot be identified or does not exist. Good planning answers who takes over at each of those points.

Some people also sign a durable power of attorney. It lets a chosen agent handle certain financial matters. It works alongside the trust and does not replace the trust’s own terms.

If no planning is in place, the situation can become harder. A guardian of a settlor’s property may exercise the settlor’s powers to revoke, amend or distribute trust property only as provided in s. 744.441, under § 736.0602.

Review the successor names against the trust document from time to time. Names that no longer fit can create confusion when the trust needs someone to act.

Funding the Trust: Titling Assets and Beneficiary Designations

Funding means moving ownership of assets into the trust or naming the trust as beneficiary of them. Without funding, the trust document alone often leaves property outside the trust.

Common assets include real estate, bank and brokerage accounts, business interests, and life insurance or retirement accounts with beneficiary designations. Each one needs its own check. A deed or account title that names the trustee is what moves the asset.

Titling documents deserve careful review before they are signed or recorded. A small error in a deed or account title can leave property outside the trust. An attorney can review these papers with you before they go out.

Assets left outside the trust may need separate handling, and that can include probate. Make a list of every asset when you first review the trust.

The First Steps After the Settlor Dies

The first steps are to find the trust document, secure the trust assets and confirm who is acting as trustee.

Start by locating the trust, every amendment and related estate planning papers. Then list the assets, including account statements, deeds and insurance policies. Keep those records in one place.

Florida sets notice deadlines. Under § 736.0813(1)(a), within 60 days after accepting a trusteeship, the trustee must notify the qualified beneficiaries of the acceptance. The notice must give the trustee’s full name and address. It must also say that the fiduciary lawyer-client privilege in s. 90.5021 applies.

For an irrevocable trust, § 736.0813(1)(b) sets a similar 60-day notice. It runs from the day the trustee learns the trust was created or became irrevocable. That notice also covers the trust’s existence, the settlor’s identity, the right to request the trust document and the right to accountings.

Next, identify debts, expenses and creditor claims the trust may need to address. Track income and expenses from the start, because trust administration can raise tax filing questions.

Trustee Duties Under the Florida Trust Code

The Florida Trust Code (Chapter 736) sets the core duties a trustee must follow. These duties form the baseline for how to administer a trust in Florida, and a trustee can be held to them.

Loyalty comes first. Under § 736.0802(1), as between the trustee and the beneficiaries, the trustee must administer the trust solely in the beneficiaries’ interests.

Prudence matters too. Under § 736.0804, a trustee must administer the trust as a prudent person would. The trustee considers the trust’s purposes, terms and distribution requirements, and must use reasonable care, skill and caution.

Records and separation are required. Under § 736.0810, a trustee must keep clear, distinct and accurate records. The trustee must also keep trust property separate from the trustee’s own property.

Pay follows the trust terms or the statute. Under § 736.0708(1), if the trust does not set the trustee’s compensation, the trustee is entitled to compensation that is reasonable under the circumstances.

When a trustee breaches a duty, a court has tools. Fla. Stat. § 736.1001(2) lists the remedies a court may order for a breach of trust that has occurred or may occur. These include compelling the trustee to perform the trustee’s duties, enjoining the trustee from committing a breach of trust, ordering a trustee to account, suspending the trustee, removing the trustee as provided in s. 736.0706, and reducing or denying compensation to the trustee.

Beneficiary Rights and When Trust Disputes Arise

Qualified beneficiaries have the right to information about the trust. They can also ask for a copy of the trust document and regular accountings. The trustee must keep them reasonably informed.

Under § 736.0813(1)(c), on reasonable request, the trustee must provide a complete copy of the trust instrument. Under § 736.0813(1)(e), on reasonable request, the trustee must also provide a qualified beneficiary with relevant information about the trust’s assets, liabilities and administration.

For an irrevocable trust, § 736.0813(1)(d) requires a trust accounting at least annually and on termination or change of trustee. Some licensed family trust companies may account to qualified beneficiaries only at termination, upon removal or resignation of the trustee, or upon a qualified beneficiary’s demand, if the trust terms permit this. Under trust accounting rules, an accounting must be a reasonably understandable report.

Time limits matter. Under § 736.1008(2), unless sooner barred by adjudication, consent, or limitations, a beneficiary is barred from bringing an action against a trustee for breach of trust with respect to a matter adequately disclosed in a trust disclosure document unless a proceeding to assert the claim is commenced within 6 months after receipt of that document or a limitation notice that applies to it, whichever is received later.

Common friction points include distribution timing, unclear trust terms, disputed expenses and trustee decisions. Disputes among beneficiaries, family members or creditors can lead to court involvement, according to ACTEC estate settlement guidance.

Trust litigation covers disputes over the trust’s terms and a trustee’s conduct. Probate litigation covers disputes that arise within the probate court process. The firm handles these matters for beneficiaries and trustees. The result of any dispute depends on the facts.

Costs and Tax Questions to Plan For

Trust administration costs usually come from attorney work, court filings where they are required, and accounting and tax preparation. The size and complexity of the trust affect each category.

Under Florida law, each party generally pays its own attorney’s fees unless a contract or statute provides otherwise, as the Florida Supreme Court explained in Price v. Tyler.

Trusts can raise income tax questions. Estate tax rules can also matter for larger estates. Track each asset and each expense so the records are ready when those questions come up.

The firm offers a free first discovery call, which is confidential and carries no obligation to continue.

Take the Next Step: Schedule a Free Discovery Call

A named successor trustee or beneficiary should start with the trust document, the notice dates and a list of assets. The questions below cover the most common first concerns.

If a death or incapacity has left you holding a trust document and unsure which step comes first, you can talk it through with the firm. Call (305) 707-7126 or schedule online to arrange a free discovery call.