Does a Trustee Have Fiduciary Duties Under Florida Law?

Does a trustee have fiduciary duties? Yes. A trustee owes fiduciary duties because the trustee role carries them, and Florida law states the core ones. In plain terms, a trustee must manage trust property for the people the trust is meant to benefit, not for personal gain. This page describes where those duties show up in daily administration. Leslie V. Marenco is the responsible attorney for this page at Trust Counsel, PL in Coral Gables.

What a Fiduciary Duty Means in a Trust

Yes, a trustee has fiduciary duties, and they come with the job. A fiduciary duty is a duty of trust and care. One person holds legal authority over property and must use it for someone else.

In a trust, the trustee holds the trust property. The beneficiaries are the people the trust is meant to help. The trustee does not own that property for personal use.

Florida puts the basic standard in one sentence. A trustee must administer the trust in good faith, following its terms, its purposes and the interests of the beneficiaries (Fla. Stat. § 736.0801). That standard starts the moment a trustee accepts the role.

Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries.

The Core Fiduciary Duties Under Florida Law

Under Fla. Stat. § 736.0802, as between a trustee and the beneficiaries, a trustee must administer the trust solely in the interests of the beneficiaries. Three of them drive most trust questions.

• Loyalty. As between a trustee and the beneficiaries, the trustee must administer the trust solely in the beneficiaries’ interests, but the statute does not preclude certain transactions if fair to the beneficiaries, such as reasonable compensation paid to the trustee (Fla. Stat. § 736.0802).
• Impartiality. If a trust has two or more beneficiaries, the trustee must act impartially and give due regard to each one’s interests (Fla. Stat. § 736.0803). For example, a trust may pay income to one person and leave the rest to a remainder beneficiary, the person who takes what is left at the end. The trustee must weigh both interests.
• Prudent administration. A trustee must administer the trust as a prudent person would. The trustee must use reasonable care, skill and caution (Fla. Stat. § 736.0804).

The statute asks the trustee to consider the trust’s purposes, terms and distribution requirements. It also asks the trustee to consider other circumstances of the trust. How these standards apply depends on the trust’s terms and the facts.

Managing Trust Property and Keeping Records

A trustee must protect trust property and keep clear records. These two duties cover much of the day-to-day work.

Florida requires a trustee to take reasonable steps to control and protect trust property (Fla. Stat. § 736.0809). The trustee must also keep clear, distinct and accurate records of the trust. The trustee must keep trust property separate from the trustee’s own property (Fla. Stat. § 736.0810).

Good records usually include bank and brokerage statements, receipts and a transaction history. They also include documents that show why the trustee made each major decision. Trust accounts should be clearly labeled as trust property.

Records matter because they show how the trustee acted. A trustee who cannot document decisions may have trouble showing that prudent administration was followed. Where feasible, the trust property should be designated so that records kept by someone other than the trustee show the trust’s interest.

Distributing Assets and Communicating With Beneficiaries

A trustee must follow the trust terms when making distributions. The trustee must also keep qualified beneficiaries informed about the trust.

Distributions must treat the beneficiaries fairly, not only the one who asks. The impartiality duty applies when the trustee decides who gets what and when.

Florida requires a trustee to keep qualified beneficiaries reasonably informed about the trust and its administration, but while a trust is revocable this duty runs only to the settlor (Fla. Stat. § 736.0813). Within 60 days after accepting a trust, the trustee must give the qualified beneficiaries notice of the acceptance, the trustee’s full name and address, and that the fiduciary lawyer-client privilege applies to the trustee and any attorney the trustee employs. This notice rule does not apply to a trustee who accepted the trusteeship before the Florida Trust Code took effect. It also does not apply to an irrevocable trust created before then, or to a revocable trust that became irrevocable before then.

Disagreements over distributions often lead beneficiaries to ask questions about how the trust is run.

A Trustee’s Liability Under Florida Law

Misappropriation means taking or using trust money for yourself.

For Florida’s rules, the controlling text is in Chapter 736, and the sections on breach and removal below cover those rules.

Can a Trustee Also Be a Beneficiary?

Florida’s duties still apply to every decision the trustee makes.

When the trustee’s personal interest is involved, the law is strict. Voidable means a beneficiary can ask to undo the deal. The transaction is protected only if the trust terms authorized it or another listed exception applies (Fla. Stat. § 736.0802).

Here is an example. A trustee who is also a beneficiary wants trust property sold to a company the trustee owns. The sale helps the trustee personally. The other beneficiaries may lose out, and they can challenge the sale unless the trust authorized it or another exception in the statute applies.

What a Trustee Cannot Do

A transaction involving trust property that the trustee enters into for personal gain, or that is otherwise affected by a conflict between the trustee’s fiduciary and personal interests, is voidable by an affected beneficiary unless an exception applies. The main limits follow from the duties above.

• Self-dealing. A trustee’s transaction for the trustee’s own account, or one otherwise affected by a conflict between personal and fiduciary interests, is voidable by an affected beneficiary unless an exception applies. That deal can be voidable, as explained above.
• Ignoring the trust terms. A trustee must administer the trust in accordance with its terms and purposes (Fla. Stat. § 736.0801). Acting outside the authority the trust gives creates risk.
• Mixing funds. A trustee must keep trust property separate from the trustee’s own property (Fla. Stat. § 736.0810). Paying personal bills from a trust account breaks that rule.
• Neglecting protection. A trustee must take reasonable steps to protect trust property (Fla. Stat. § 736.0809).

What Happens If a Trustee Breaches a Duty

A breach of trust happens when a trustee violates a duty owed to a beneficiary. Florida gives the court several ways to respond.

A violation of a duty a trustee owes to a beneficiary is a breach of trust (Fla. Stat. § 736.1001). To remedy a breach, the court may compel the trustee to perform duties and order the trustee to account. The court may also remove the trustee, reduce or deny the trustee’s compensation, and order other appropriate relief.

Under Fla. Stat. § 736.1002(1), a trustee who commits a breach of trust is liable for the greater of the amount required to restore the value of the trust property and trust distributions to what they would have been without the breach, including lost income, capital gain, or appreciation that would have resulted from proper administration, or the profit the trustee made by reason of the breach.

The court may remove a trustee who has committed a serious breach of trust (Fla. Stat. § 736.0706). How much a trustee owes depends on the facts of each case.

Knowing When a Trustee Steps Down

A trustee can step down by following the trust’s procedure, giving notice or getting court approval. A successor trustee then takes over.

A trustee may resign under the procedure in the trust. A trustee may also resign on at least 30 days’ notice to the qualified beneficiaries, the settlor if living, and all cotrustees. A trustee may resign with court approval (Fla. Stat. § 736.0705). Resigning does not end liability for past acts.

When a trustee resigns, the procedure in the trust instrument governs, and notice goes to the cotrustees or, if there are none, to the successor trustee who has accepted the appointment or to the person with authority to appoint a successor trustee. Under Fla. Stat. § 736.0705(1), the person or persons who have the authority to appoint a successor trustee under the trust receive notice only if there is no cotrustee and no accepted successor trustee. Under Fla. Stat. § 736.0705(1)(a), a trustee may resign notwithstanding the terms of the trust upon at least 30 days’ notice to the qualified beneficiaries, the settlor, if living, and all cotrustees. Under Fla. Stat. § 736.0705(1), a resigning trustee gives notice first to any cotrustees, or if there are none, to the successor trustee who has accepted the appointment, or if there is none, to the persons who have the authority to appoint a successor trustee (Fla. Stat. § 736.0705).

To learn what the successor role means, read what a successor trustee means. For the first steps a new trustee faces, see first steps for a successor trustee.

If You Are Facing a Trustee Question Now

Maybe you are worried about how a trustee is handling a trust. Maybe you just inherited an interest in a trust you don’t understand. Maybe you were asked to accept a trustee role you never planned for. Any of these can feel stressful, and the duties above can seem abstract until they affect you.

For background on disputes involving trustees, see trust litigation attorney services.

Frequently Asked Questions