Does a Trustee Have More Power Than a Beneficiary?

Quick answer: who has more power in a Florida trust?

A beneficiary holds enforceable rights, including the right to information, but usually does not run the trust. § 736.0105 says the Florida Trust Code governs a trustee’s duties and powers and a beneficiary’s rights, unless the trust terms provide otherwise.

The trust document and the trustee’s fiduciary duties set the limits. A trustee who breaks those duties can be challenged in court. How the rules apply depends on the trust terms and the facts of each case.

Power and rights are different things. Power lets someone make decisions. A right lets someone insist that the decision-maker follow the rules. For a wider view of trust disputes, read our trust litigation attorney page.

What a trustee controls

A trustee generally holds legal title to trust property and manages it under the trust document. Florida law gives the trustee broad default powers. § 736.0815 allows a trustee, without court approval, to use the powers the trust gives. Fla. Stat. § 736.0815 reads: “(1) A trustee, without authorization by the court, may, except as limited or restricted by this code, exercise: (a) Powers conferred by the terms of the trust.” Unless the trust limits them, the trustee may also use the powers an unmarried competent owner has over their own property.

§ 736.0816 lists specific powers. Subject to any limits in the Florida Trust Code, Fla. Stat. § 736.0816 allows a trustee to acquire or sell property, for cash or on credit, at public or private sale. When the trust ends, the trustee may distribute the property to the people entitled to it, after keeping a reasonable reserve for debts, expenses and taxes.

People often ask what a trustee of an estate does. In practice, the trustee invests and manages assets, pays expenses, keeps records and makes distributions as the trust directs. These powers are not unlimited. Every exercise of a power is subject to fiduciary duties under the same section.

The trust document can widen or narrow these powers. A trust can give the trustee more freedom, or it can add limits that the default rules would not impose. Read the trust terms before assuming what a trustee can do.

What a beneficiary holds

Being a beneficiary does not, by itself, give someone the trustee’s powers.

Beneficiaries do have real rights to information. Upon reasonable request, a trustee must give a qualified beneficiary a complete copy of the trust instrument. The trustee must also share relevant information about trust assets, liabilities and administration. These duties appear in § 736.0813.

For an irrevocable trust, the trustee must provide a trust accounting to each qualified beneficiary at least once a year. If a family trust company, licensed family trust company, or foreign licensed family trust company (as defined in s. 662.111) is the trustee, the trust terms may permit accounting only at the 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 must also account when the trust ends or when the trustee changes. A qualified beneficiary may waive the annual accounting, but the waiver must be in writing. While a trust is revocable, these duties run only to the settlor.

Do all beneficiaries have to agree? Under § 736.0105, the trust terms control except for the listed provisions. The document is the first place to look.

Where a trustee’s power ends

A trustee’s power stops at the trust terms and the trustee’s duties to beneficiaries. The trustee must administer the trust in good faith, in line with its terms and purposes and the beneficiaries’ interests (§ 736.0801).

The duty of loyalty requires the trustee to act solely in the beneficiaries’ interests, as between trustee and beneficiary (§ 736.0802). If a trust has two or more beneficiaries, the trustee must act impartially (§ 736.0803). The trustee must also act as a prudent person would, with reasonable care, skill and caution (§ 736.0804).

A violation of a duty owed to a beneficiary is a breach of trust (§ 736.1001). Under Fla. Stat. § 736.1001, a violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.

Section § 736.0206 lets the court review the propriety of a trustee’s employment of any person, including any attorney, and the reasonableness of any compensation paid to that person or to the trustee. For the governing rules, see key rules for Florida trusts.

Undue influence is a separate issue. If the creation, amendment, or restatement of a trust was procured by fraud, duress, mistake or undue influence, the trust or the part so procured is void (§ 736.0406). Readers who suspect pressure on the person who made the trust can review how undue influence cases are evaluated.

Can a beneficiary also serve as trustee, and how is that different from a personal representative?

A trustee and a personal representative (often called an executor) are different roles.

Florida’s directed-trust statute lets some trustee responsibilities be assigned to another person.

Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. The firm itself does not act as trustee or personal representative.

Talk with Trust Counsel about your trust question

If you are a beneficiary, a trustee may have refused to share records, made a distribution you did not expect, or asked you to sign papers. Those questions can feel urgent during a time of loss. Trust Counsel, PL, in Coral Gables, can help you sort through them.

The first consultation is free, confidential, and carries no obligation to continue. Call (305) 707-7126 or contact Trust Counsel online.

Leslie V. Marenco is the responsible lawyer for this page.