Freeze Trust Assets During a Dispute in Florida

Yes, a Florida court can limit what a trustee does with trust property while a dispute is pending. The two tools people ask about most are a temporary injunction, which is a court order that bars specific actions, and a lis pendens, which is a recorded notice that a lawsuit involves a particular piece of real estate. Neither one decides who is right. Both aim to keep things in place until a judge can hear the case. Here is how each works, what each cannot do, and what to expect if you need to freeze trust assets during a Florida dispute.

What Does It Mean to Freeze Trust Assets in a Florida Dispute?

A freeze is a court order or recorded notice that limits what a trustee can do with trust property while a claim is pending. Usually a beneficiary, heir or cotrustee asks for one because they fear a sale, a transfer or an unequal distribution.

A settlor, a cotrustee or a beneficiary can ask the court to remove a trustee. Removal and a freeze often come up together.

Freezes are usually sought inside a trust case, not as a stand-alone remedy. Fla. Stat. § 736.0201 says that, except as provided in subsections (5), (6), and (7) and s. 736.0206, trust proceedings begin with a filed complaint and follow the Florida Rules of Civil Procedure. A freeze preserves the status quo. It does not decide whether the trustee breached a duty.

Trustees already must protect the property. Fla. Stat. § 736.0809 requires a trustee to take reasonable steps to take control of and protect trust property. If a trust is trying to sell or move assets, check whether a contest after distribution is also an option.

Temporary Injunctions: Stopping a Trustee From Moving Property

A temporary injunction is a court order that bars specific conduct until the court changes it or the case ends. Common targets include selling real estate, withdrawing large sums and making distributions to some beneficiaries but not others.

Does the person asking have a real claim? Would waiting cause harm that money later cannot fix? A judge wants specifics. A general fear that money might be spent is weaker than a documented plan to list a house or move accounts.

Fla. Stat. § 736.08165 provides that, while a proceeding filed to determine the validity of all or part of a trust, or the beneficiaries of all or part of a trust, is pending, the trustee proceeds with administration as if no proceeding had been commenced, except that no action may be taken and no distribution made to a beneficiary in contravention of the rights of persons who may be affected by the outcome, unless, on a party’s motion and after notice to interested persons, the court finds good cause and authorizes the trustee to act or distribute, subject to any conditions the court sets, such as the beneficiary posting a bond. The trustee cannot act or distribute in a way that goes against the rights of people who may be affected by the outcome.

The same statute lets a court make an exception on good cause shown, after notice. The court can allow the trustee to act or distribute, with conditions. Those conditions can include bond.

Courts often tailor orders. Examples include limiting withdrawals to ordinary expenses or requiring notice before any sale or refinancing. Expenses still must be reasonable. Fla. Stat. § 736.0805 limits a trustee to expenses that fit the trust property, the trust’s purposes and the trustee’s skills.

A common mistake is waiting until a sale is already scheduled. Documenting the threat early helps the judge see why an order is needed.

Lis Pendens: Putting Buyers on Notice of a Real Estate Claim

A lis pendens is a recorded notice that a lawsuit affects title to a specific piece of real estate. It tells buyers, lenders and title companies that the property is involved in a dispute.

The effect is practical. For a trust trying to sell a house, that can stop the sale.

The other side can challenge the notice. That argument turns on the claim and the record.

Other Protective Steps That Often Go With a Freeze

Freeze requests often come with requests for information. You can ask for these in a written demand before filing, or ask the court for them after the case starts.

• A copy of the trust. On reasonable request, a trustee must give a qualified beneficiary a complete copy of the trust instrument. A trustee must keep the qualified beneficiaries of the trust reasonably informed of the trust and its administration.
• Information about assets. Upon a qualified beneficiary’s reasonable request, the trustee must also provide relevant information about the trust’s assets and liabilities and the particulars of its administration.
• Formal accountings.
• Removal or suspension. The court may remove a trustee who has committed a serious breach of trust. Fla. Stat. § 736.0706 allows the court, while that request is pending, to order appropriate relief to protect the trust property or the interests of the beneficiaries. Fla. Stat. § 736.1001 lists the court’s remedies, including ordering an accounting, appointing a special fiduciary and suspending a trustee.

A demand letter can set the record. Sometimes it leads to an agreement that avoids a contested hearing. It does not replace court relief when a sale is imminent.

How the Process Works: Steps and Typical Sequence

Most freeze efforts follow the same order: review, document, file, ask for a hearing, then serve the order.

1. Review the documents. Read the trust, any amendments, account statements and recent transfers. Identify which assets are at risk.
2. Check the notices. Under Fla. Stat. § 736.0813, a trustee must give qualified beneficiaries notice within 60 days after acquiring knowledge of the creation of an irrevocable trust, or that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise. This duty does not apply to an irrevocable trust created before the effective date of the code, or to a revocable trust that becomes irrevocable before that date. Note whether that notice arrived.
3. Send a written demand. Ask for an accounting or protection of specific assets. Write down the threat in plain facts: what, when and by whom.
4. File the case. The trust proceeding starts with a complaint. Ask for a temporary injunction or a lis pendens where the facts support it.
5. Attend the hearing. Present evidence of the threatened harm. In a proceeding over the validity of a trust or its beneficiaries, on a party’s motion, after notice to interested persons and on good cause shown, the court may authorize the trustee to act or distribute trust assets to a beneficiary, subject to any conditions the court imposes, including bond posted by the beneficiary.
6. Serve and monitor. Serve the order on the trustee and on third parties such as banks and title companies. Watch for compliance.

Timing depends on the court’s calendar and the facts of the case.

How a Freeze Affects Routine Trust Administration

A freeze usually does not stop every routine task. The trustee keeps running the trust but cannot act against the rights of people affected by the outcome. Pending a proceeding to determine the validity of all or part of a trust, the trustee continues administering the trust as if no proceeding had been commenced, except that no action may be taken and no distribution made in contravention of the rights of persons who may be affected by the outcome.

A court order can allow payment of taxes, insurance, utilities and necessary upkeep. Trustees still must keep clear records and keep trust property separate from their own. A trustee must keep clear, distinct, and accurate records of the administration of the trust, and must keep trust property separate from the trustee’s own property.

A trustee must also administer the trust solely in the interests of the beneficiaries. As between a trustee and the beneficiaries, a trustee must administer the trust solely in the interests of the beneficiaries. Trustees must also take reasonable steps to enforce and defend claims. Under Florida law, a trustee must take reasonable steps to enforce claims of the trust and to defend claims against the trust.

Beneficiaries often worry about delayed distributions. A tailored order can keep legitimate expenses moving while holding back disputed transfers.

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

Why Work With Trust Counsel on a Trust Dispute Freeze?

Trust Counsel is a trusts and estates law firm with its only office in Coral Gables, Florida. The firm focuses on probate litigation, trust litigation, trust administration and guardianship. It also advises on estate tax planning, business succession planning and asset protection.

Leslie V. Marenco is the responsible lawyer for this page. The firm’s lawyers include Leslie V. Marenco and Tanya Vega.

The firm handles matters for beneficiaries, heirs and fiduciaries in Florida. It also serves business owners and high-net-worth families with domestic and foreign assets. We serve clients in Doral, Kendall, Pinecrest, Key Biscayne and Aventura.

Frequently Asked Questions About Freezing Trust Assets in Florida

Talk With Trust Counsel About Your Trust Dispute

If a trustee is moving trust property while your family’s dispute is still open, you do not have to sort out the options alone. Many readers are looking into this for a parent’s trust or a relative’s estate that has not yet settled. Trust Counsel can talk through the specific assets and threats in your situation. The free first consultation is confidential and carries no obligation to continue. Book a free strategy call, call (305) 707-7126, or schedule online.