Neutral Trustee During Trust Litigation in Florida

A neutral trustee during trust litigation in Florida is an independent fiduciary who manages trust property while a court decides the dispute. Under Fla. Stat. § 736.0802(9), a court may appoint a special fiduciary to act with respect to a proposed transaction that might violate § 736.0802 if the trustee enters into it. This guide explains when that happens, what the appointed fiduciary does, and how the process runs in Florida.

What a Neutral Trustee Is and Why a Court Might Need One

A neutral trustee is a fiduciary with no stake in who wins. It holds and manages trust property while the court decides the claims.

The problem is simple. The person running the trust is often also a party to the fight. That person may be a beneficiary, a relative, or someone accused of misconduct. Florida law lets the trustee keep administering the trust during a case, within limits. Under § 736.08165, no action may be taken and no distribution made in contravention of the rights of persons who may be affected by the outcome.

A neutral trustee is not the same as a successor trustee. A successor trustee is someone the trust document names to take over. First comes the person the trust names. Next comes a person the qualified beneficiaries unanimously agree on. Last comes a person the court appoints. See § 736.0704.

The parties can ask the court for a neutral fiduciary. The court decides whether the appointment fits the facts.

Situations Where a Neutral Trustee Becomes a Question

A neutral trustee becomes a question when the current trustee has a conflict that is hard to manage from inside the trust.

• The trustee is also a beneficiary who gains from the terms being contested.
• Someone alleges self-dealing, unequal distributions, or unexplained transfers.
• Family members are too close to the dispute to administer the trust evenly.
• The trustee refuses to account, or assets look at risk while the case runs.

These facts tie to the trustee’s core duty. A trustee must act solely in the beneficiaries’ interests, under § 736.0802. Under § 736.0706, a court may remove a trustee for a serious breach of trust, among other grounds. The broader grounds for challenging a trust are a separate question.

Who This Role Is For

This role fits beneficiaries, trustees who want to step aside, and attorneys who need an independent option.

• Beneficiaries who want the trust run without the accused trustee in control.
• Trustees who want to step aside while a claim against them is pending.
• Attorneys for either side who want an independent fiduciary built into the petition.

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

A trustee who steps aside still has duties until the property moves. Under § 736.0707, unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to the property, a trustee who has resigned or been removed keeps the duties of a trustee and the powers necessary to protect trust property.

What an Independent Trustee Typically Covers

An independent trustee’s core job is to protect trust property and keep clear records.

• Take reasonable steps to control and protect trust property, under § 736.0809.
• Keep clear, accurate records, and keep trust property separate from the fiduciary’s own, under § 736.0810.
• Prepare accountings that show all cash and property transactions, including compensation paid to the trustee and agents, under § 736.08135.
• Keep qualified beneficiaries reasonably informed about the trust and its administration, under § 736.0813.
• Administer the trust under its written terms and the Florida Trust Code (Chapter 736).

Limits apply while the case is pending. The trustee cannot act or distribute in a way that goes against the rights of people affected by the outcome. A court may allow an exception for good cause. It can attach conditions, such as a bond from the beneficiary.

How the Process Works, Step by Step

The process moves from a court filing to a hearing, then to an order that sets the fiduciary’s powers.

1. Case review. Confirm the trust terms, the filed claims, and who is acting as trustee now.
2. Filing. Judicial proceedings about trusts generally start with a complaint under the Florida Rules of Civil Procedure, except as provided in subsections (5), (6), and (7) of § 736.0201. See § 736.0206. See § 736.0201. See § 736.0201.
3. Notice and hearing. A request to make an exception to the pending-case limits is decided on motion and after notice to interested persons.
4. Court order. The order can set the fiduciary’s powers, limits, and conditions.
5. Transition. A removed or resigned trustee must deliver trust property within a reasonable time. It may keep a reasonable reserve for debts, expenses, and taxes.
6. Ongoing administration. Administration matters can take time, and the steps involved depend on the facts of each case.

Timing varies with the court’s calendar and how complex the trust is.

Limits, Conflicts, and Questions the Court Will Weigh

A neutral trustee owes its duties to the trust and its beneficiaries, not to the side that hired counsel.

• Its duties run to the beneficiaries. See § 736.0802.
• Pay follows the trust terms. If the terms don’t set compensation, the trustee gets reasonable compensation under the circumstances. See § 736.0708.
• The trustee and anyone the trustee employs carry the burden to show the employment and pay are proper and reasonable. See § 736.0206.
• The fiduciary manages property. The court decides the claims.
• A candidate with close ties to one side may not fit the role.

If the real problem is the trustee’s conduct, removal may be the question. A court may remove a trustee for a serious breach of trust. A separate rule applies to fee disputes: under Fla. Stat. § 736.0206(4), court proceedings to determine reasonable compensation of a trustee or of a person the trustee employs are part of the trust administration process, and the court determines the costs, including attorney’s fees, of the trustee or employee who must prove the employment proper and the compensation reasonable, with those costs paid from trust assets unless the court finds the compensation paid or requested to be substantially unreasonable. That provision addresses compensation proceedings, not removal litigation. While that request is pending, the court may order relief to protect trust property or the beneficiaries’ interests. See § 736.0706.

Why Trust Counsel, PL for Neutral Trustee Matters

Trust Counsel, PL focuses on probate litigation, trust litigation, trust administration and fiduciary matters in Florida.

• Our only office is in Coral Gables, Florida.
• We serve clients in Fort Lauderdale, Boca Raton, West Palm Beach, Doral, Kendall, Pinecrest, Key Biscayne and Aventura.
• The firm advises and represents trustees, personal representatives and beneficiaries.
• Trust Counsel’s attorneys can serve individually as trustee or personal representative.
• Leslie V. Marenco is the responsible lawyer for this page. The firm’s lawyers include Leslie V. Marenco and Tanya Vega.

Our lawyers can review the trust terms and filed pleadings. They can show how these rules apply to a neutral trustee request in your case.

Frequently Asked Questions

Talk Through Your Trust Dispute With Trust Counsel

If a trustee cannot fairly keep control of trust assets while a case is pending, a neutral fiduciary may be worth discussing. Schedule online or call (305) 707-7126 to talk through whether an independent fiduciary fits your trust dispute.