Named in a Beneficiary Lawsuit as a Trustee?

If a beneficiary has sued you as a trustee in Florida, your first job is to find the deadline on the summons and keep every trust record. A trustee’s defense rests on the trust terms, the paperwork and the Florida Trust Code. This guide covers the claims beneficiaries bring, the first steps, the defenses and what the court process usually looks like. It is written for the trustee who was just served and for family members helping that trustee. Leslie V. Marenco is responsible for this page. Trust Counsel, PL has its only office in Coral Gables, Florida.

What is a beneficiary lawsuit against a trustee?

A beneficiary lawsuit against a trustee says the trustee broke a duty owed to the beneficiary. Under Florida law, a violation of a duty a trustee owes to a beneficiary is a breach of trust (Fla. Stat. § 736.1001). The duty can come from the trust terms or from Florida’s trust law.

A beneficiary is a person with a present or future beneficial interest in a trust, vested or contingent, or who holds a power of appointment over trust property in a capacity other than that of trustee (Fla. Stat. § 736.0103). That includes current beneficiaries, remainder beneficiaries and contingent beneficiaries who may take if a condition is met.

A claim based on a contract entered into by a trustee in the trustee’s fiduciary capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administering a trust may be asserted against the trustee in the trustee’s fiduciary capacity, whether or not the trustee is personally liable (Fla. Stat. § 736.1013). Personal liability for torts is narrower. A trustee is personally liable for torts committed while administering a trust only if the trustee is personally at fault.

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

What claims do beneficiaries most often bring?

Most beneficiary suits allege a breach of trust in a few familiar forms.

• Conflicted dealings. A trustee must administer the trust solely in the beneficiaries’ interests. A transaction affected by a conflict between personal and fiduciary interests can be voidable by an affected beneficiary, unless an exception applies (Fla. Stat. § 736.0802).
• Failure to inform or account. A trustee must keep qualified beneficiaries reasonably informed. Irrevocable trust accountings are generally due at least annually (Fla. Stat. § 736.0813).
• Unequal distributions. If a beneficiary received too little, the court may require payment to restore that beneficiary. If a breach of trust favored one beneficiary over another, or was an abuse of the trustee’s discretion, and one beneficiary received too much, the court may restore the beneficiaries, the trust, or both to their appropriate positions by withholding an amount from that beneficiary’s future distributions or by requiring that beneficiary to return some or all of the distribution to the trust (Fla. Stat. § 736.1001).
• Investment and administration complaints. Beneficiaries also challenge how assets were managed and how long administration took.
• Removal requests. A beneficiary may ask the court to remove a trustee.

What should a trustee do first after being served?

Check the summons for the response deadline the day you get it. Then preserve every trust record. Missing a response deadline can lead to a default against you, so this step cannot wait.

Timing rules matter too. If a trustee or trust director sent you a trust disclosure document, a beneficiary generally must sue over an adequately disclosed matter within 6 months after receiving that document or a limitation notice, whichever is later (Fla. Stat. § 736.1008). Fla. Stat. § 736.1008 reads: “(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 that was adequately disclosed in a trust disclosure document unless a proceeding to assert the claim is commenced within 6 months after receipt from the trustee or a trust director of the trust disclosure document or a limitation notice that applies to that disclosure document, whichever is received later.” Other rules apply when no final accounting or required notice was given.

Gather these records now:

• The trust instrument and every amendment.
• Account statements, ledgers, invoices and receipts.
• Trust tax returns and distribution records.
• Letters, emails and texts with the beneficiary and any co-trustees.

Keep everything intact. Don’t delete messages or change records. Hold off on large transactions or new distributions until the claim is reviewed. Read any demand letter carefully before you respond, and don’t discuss the dispute on social media.

Which defenses can a trustee raise?

The main defenses turn on timing, the trust terms, the beneficiary’s own conduct and the trustee’s personal role.

• Beneficiary claims are barred upon the later of ten years after the trust terminates, the trustee resigns, or the fiduciary relationship otherwise ends, or twenty years after the act or omission of the trustee that is complained of, if the beneficiary had actual knowledge of the existence of the trust and the beneficiary’s status as a beneficiary throughout the ten-year or twenty-year period. Under the statute, these outer time bars apply notwithstanding subsections (1), (2) and (3) (Fla. Stat. § 736.1008).
• A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach, unless the consent, release or ratification was induced by improper conduct of the trustee, or the beneficiary did not know of their rights or of the material facts relating to the breach at the time (Fla. Stat. § 736.1012).
• Exculpation clauses. A trust term that relieves a trustee of liability is unenforceable to the extent it covers a breach committed in bad faith or with reckless indifference, or was inserted through the trustee’s abuse of a fiduciary or confidential relationship with the settlor (Fla. Stat. § 736.1011).
• Measure of damages. A trustee in breach owes the greater of the restoration amount or the profit made from the breach (Fla. Stat. § 736.1002). Knowing this number early shapes the response.
• Under Fla. Stat. § 736.0802(10)(e), a qualified beneficiary who is not barred under s. 736.1008, and whose share of the trust may be affected by the use of trust assets to pay attorney fees or costs incurred in connection with a claim or defense of breach of trust made in a filed pleading, may ask the court to prohibit the trustee from using trust assets for that payment. At a hearing on a qualified beneficiary’s motion under this paragraph, the court must deny the motion unless it finds a reasonable basis to conclude that there has been a breach of trust, and even if it finds such a basis, the court may still deny the motion if it finds good cause to do so.

How do co-trustee disputes and removal petitions work?

When co-trustees disagree, each trustee’s duties still apply. Cotrustees who cannot agree may act by majority decision (Fla. Stat. § 736.0703). A cotrustee who does not join another’s action is generally not liable for it. A dissenting cotrustee who joins an action at the direction of the majority of the cotrustees and notifies any cotrustee of the dissent at or before the time of the action is not liable for it.

Except as otherwise provided in s. 736.1412, each cotrustee must exercise reasonable care to prevent a co-trustee’s breach and to compel that co-trustee to redress it (Fla. Stat. § 736.0703). Shared liability is split by relative fault (Fla. Stat. § 736.1002).

Pending a decision, the court may order relief to protect trust property (Fla. Stat. § 736.0706). Plan the damages response and the removal response together, because the same records answer both.

What does the court and settlement process look like?

Most trust disputes move through pleadings, a records exchange and often mediation before a trial decision. The usual stages are:

1. A response or motion to dismiss.
2. Exchange of trust records and accountings.
3. Depositions of witnesses, which can include the trustee.
4. Mediation.
5. Trial or a negotiated settlement.

Mediation is one route to resolution.

The timing of a trust matter depends on the facts of each case. The trust instrument, the records and the remedies requested all shape the path, and no outcome can be promised at any stage.

How Trust Counsel, PL advises trustees

Trust Counsel, PL focuses on trust litigation, probate litigation, trust administration and estate planning. The firm advises and represents trustees, personal representatives and beneficiaries.

• Office. The firm’s 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.
• Lawyers. Leslie V. Marenco is responsible for this page. The firm’s lawyers include Leslie V. Marenco and Tanya Vega, and the firm has support staff.
• Individual service. Trust Counsel’s attorneys can serve individually as trustee or personal representative.
• First consultation. The first consultation is free, confidential and without obligation to continue.

Frequently asked questions