What Duties Does a Trustee Owe Beneficiaries in Florida?

A Florida trustee owes beneficiaries several core duties. The main ones are loyalty, good faith, impartiality, prudence, control of trust property, record-keeping, and keeping beneficiaries informed. The Florida Trust Code sets these standards, and the trust document works within them.

What duties does a trustee owe to beneficiaries, and how do Florida courts enforce them? The short answer appears in each section below. This page is general information, not advice about your trust. Leslie V. Marenco of Trust Counsel, PL is the lawyer responsible for this page, and the firm’s office is located in Coral Gables, Florida. (En español: Leslie V. Marenco, de Trust Counsel, PL, es responsable de esta página; la oficina de la firma está en Coral Gables, Florida.)

Where a Florida Trustee’s Duties Come From

Under Fla. Stat. § 736.0105, except as otherwise provided in the terms of the trust, the Florida Trust Code governs the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.

Once a trustee accepts the role, the trustee must administer the trust in good faith. The trustee must follow the trust’s terms and purposes and serve the beneficiaries’ interests (duty to administer trust).

The core duties, at a glance:

• Loyalty: act solely in the beneficiaries’ interests (duty of loyalty).
• Impartiality: treat multiple beneficiaries fairly (impartiality).
• Prudence: use reasonable care, skill and caution (prudent administration).
• Protection: take control of and protect trust property (control of trust property).
• Records: keep clear records and keep trust property separate (recordkeeping).

Duty of Loyalty: Acting Only for the Beneficiaries

A trustee must administer the trust solely in the interests of the beneficiaries. The statute says this in plain terms (§ 736.0802).

This duty matters most when the trustee’s own interests are involved. A trustee who buys trust property for personal use, or uses trust money for a personal project, has a conflict. Under the statute, an affected beneficiary can void a transaction affected by that kind of conflict, unless an exception applies, such as a transaction the trust terms authorize or one a court approves. Another exception is a transaction the trust terms authorize.

The statute also presumes a conflict in some deals. Dealings with family members or with businesses the trustee controls can warrant closer review.

The duty doesn’t stop a trustee from getting help. The trustee may hire attorneys, accountants, investment advisers and agents. The trustee may pay reasonable compensation and costs for that work from trust assets. The question is whether the help served the trust or the trustee.

Duty of Impartiality When There Are Several Beneficiaries

When a trust has two or more beneficiaries, the trustee must act impartially. The trustee must give due regard to each beneficiary’s respective interests (§ 736.0803).

Impartiality is about balance. A trust may pay income to one person now and hold the rest for someone else later. The trustee has to weigh both interests, not just the one that is easier to serve.

Disputes can arise in family trusts. A trustee who favors one sibling or one branch of the family, without authority under the trust terms, gives beneficiaries a reason to ask questions. Read the trust terms first to see what the settlor allowed.

Duty to Administer Under the Trust Terms and Prudently

A trustee must act as a prudent person would. The trustee must exercise reasonable care, skill and caution (§ 736.0804).

The test looks at the trust’s purposes, its terms, its distribution rules and the other circumstances. Good intentions alone don’t answer that question. The question is what a careful trustee would do with this trust in this situation.

Under Florida law, a trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances, but must exercise reasonable care, skill, and caution in selecting an agent, establishing the scope and terms of the delegation, and periodically reviewing the agent’s actions (§ 736.0807).

A trustee who follows those steps, and who also meets s. 518.112 when investment functions are delegated, is not liable to the beneficiaries or to the trust for the agent’s actions in the delegated function (§ 736.0807). Questions can arise when assets sit idle or when the trust terms aren’t being carried out.

Duty to Control and Protect Trust Property

A trustee must take reasonable steps to control and protect the trust property (§ 736.0809). Those assets must stay under the trustee’s control and stay safe.

Protecting trust property means a trustee must take reasonable steps to take control of and protect it; the separate requirement to keep it apart from the trustee’s own property is in § 736.0810. A trustee must keep trust property separate from the trustee’s own property (§ 736.0810). Mixing trust money with personal accounts makes it hard to show what belongs to whom.

Where feasible, the trust’s interest should appear in records kept by someone other than the trustee or a beneficiary. Real estate, bank accounts and business interests should show the trust as the owner.

A trustee who treats trust assets as personal property creates a serious problem. It can lead to a claim for breach of trust.

Duty to Inform, Report, and Keep Records

A trustee must keep qualified beneficiaries reasonably informed, though while a trust is revocable this duty runs only to the settlor. The statute also sets deadlines and an accounting schedule (§ 736.0813).

Notice comes first. Within 60 days after accepting the trust, the trustee must notify qualified beneficiaries; while a trust is revocable, the trustee’s duties under this section run only to the settlor. The notice must give the trustee’s full name and address. For an irrevocable trust, notice of the trust’s existence and the settlor’s identity is due within 60 days after the trustee learns the trust was created or that a formerly revocable trust has become irrevocable, whether by the settlor’s death or otherwise. The notice must also explain the beneficiary’s right to a copy of the trust and to accountings.

Information continues after notice. On reasonable request, the trustee must give a qualified beneficiary a complete copy of the trust instrument, though while the trust is revocable the trustee’s duties under this section run only to the settlor. The trustee must also share relevant information about assets, liabilities and administration. An irrevocable trust requires an accounting at least once a year, and again when the trust ends or the trustee changes.

Under § 736.0813, trust accountings rendered for accounting periods beginning on or after July 1, 2007 are covered; the requirement that an accounting be a reasonably understandable report is set by § 736.08135. Under Fla. Stat. § 736.08135, the trust accounting must show all cash and property transactions and all significant transactions affecting administration during the accounting period, including compensation paid to the trustee and the trustee’s agents. It must include compensation paid to the trustee and the trustee’s agents (§ 736.08135). A final accounting must include a plan for any assets not yet distributed.

Where the settlor has died, certain trusts require the trustee to file a notice of trust with the court (§ 736.05055).

What a Beneficiary Can Do If a Duty Appears Unmet

A beneficiary can start by asking the trustee in writing. Request the trust instrument, the accountings and information about administration. Keep copies of each request and the date you sent it.

If the trustee doesn’t resolve the concern, a court can step in. Florida law provides that a trustee’s violation of a duty the trustee owes to a beneficiary is a breach of trust (Fla. Stat. § 736.1001(1)). For a breach that has occurred or may occur, the court’s remedies include compelling the trustee to perform the trustee’s duties, enjoining the trustee from committing a breach of trust, ordering the trustee to account, appointing a special fiduciary to take possession of the trust property and administer the trust, suspending the trustee, removing the trustee as provided in s. 736.0706, and reducing or denying the trustee’s compensation (Fla. Stat. § 736.1001). The court may also void an act of the trustee, subject to § 736.1016, and may also trace trust property that was wrongfully disposed of and recover that property or its proceeds (remedies for breach of trust). Under § 736.1016, a person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee’s powers, is protected from liability as if the trustee properly exercised the power.

When a breach gives one beneficiary too little or too large a distribution, the court can restore the parties to their proper positions (§ 736.1001).

Time limits matter. Under Fla. Stat. § 736.1008(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 the beneficiary receives the trust disclosure document or a limitation notice that applies to that disclosure document from the trustee or a trust director, whichever is received later. The deadline depends on the facts, including what was disclosed and when.

Whether a breach happened turns on the trust terms, the records, and the court’s findings.

Questions Beneficiaries Often Ask and Who Trust Counsel Advises

Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. A personal representative (often called an executor) manages a deceased person’s estate.

Can a trustee invest trust money in their own business?

If a trustee has gone silent, withheld records, or made a payment you don’t understand, a conversation can help you see your options. Trust Counsel, PL offers a free first consultation, which is confidential and carries no obligation to continue. Call (305) 707-7126 or schedule online at https://trustcounsel.com/contact/.