When a Trustee Steps Down, Who Takes Over?

What does appointment of successor trustee mean? It means the trust document names a backup person or institution to take over as trustee when the current trustee can no longer serve. Florida law sets out when that change happens and who fills the role. This guide explains the role in plain language, from the first notice to the first steps.

What does appointment of successor trustee mean?

An appointment of successor trustee is the step that puts the next trustee in charge. In most trusts, the settlor (the person who created the trust) writes that name into the trust instrument. The trust document is the first place to look.

Florida law also sets an order for filling a vacancy. In a noncharitable trust, a vacancy that is required to be filled is filled first by the person named or designated in the trust to act as successor trustee. Next comes a person chosen by unanimous agreement of the qualified beneficiaries. A court comes last. See Fla. Stat. § 736.0704.

A vacancy happens when a person designated as trustee declines, cannot be identified or does not exist, or when a trustee resigns, is disqualified or removed, dies, or is adjudicated to be incapacitated. The same statute lists these events.

With a revocable living trust, the settlor often serves as the first trustee. The successor’s role starts when that service ends. ACTEC guidance on revocable trusts notes that a successor may manage trust assets when the settlor becomes incapacitated. For the broader picture, read our Florida trust litigation guide.

Successor trustee, trustee and beneficiary: how the roles differ

No, a successor trustee and a beneficiary are separate roles. A successor trustee is simply the next trustee in line. It is not a different kind of trustee.

The trustee manages trust property and carries out the trust terms. A beneficiary is someone who receives benefits from the trust. A successor trustee is not automatically a beneficiary. A beneficiary is not automatically a trustee.

One person can hold both roles. The duties still differ. A trustee owes duties to the qualified beneficiaries, including keeping them informed. The trust document controls who holds each role.

Accepting the role has rules, too. A designated trustee can accept by substantially complying with the method the trust describes. If the trust gives no method, or gives one that is not expressly made exclusive, accepting trust property, using trustee powers or performing trustee duties can count as acceptance. See Fla. Stat. § 736.0701. A person designated as trustee who does not accept the trusteeship within a reasonable time after learning of the designation is treated as having declined.

When the successor trustee steps into the role

The successor steps in when the trust needs a trustee and the current one is gone. Death, incapacity, resignation and removal are common triggers. The trust’s own wording controls how and when the change takes effect.

A trustee may resign under the trust’s procedure. A trustee may also resign on at least 30 days’ notice to the qualified beneficiaries, the settlor if living, and any cotrustees. Court approval is another route. See Fla. Stat. § 736.0705.

If the trust has no trustee left, the vacancy must be filled. Under Fla. Stat. § 736.0704, a vacancy in a trusteeship occurs if a person designated as trustee declines the trusteeship, cannot be identified or does not exist, a trustee resigns, is disqualified or removed, dies, or is adjudicated to be incapacitated.

Banks and other institutions often ask for proof of the change. A death certificate or a written statement of incapacity is common proof. Keep copies of each document.

What a successor trustee does first

The first step is to find and read the complete trust document, including every amendment. Then confirm what the trust holds and what it owes.

Next, inventory the assets. Gather account statements, deeds and records of how the prior trustee managed the property. Note any debts. You need a clear picture before you move any money.

Notice comes next. Within 60 days after accepting the trust, the trustee must notify the qualified beneficiaries. The notice must give the trustee’s full name and address. It must also say that the fiduciary lawyer-client privilege applies. See Fla. Stat. § 736.0813.

Within 60 days after a trustee acquires knowledge of the creation of an irrevocable trust, or that a formerly revocable trust has become irrevocable, the trustee must give a similar notice to the qualified beneficiaries. This does not apply to an irrevocable trust created before the code’s effective date. That notice covers the trust’s existence, the settlor’s identity, the right to request a copy of the trust instrument, the right to accountings, and that the fiduciary lawyer-client privilege in s. 90.5021 applies with respect to the trustee and any attorney employed by the trustee (see Fla. Stat. § 736.0813(1)(b)).

Practical do’s and don’ts:

• Keep trust funds separate from your own money.
• Keep clear, accurate records of every transaction.
• Do not distribute property until you confirm the trust terms.
• Get advice early on terms the document leaves unclear.

For a step-by-step view, read first steps for a successor trustee.

Bank accounts and access to trust property

Access to a bank account depends on how the account is titled and what the bank requires. The trust document alone may not satisfy a bank. Florida law offers a shorter tool.

A trustee may give a certification of trust to a person other than a beneficiary, such as a bank, instead of the full trust instrument; a qualified beneficiary may still request a complete copy of the trust instrument. It must state that the trust exists and the date it was signed. It must say whether the trust is revocable. See Fla. Stat. § 736.1017.

A certification must also say the trust has not been changed in a way that makes its statements wrong. A person who relies on it, without knowing it is wrong, is not liable for doing so.

Titling matters. See Fla. Stat. § 736.0810. For more on this issue, see bank access for successor trustees.

Compensation, and when an appointment is challenged

A trustee is entitled to reasonable compensation if the trust does not set a pay amount. If the trust does set compensation, the trustee gets what it specifies. The court may allow more or less in listed situations. See Fla. Stat. § 736.0708.

Disputes do happen. A serious breach of trust is one ground for removal. See Fla. Stat. § 736.0706.

Fla. Stat. § 736.0207 places on the contestant the burden of establishing the grounds for invalidity in an action to contest the validity or revocation of all or part of a trust. It also provides that an action to contest the validity of all or part of a revocable trust, or the revocation of part of a revocable trust, may not be commenced until the trust becomes irrevocable by its terms or by the settlor’s death. If all of a revocable trust has been revoked, an action to contest the revocation may not be commenced until after the settlor’s death, and the section does not prohibit such action by the guardian of the property of an incapacitated settlor.

The successor’s protection applies if the eligible beneficiary does not deliver a written request within 6 months after the successor accepts, and the successor’s written notice must advise that the right will be barred. Under Fla. Stat. § 736.08125, a successor trustee is not personally liable for actions taken by a prior trustee in the circumstances the statute lists. See Fla. Stat. § 736.08125. Except as provided in Fla. Stat. § 736.10085, this protection does not remove the prior trustee’s own liability.

A separate situation involves interference with an expected inheritance. Our tortious interference inheritance page covers it.

If you have been named successor trustee and are unsure what comes next

If you were named successor trustee and never chose this role, start with the trust document. You don’t need to know every rule before you act.

You may be reading this after a parent or relative has died or can no longer manage the trust. The role can arrive during a hard time. Find the trust, note the dates, and keep every paper.

Watch two timing points. Notices to qualified beneficiaries are due within 60 days after the trustee accepts the trust or, for an irrevocable trust, within 60 days after the trustee learns it was created or became irrevocable.

Leslie V. Marenco is the responsible lawyer for this page. Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. Our office is in Coral Gables, Florida.

If you have been named and want to talk it through, call (305) 707-7126 or schedule online. The first consultation is free, confidential and comes with no obligation to continue.

Frequently Asked Questions