What You Need to Know If You’ve Been Asked to Serve as a Successor Trustee in Florida
It may be an honor to serve as a loved one’s successor trustee, but it’s also an enormous responsibility. You have a legal duty to oversee and distribute trust assets to the intended beneficiaries—and if you make a mistake during trust administration, you could be held personally liable for any damages. For this reason, it’s vital to understand what’s expected of you before you attempt to administer a Florida trust.
Legal Duties and Responsibilities of a Successor Trustee in Florida
State law gives successor trustees a wide range of responsibilities during trust administration in Florida. From the moment a trustmaker passes away, the person assuming the role of a successor trustee is conferred several duties and powers, including:
- Loyalty. Upon acceptance of the role, a trustee must administer the trust in good faith and act in the best interests of the beneficiaries and accordance with the Florida Trust Code.
- Impartiality. A trustee must act impartially when administering trust property with no preference given to one beneficiary over another.
- Prudence. A trustee must exercise reasonable care, skill, and caution when administering the trust, including incurring only reasonable and necessary expenses.
- Protection. A trustee must take reasonable steps to assume control of and protect the trust property. A trustee who has been appointed due to their special skills or expertise must apply that expertise when administering the trust.
- Delegation. A trustee has the power to delegate certain duties (such as investment functions) as long as they take reasonable care and caution in selecting an agent. However, the trustee is expected to monitor the agent’s actions and periodically review the agent’s performance.
- Recordkeeping. A trustee must keep clear, distinct, and accurate records of trust property and keep trust assets separate from the trustee’s own property.
- Defense. A trustee is expected to enforce claims on the trust’s behalf and defend claims against the trust, including forcing outside parties to return trust assets to the trustee.
- Trust accounting. The trustee is expected to keep all qualified beneficiaries reasonably informed about the trust’s status and financial transactions. This includes creating a record of trust accounting to disclose vital information to beneficiaries, such as cash and property transactions, compensation paid to the trustee or the trustee’s agents, and gains and losses during the accounting period. These reports must be performed at least once a year and include receipts and records of disbursements for each transaction.
Failing to provide the annual accounting is one of the easiest ways for a trustee to make mistakes in administration. If the relationship between the beneficiaries and the trustee sours, inaccuracies in the accounting of trust assets will often lead to a lawsuit.
Tips for Successor Trustees Starting the Florida Trust Administration Process
Trust administration requires you to meet several deadlines and notification requirements to close the estate successfully. For example, you are expected to deposit the original Last Will and Testament with the probate court in the decedent’s county of residence within ten (10) days of the trustmaker’s death. [Note, you might not have to sweat this one too much as it can sometimes take longer to receive the original in the first place. Just be diligent.]
Each step typically has a wait time for the appropriate agency to respond, which can cause delays in distributing assets or investing trust funds. For this reason, it’s best to do the following as soon as possible:
- Order death certificates. You will need several certified copies of death certificates to access bank accounts, life insurance proceeds, and safe deposit boxes.
- Notify beneficiaries. Trustees are required to issue a notice to qualified beneficiaries within 60 days after acceptance of the trust. Once notified, you are responsible for sending copies of the trust document to any qualified beneficiaries who request them.
- File a Notice of Trust. Florida law requires you to formally notify the public that the trustmaker has died. It also announces the existence of the trust and alerts creditors who may have a right to collect the decedent’s debts.
- Get a Tax ID Number (TIN). A trustmaker’s Social Security number cannot be used on trust documents after death. You will need to apply for a TIN to manage the trust, access funds, open financial accounts, and file the trust’s tax forms with the IRS.
We Help Successor Trustees in Florida Fulfill Their Duties to the Letter
At Yolofsky Law, we do much more than create your legal documents. We help you carry out your loved one’s wishes, provide for their family members, and keep their love and protection alive long after their death.
Our trusted advisors can take the burden of administration off your shoulders by identifying trust assets and ensuring that all steps are taken in compliance with state law. Schedule an introductory call or call us at (954)237-4011 today to start planning for the future.