Are You Ready to Be a Trustee?
I’m attorney Reed Bloodworth, Founder and CEO of Bloodworth Law in Orlando. I handle trust and probate disputes throughout Florida.
I represent trustees, personal representatives, and I also handle disputes for beneficiaries.
I’ll explain what you’ll be asked to do as a trustee so you’ll know what’s expected and can try to avoid common legal problems and lawsuits.
The role of a trustee can be confusing. The goal is to not let dates and details fall through the cracks. You don’t want a beneficiary accusing you of breach of fiduciary duty or accounting action mishaps.
What is a Trust?
First, let’s explain what a trust is. A trust is a legal arrangement created to hold property and assets for another party or parties who are called beneficiaries.
What is a Beneficiary?
Beneficiaries are the individuals or entities specifically named in the trust document to receive the trust’s property and assets.
Your Job as a Trustee
Your job as a trustee is to be a corporate or individual manager of the trust. The trust is created for beneficiaries named by the trust’s creator and often has the benefit of lowering or avoiding taxes upon the trust creator’s death.
The Trustee’s Role
According to the Florida Statutes, a trustee has the duty to administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with the laws of Florida.
Rules and Roles Of A Trustee
Here are the basic rules and roles of a trustee:
- You have to administer the trust solely in the interests of the beneficiaries
- You have to exercise reasonable care, skill, and caution in administering the trust
- You must only incur expenses reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee
- You must take reasonable steps to take control and protect the trust property
- You must keep accurate records which include:
a. Reporting to the beneficiaries as the trust requires or Florida Statutes requires
b. Potentially preparing and filing tax returns
- You can’t mix trust assets with your own assets
- Trust assets must be invested in a way that results in reasonable growth with minimum risk;
- You must keep separate checking accounts and investments; and
- You can’t use trust assets for your own benefit
Hire An Advisor to Help You
If you are an individual trustee, it is highly advisable to hire an attorney, accountant, or financial advisor to help you manage the trust appropriately.
If any disputes or potential disputes arise, you should consult with a trust litigation attorney immediately.
Beneficiaries Can Take Legal Action Against You
Should you fail to perform these duties, beneficiaries can take legal action against you. Sometimes, when several generations, of stepfamilies, siblings, or friends are involved in a trust or a probate estate, you may feel a lot of pressure and it can be made more difficult by jealous or disappointed beneficiaries.
Don’t try to figure these things out or answer these legal questions on your own. Seek the representation of an attorney.
If you are experiencing difficulties in fulfilling your duties as a trustee or personal representative, or are potential disputes related to your role as a trustee or personal representative, talk to Reed about how Bloodworth Law can help you.Consider sharing this post