By Phil Rarick, Weston Trust Attorney, and Jasmine Benitez, Legal Assistant

In Florida, qualified beneficiaries of a trust have a legal right to receive an accounting from the trustee. This accounting is a detailed report of the trust’s financial activities, including income, expenses, distributions, and the status of trust assets. It ensures transparency and helps beneficiaries verify that the trustee is managing the trust according to Florida law.

Note: Unless you waive your right to an accounting, the Trustee has a duty to provide an accounting to all qualified beneficiaries. This accounting must comply with F.S. 736.0813. Among other things, the trustee must disclose his or her fees and costs charged to the trust.

What is Trust Accounting?

A trust accounting typically includes:

• Income: Dividends, interest, or rent generated by the trust.
• Expenditures: Distributions to beneficiaries, trustee fees, CPA fees, and administrative costs.
• Investments: Records of any asset purchases or sales.
• Balances: Beginning and ending balances for the accounting period.

This report gives beneficiaries critical insight into how the trustee is managing the trust.

Florida Law on Beneficiary Rights

Under Florida Statutes Section 736.1008, qualified beneficiaries have the right to request an accounting at any time. Trustees must provide this accounting within a reasonable period upon request.

What Happens if a Trustee Fails to Provide an Accounting?

If a trustee does not provide an accounting, beneficiaries can:

• Request one in writing.
• Petition the court to compel the trustee to provide the accounting.
• Seek the removal of the trustee.

Why is Trust Accounting Important?

An accounting ensures that:

• The trust is being managed properly and in line with the grantor’s intent.
• Beneficiaries can verify that distributions and expenses are legitimate.
• Potential issues, such as mismanagement, can be addressed early.
• The trustee’s fees and costs are reasonable.

Conclusion

A qualified beneficiary’s right to trust accounting is a key protection under Florida law, ensuring transparency and accountability. If you are a qualified beneficiary and believe the trustee is not fulfilling their duties, consult an estate planning attorney to understand your options. If you are a trustee, do not try to administer the trust without an experienced Miami trust attorney. For more information about Trust Administration, see our guide: Practical Tips For The Florida Trustee.

For more information, contact Phil Rarick, Weston Trust Attorney, at info@raricklaw.com.

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Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on the information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an attorney who is experienced in Florida trust law. Your receipt of information from this website, blog, or Miami trust attorney does not create an attorney-client relationship and the legal privileges inherent therein.

By Phil Rarick, Weston Trust Attorney, and Jasmine Benitez, Legal Assistant

The answer is yes – under certain circumstances, a trustee can be removed from their duties. A trustee has a high fiduciary responsibility to act in the best interest of the qualified beneficiaries, but if they fail to do so, there are legal grounds for removal.

This blog will walk you through the typical legal grounds for removing a trustee, the process involved, and what steps you can take if you believe a trustee is not fulfilling their responsibilities.

Legal Grounds for Removing a Trustee in Florida

A trustee in Florida can be removed for a variety of reasons, typically tied to their failure to act in accordance with the trust’s terms or their fiduciary duties. Common grounds for trustee removal include:

– Breach of Fiduciary Duty

A trustee has a legal obligation to act in the best interests of the beneficiaries, and any violation of this duty is grounds for removal.

• Self-dealing: The trustee uses trust assets for their own benefit.
• Mismanagement of assets: Failing to invest or manage trust property properly, or making risky, imprudent investments. A trustee must follow the prudent investor rule, which can best be summarized as follows: the trustee should ensure that trust investments stay ahead of inflation but are not in high-risk investments such as cryptocurrencies. Unless otherwise stated in the trust, the investments should be broadly diversified. And importantly, the Trustee assets must produce income for the beneficiaries. See 5 Warning Signs That A Trust Is Not Performing.
• Failure to make required distributions: Not following the trust’s instructions on when and how to distribute assets to beneficiaries.

– Lack of Transparency and Failure to Disclose Information

Trustees are required to provide regular, accurate, and complete information about the trust to the beneficiaries. If a trustee fails to disclose relevant information or is not transparent about the trust’s activities, this could lead to their removal.

• Not providing annual financial statements
• Withholding or failing to disclose the trust document
• Not informing beneficiaries about important trust decisions.

See 5 Key Rights of a Florida Trust Beneficiary.

– Conflict of Interest

A trustee must act impartially and without personal bias. If a trustee has a conflict of interest, such as standing to benefit personally from a decision, they can be removed. This could include situations where the trustee is in a personal dispute with a beneficiary or has a financial interest that conflicts with their duties.

The Process for Removing a Trustee in Florida

If you believe a trustee should be removed, the process typically involves legal action, either through the terms of the trust or by petitioning the court. Here’s a breakdown of the steps involved:

1. Review the Trust Document

Start by reviewing the trust document. Some trusts include provisions that allow for the removal and replacement of a trustee, either by the beneficiaries, a co-trustee, or a third party (such as a trust protector or advisor). If the trust includes such provisions, the process for removal may be relatively straightforward.

2. Petitioning the Court for Removal

If the trust document doesn’t specify how a trustee can be removed or if there’s no agreement among the beneficiaries, the next step is to petition the court. The petition is typically filed in the probate court or circuit court that has jurisdiction over the trust.

3. Court Decision

If the court finds that the trustee has violated their fiduciary duties, breached the terms of the trust, or otherwise failed to fulfill their responsibilities, it can order their removal. The court may also appoint a successor trustee, either from a list of qualified individuals provided by the trust or based on its own determination of who would be the best fit to administer the trust.

4. Appointment of a Successor Trustee

If the trustee is removed, a new trustee will need to be appointed. If the trust document specifies a successor, they can take over immediately. If not, the court will appoint someone to act as the new trustee.

Key Takeaways:

1. Yes, a trustee can be removed in Florida for reasons such as breach of fiduciary duty, lack of transparency, failure to disclose trust information, and conflicts of interest.
2. The process of removing a trustee generally involves petitioning the court, unless the trust document provides a mechanism for removal.
3. If you are a beneficiary, communicate your concerns, gather evidence, and consult with an experienced Miami trust planning attorney to determine the best course of action.
4. After removal, a successor trustee must be appointed to ensure that the trust is administered properly and that the beneficiaries’ interests are protected.

Trustees play a critical role in managing trusts, and when they fail to fulfill their duties, it’s essential to take prompt action to protect the trust and its beneficiaries. If you’re facing issues with a trustee in Florida, working with an experienced Miami trust attorney can help ensure that the trust is properly managed and that your interests are defended.

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Consult with a Miami Trust Attorney

Consulting with an experienced estate planning attorney is crucial. An attorney can help you assess whether the trustee’s actions—or lack of action—justify removal, and they can guide you through the process of filing a petition with the court. They can also help you understand your rights as a beneficiary and what you can do to protect your interests.

For more information, contact Phil Rarick, Weston Trust Attorney, at info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on the information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an attorney who is experienced in Florida trust law. Your receipt of information from this website, blog, or Miami trust attorney does not create an attorney-client relationship and the legal privileges inherent therein.

The trustee of an irrevocable trust in Florida is a fiduciary with numerous responsibilities that run like a laser beam to the qualified beneficiaries. See our 12 Point Summary of Florida Trustee Duties. “Qualified beneficiaries” are generally all beneficiaries who are current beneficiaries, intermediate beneficiaries, and first-line remainder beneficiaries, whether vested or contingent. See F.S. 736.0103(16)

The Trustee has a core duty to keep the “qualified beneficiaries” of an irrevocable trust reasonably informed of the trust and its administration. If you are a qualified beneficiary” of an irrevocable Florida trust you have the following “information” rights under F.S. 736.0813:

1. Within 60 days after acceptance of the trust, the trustee must notify the qualified beneficiaries of the acceptance of the trust and the full name and address of the trustee.
2. Within 60 days after the date the trustee acquires knowledge of the creation of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, the trustee must give notice to the qualified beneficiaries of the trust’s existence, the identity of the settlor or settlors, the right to request a copy of the trust instrument, and the right to receive trust accounting’s.
3. Upon reasonable request, the trustee must provide a qualified beneficiary with a complete copy of the trust instrument.
4. A trustee of an irrevocable trust must provide a very detailed trust accounting to each qualified beneficiary annually and on termination of the trust or on change of the trustee. This accounting must comply with F.S.736.08135, and among many other things, must include compensation paid to the trustee and the trustee’s agents – such as his or her attorney.
5. The trustee must provide a qualified beneficiary with relevant information about the assets and liabilities of the trust and the particulars relating to administration.

In addition to the duty to the above information rights, the qualified beneficiaries can demand that the Trustee comply with the following:

6. The trustee has a duty to be impartial if there are two or more beneficiaries, giving due regard to the beneficiaries’ respective interests. F.S. §736.0803
7. The trustee must invest trust money and trust assets prudently, according to the Florida prudent investor rule. F.S. §736.0804.
8. The trustee can only incur expenses that are reasonable in relation to the trust property, purposes of the trust, and skills of the trustee. F.S. §736.0804.
9. The trustee has a duty of loyalty that runs solely to the beneficiaries; the trust must be administered strictly in the best interests of the beneficiaries – not the best interests of the trustee or any individual or entity that is not a beneficiary. F.S. §736.0802
10. Finally, the beneficiary has a right to demand that the trustee administer the trust in good faith, in accordance with the trust terms and purposes and the interests of the beneficiaries in accordance with Florida law. F.S. §736.0801.

This Report is only a summary of key rights qualified beneficiaries have under Florida law. It is not a complete list of rights. For more information, contact Phil Rarick, Miami trust attorney, at (305) 709-2858 or info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.