5 important responsibilities of a Trustee in Florida.

We frequently receive questions from newly appointed trustees of Florida trustsasking what their new duties and responsibilities are in administering the trust.

Here are 5 important duties that newly named Florida trustees should know:

1. Duty to Inform. Section 736.0814 of the Florida Trust Code provides that the new trustee must notify, in writing, all of the beneficiaries of the trust that he is the trustee and that they may request a copy of the complete trust agreement.
2. Duty of Impartiality. Under Section 736.803 of the Florida Trust Code, the trustee must “act impartially in administering the trust property giving due regard to the beneficiaries’ respective interests.” This duty of impartiality is extended to thebeneficiaries as well. Often, the best way to fulfill this duty when there is more than one beneficiary is to divide the trust assets into separate trust shares for each beneficiary. This way each beneficiary can start their trusts with the identical amount of assets which can then be used on an individual basis.
3. Duty to Account. Under Section 736.0815 of the Florida Trust Code, unless waived by the beneficiaries, the trustee is required to send a detailed annual accounting to each beneficiary. If the trustee created separate trust shares for the beneficiary as suggested above, then he needs to prepare separate accountings for each trust.
4. Tax Compliance. In addition to the accounting to be served on the beneficiaries, the trustee must also complete and file a fiduciary income tax return (IRS Form 1041) every year.  However, in order to do this, he must first apply for a federal identification number for the trust with the IRS.
5. Duty of Good Faith. The trustee must act in good faith “in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with this code.” Florida Trust Code Section 736.801. If this last one seems vague, it is meant to be.  This duty serves as a catchall for any unscrupulous activity on the part of the trustee.

Any Palm Beach trust litigation attorney will tell you, being a trustee is an important, yet time-consuming job.  Fortunately though, the trustee is also entitled to compensation that is reasonable based on the circumstances of the trust.

See http://www.pankauskilawfirm.com/ for videos and information on Wills in Florida, Florida Trust Law, Estate Planning, and Estate Administration in Florida.