5 THINGS A FLORIDA TRUST BENEFICIARY IS OWED BY YOUR FLORIDA TRUSTEE
A Florida trustee must owe you, a Florida trust beneficiary, 5 important duties. They include:
- A duty of loyalty
- A duty to administer the trust in good faith and in line with what is written or contained in the Florida trust document
- A duty to invest Florida trust assets prudently
- A duty to identify him/herself as trustee, along with providing contact information for the trust beneficiaries
- A duty to disclose where the trust assets are, how much they are worth, and any sales, purchases, changes, costs, expenses, interest, income or distributions
Being a Florida trustee is serious business. A Florida trustee has many duties which are owed to Florida trust beneficiaries. The above list is a short list of, perhaps, the most important duties which a Florida trustee owes to its trust beneficiaries.
A Florida trustee must administer the trust for the benefit of the beneficiaries. A Florida trustee must be loyal to his or her trust beneficiaries. The Florida trustee must place his or her beneficiaries’ interests above everyone else’s, including the Florida trustee’s own personal interests. A Florida trustee must avoid conflicts of interest, and conflicted transactions, and acts of self-dealing. Acts of self-dealing, and engaging in conflicts of interest by a Florida trustee, are void or voidable under Florida trust law. A Florida trustee needs to look out for, and protect, his or her trust beneficiaries. At no time may a Florida trustee place his or her own personal or business interests above the trust’s, or those of the trust beneficiaries.
A Florida trustee must invest all trust money, and all Florida trust assets, prudently. Chapter 736 of the Florida trust code, and chapter 518 of the Florida statutes, set forth what it means to be a prudent trustee in Florida, and what it means to invest Florida trust assets “prudently.” Florida trustees should avoid investing too much trust money into a single asset, so-called “concentrations.” Florida trustees should diversify, and avoid investing more than a minimal amount of trust assets in unmarketable or illiquid investments. At all times, a Florida trustee must have an investment strategy or an investment plan, which considers both the production of income, and the interest of the Florida trust income beneficiaries, as well as capital appreciation, and the interests of the Florida trust remainder beneficiaries. A Florida trustee should not speculate– not even with a dime of the trust money.
Whenever a Florida trustee begins his or her tenure as trustee, he or she is required to identify himself or herself to the Florida trust beneficiaries. The new, or incoming, Florida trustee should send a letter to all trust beneficiaries identifying him or herself along with contact information. If the Florida trustee is represented by a Florida trust lawyer, the Florida trustee should also inform the trust beneficiaries that all communications between the Florida trustee and his or her trust lawyer are privileged, and covered by the attorney-client privilege, and rules of confidentiality.
Each Florida trustee should reveal, and disclose, to all Florida trust beneficiaries each and every single asset which the trust owns or has an interest in, as well as all buys and sells, all income, rental payments, dividends, and distributions into and out of the Florida trust. A Florida trustee should disclose what he or she is taking in the way of trustee income or trustee compensation, as well as what the Florida trustee is paying the Florida trustee’s lawyers. No hiding the ball. No confusing communications or statements. No excuses. No half-truths and no telling trust beneficiaries only part of the story. One golden rule for Florida trustees is: disclose, disclose, disclose. And remember, disclosure requires complete disclosure. No half-truths, no little white lies, no puffery, and no stalling or avoiding disclosure. Answer the questions asked in a timely manner. A Florida trustee is required to, simply, provide straightforward information, and data, about the trust, and the trust administration during the trustee’s service as trustee.