Discharging a Florida Trustee From Lawsuits: what a trust beneficiary needs to know about a release & discharge of a trustee

If you are a beneficiary of a Florida trust and about to receive your inheritance,   you may be wondering what all the paperwork is that the trustee’s law firm is sending to you.  After all, you just want  your check for your inheritance, right?  Well, the Florida Trust Code is loaded with rights that beneficiaries have to a host of issues related to trusts, the trustee and trust administration. http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736ContentsIndex.html&StatuteYear=2015&Title=%2D%3E2015%2D%3EChapter%20736.  Let’s talk about one right of a trustee: to be discharged or released from liability for serving as trustee.  Ask any trust lawyer in Florida and they will tell you that this issue is one that is often mis-understand and not, often, well explained.

What is a Release or a Discharge of a Florida Trustee?

• Before you, a trust beneficiary, receives your trust inheritance, you may be asked to sign a “release” document or a document which “discharges” your Florida trustee
• Before you get a partial distribution from your trust, and certainly before you get your full distribution, or entire trust inheritance, a trust lawyer representing the trustee probably won’t make a distribution unless you “release” the trustee from liability
• Release the Florida trustee for what? For the amount which is distributed to you or for you.
• Release the trustee from all liability forever
• If you, the beneficiary, are satisfied with the information given to you by the trustee, and you find nothing wrong with the trust information, then the trustee can probably make a final distribution to for your entire inheritance.

Why Does a Trust Beneficiary Have to Sign a Release?:  you don’t !

• A trustee in Florida has the right to be discharged from liability—either by a beneficiary or a court–if the trustee has done nothing wrong.
• What does release or discharge mean in a Florida trust lawyer context?
• Well a trustee is entitled to certainty.  The trustee has a right to know that he or she has done nothing wrong in the administration or “running” of the trust.  That there is no forseeable liability out there; no likelihood that the fiduciary, the trustee, will be sued for damages.
• The only exception to this rule is if a trustee has behaved badly or done something wrong: then, the trustee would not be discharged from liability, but rather would be responsible, or liable, for damages after filing and winning a lawsuit against the trustee.
• This means that the trustee has a right to know that when a trust terminates, the trustee is no longer subject to lawsuits or liability from a beneficiary.
• The trustee’s Florida lawyer is going to insist that you agree that you are not going to sue the trustee in exchange for your trust distribution.
• The last thing a trustee wants to do is make a distribution to a trust beneficiary on a Monday and then be sued by the beneficiary on a Tuesday.
• It’s very important that you understand that you will be asked to “discharge” and “release” your trustee from all liability when you are to receive your trust inheritance.
• Generally, once you release your trustee in Florida from liability, you cannot then, at a later time, go back and sue him or seek damages.
• So, you need to be certain that you are comfortable with accepting the trust distribution which is being distributed to you, that it is accurate, and that you don’t want to sue your trustee.
• What if a Florida trust beneficiary does not want to sign a trustee’s release?
• If a trust beneficiary does not want to sign a release, that is OK, but understand that the trust lawyer for the trustee will then file a trust lawsuit in the Florida probate court, asking that the court discharge the trustee from service and declare that the trustee has done nothing wrong.
• Possible downside to the beneficiary: if you don’t have a case, or unreasonably refused to discharge or release the Palm Beach trustee, your trust inheritance will most likely be decreased by the amount of the trustee’s lawyers’ attorneys fees.
• For more information about trust beneficiary rights, look not to the Florida Probate Rules, but rather the Florida Trust Code which can be read online for free: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0736/0736PARTVIIIContentsIndex.html