Trust Administration Overview
In Florida, if the decedent had a properly drafted and funded Revocable Living Trust, there may not be a need for probate upon death. Generally, an individual named in the Revocable Trust Agreement as the Trustee is responsible for handling the trust administration. When assets are properly titled in the name of a trust or otherwise designated to transfer into the name of the trust upon death, the successor trustee nominated in the trust agreement will have almost immediate legal authority to access, administer and manage the trust assets in accordance with the terms of the trust agreement and Florida law, entirely without the necessity of a court order.
In many instances, the trustee hires a Florida attorney to guide them through the trust administration process. Most trust agreements provide the cost of the attorney will be paid for with trust assets, so it is not a personal expense of the trustee. Having an attorney representing you in your capacity as trustee is a major benefit, as the attorney will assist with the trust administration process, protect your interests as trustee, prepare and file the necessary documentation with the Court, provide statutorily required notice to beneficiaries and creditors, attend any hearings as required and further guide you through the legal nuances and intricacies of the trust administration process.
Here at e-Estates and Trusts, our goal is to guide busy individuals through the trust administration process in a streamlined and efficient manner. If you have been named as trustee, the responsibility can be overwhelming, especially if the case is complex, there are numerous assets or there is disagreement amongst the beneficiaries. Because we have been in the business for a combined 25 years, we fully understand and appreciate the numerous issues faced by trustees, including the grieving process, assuming fiduciary responsibilities and liability, navigating and preserving familial relationships, and the like, and we take pride in providing our clients with clear direction and making the estate administration process as smooth as possible.
Complete our COMPLIMENTARY ESTATE EVALUATION to see if you qualify for a or Book Complimentary Estate Administration Consultation Now with one of our experienced probate and trust administration attorneys.
When May Trust Administration Be Necessary?
– If a loved one passes away owning assets titled in the name of his or her trust.
– If a loved one is the second spouse to pass away owning assets in a joint trust.
– If a loved one is the first spouse to pass away owning assets in a joint trust that becomes irrevocable at the death of the first spouse.
A Trust Administration involves the management, liquidation and ultimate distribution of assets titled in the name of a trust to beneficiaries. It should be noted that serving as trustee is not a simple task. The trustee is responsible for administering the trust pursuant to the terms of the written trust agreement. Further, the trustee is responsible for complying with Florida’s Trust Code when carrying out his or her duties.
What are Trust assets?
Assets titled in the name of the trust are considered to be “trust assets,” meaning they are subject to the control of the trustee and also subject to administration pursuant to the terms of the trust agreement. The primary benefit of a trust is that the successor trustee named in the trust agreement will have almost immediate legal authority to access, administer and manage the trust assets without the necessity of a court order.
Keep in mind that unfortunately, there are times when an individual dies owning assets that are not titled in the name of the trust, even though they invested the time, effort and expense of having a trust prepared. This is an example of the failure to properly fund the trust, whether the settlor/grantor was unaware he or she was responsible for transferring assets into the name of the trust, forgot about the asset or simply neglected to take the necessary steps to retitle the asset. When this occurs, a probate administration utilizing a “pour-over will” is necessary to funnel the assets through the probate process into the trust for proper administration by the trustee.
What Assets are Not Included in a Trust Administration?
Non-trust estate assets are not subject to the terms of the trust agreement and will pass by operation of contract or by operation of law to the person or persons named as beneficiaries or to joint-owners outside of the provisions of a trust agreement. Individuals receiving non-trust assets are not required to share those assets with trust beneficiaries and are generally also not required to use those assets to pay claims against the trust estate.
Here are some examples of non-trust assets:
– Bank Accounts that are “payable on death” (a.k.a. “P.O.D.”) to a named beneficiary
– Brokerage Accounts that are “transferrable on death” (a.k.a. “T.O.D.”) to a named beneficiary
– Retirement Accounts with a named beneficiary
– Annuities with a named beneficiary
– Life Insurance Policies with a named beneficiary
– Real Property or Personal Property owned as “joint tenants with right of survivorship” (a.k.a. “J.T.W.R.O.S.”)
– Real Property or Personal Property owned as “tenants by the entirety” (a.k.a. “T.B.E.” or “as husband and wife”)
Keep in mind that sometimes when designated beneficiaries predecease or die before the decedent, those assets may be included in the decedent’s probate estate, which, with a properly drafted estate plan, will ultimately flow into the decedent’s trust estate to be managed by the Trustee. Additionally, where the joint-owner of a particular asset predeceases or dies before the decedent, that asset may also be included in the decedent’s probate estate which should follow the same path.
Complete our simple estate evaluation to see if you qualify for a COMPLIMENTARY ESTATE EVALUATION or Book Complimentary Estate Administration Consultation Now with one of our experienced probate and trust administration attorneys.
What is a Trustee?
A Trustee is an individual nominated in a trust agreement to manage the trust assets. The individual named as trustee has a legal obligation to administer the trust properly, in accordance with the terms of the trust agreement and applicable Florida law.
What Does the Trustee Do?
In a typical trust administration, the Trustee will:
– Deposit decedent’s Last Will & Testament with the appropriate Clerk of Courts
– Record decedent’s Death Certificate with the appropriate Official Records/Recording Department
– File a Notice of Trust with the appropriate Clerk of Courts
– Ascertain trust assets and liabilities
– Hold, preserve and safeguard trust property
– Prudently invest trust assets (prudent investment rule)
– Make tax decisions concerning the trust
– Keep written records of all trust transactions and account to beneficiaries as required by the Trust Code
– Issue statements of account to trust beneficiaries (accounting statute)
– Issue tax reports to trust beneficiaries
– Communicate with beneficiaries
– Fiduciary obligations to trust beneficiaries and creditors pursuant to Florida law (administer trust in accordance with the provisions of the trust agreement and acting in the best interest of the trust beneficiaries)
– Provide required notice to beneficiaries and creditors
– Distribute trust income and/or principal to the beneficiaries, as directed in the trust agreement
All of the duties and tasks that must be performed by a personal representative in connection with a probate administration should also be performed by the trustee of a revocable trust, although different documentation is required to be filed with the Courts.
What are the Trustee’s Fiduciary Responsibilities?
Trustees have specific fiduciary duties to all of the beneficiaries of a trust such as:
– A trustee has a duty to administer the trust in good faith, in accordance with the terms and purposes of the trust, and in the interests of the beneficiaries pursuant to Fla. Stat. § 736.0801.
– A trustee owes the trust beneficiaries a duty of loyalty to administer the trust “solely in the interests of the beneficiaries” pursuant to Fla. Stat. § 736.0802.
– A trustee owes the trust beneficiaries a duty to “act impartially in administering the trust property, giving due regard to the beneficiaries’ respective interests” pursuant to Fla. Stat. § 736.0803.
– A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust, and shall exercise reasonable care, skill and caution. Fla. Stat. § 736.0804.
– A trustee has a duty to take reasonable steps to take control of and protect trust property and assets. Fla. Stat. § 736.0809.
– A trustee who has special skills or expertise, or is named trustee in reliance on the trustee’s representation that the trustee has special skills or expertise, shall use those special skills or expertise. Fla. Stat. § 736.0806.
– A trustee owes a duty to keep the beneficiaries of the trust reasonably informed about all monies, funds, assets and personal property that came into his or her possession as trustee, and which were distributed, as well as to account for all assets, income, expenses, gains or losses of the trust pursuant to Fla. Stat. §§ 736.0810, 736.0813, and 736.08135.
– A trustee has a duty to inform each of the trust beneficiaries and account for the assets and liabilities of the trust and for the particulars relating to the trust administration in a trust accounting at least on an annual basis and on the termination of the trust or on change of the trustee pursuant to Fla. Stat. §§ 736.0813 and 736.08135.
– A trustee has a duty to enforce claims, to defend actions, to preserve trust property and assets, and to exercise reasonable care and skill in the administration of the trust pursuant to Fla. Stat. §§ 736.0811 and 736.0816.
If the trustee breaches any of their fiduciary duties to the trust beneficiaries, they would be held accountable on an individual basis for these breaches of trust through intentional conduct, negligent conduct or even reckless indifference conduct.
Do I Need a Lawyer for Florida Trust Administrations?
While it may not be mandated pursuant to Florida law, trust administrations have a number of technical rules and requirements that are difficult for a non-attorney to properly navigate. Florida’s body of trust laws is far too complex for many trustees to follow without legal counsel and guidance, not to mention the Courts are not permitted to provide legal advice regarding trust administrations.
Trusts need to be carefully administered with the guidance of experienced trust and estate administration attorneys. The trustee of a trust owes extensive fiduciary obligations to the trust beneficiaries. A Trust Administration is an incredibly complex legal process and if not handled properly, can leave the trustee open to personal financial liability, not to mention potentially ruining family relationships. Litigation can result if the Trustee does not administer the trust in with these fiduciary obligations in mind, in accordance with the terms of the trust agreement and applicable Florida law.
The attorneys at e-Estates and Trusts have decades of experience guiding trustees step-by-step through the intricacies of the trust administration process and advising them along the way. Not only do we prepare the necessary documentation for you to comply with the terms of the trust agreement as well as applicable Florida law, we advise you regarding obligations necessary to carry out your duties properly. We are happy to work alongside your existing professional network – your most trusted bankers, financial advisors and CPAs – to facilitate an expeditious administration of the trust and ensure you comply with all fiduciary obligations under Florida law. If you do not have a professional network you can rely on, we can provide referrals to a trusted network of professionals you can work with, if you so elect.
How We Operate:
To best serve our clients, we set aside blocks of time to speak with clients via telephone or video conference. If you would like to confer with one of our experienced attorneys, please select one of the options below:
Existing Client Conference – During this call, you will receive an update on your legal matter and can ask any questions you may have. Check-In Calls are scheduled for 15 minutes and are only available for existing clients who have signed an Employment and Fee Agreement with our firm.
Estate Planning Consultation – During this conference, we will discuss your personal and family dynamics, assets, liabilities and overall goals to develop your individualized estate plan. To make the best use of our time during this conference, potential clients submit a completed Estate Planning Questionnaire prior to the scheduled consultation.
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Estate Administration Consultation – During this conference, we will assess your case to determine whether we will be able to assist and to begin developing a legal strategy for your matter. In order to make the best use of our time during this call, potential clients submit a completed “Estate Administration Questionnaire” and any Last Will & Testament, Trust Agreement, Separate Writing Regarding Tangible Personal Property, or any other estate planning documentation the decedent had in place through our secure client portal .
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