• Accounting – if a beneficiary has received inadequate or insufficient information from a trustee, the beneficiary may need to formally demand an accounting to compel compliance.
• Removal – if a trustee has acted inappropriately and needs to be removed from the position of trustee, a beneficiary may seek to have the court remove the trustee.
• Breach of Fiduciary Duty – if a trustee has engaged in conduct that violates his duties to the beneficiaries, a beneficiary may sue the trustee for breach, which is a cause of action for money damages.
• Trust Modification – if a beneficiary believes there is a mistake in the trust or that the person who made the trust did not adequately anticipate the beneficiary’s current needs, he may seek assistance – either through the courts or outside of the courts – in changing the terms and provisions of the trust.
• Trust Termination – if the beneficiaries of a trust believe that the trust’s primary purposes has been fulfilled (e.g. to educate a certain class of beneficiaries), they may seek to have the trust terminated and the balance of the trust funds distributed to the beneficiaries.
• Undue Influence/Lack of Capacity – like a Will Contest, if an interested person believes that a trust document was created as the result of undue influence or lack of capacity, he may bring a cause of action challenging the validity of the trust document or parts of the trust document.

If you need to speak with a FL Trust Dispute Lawyer, please call the Law Offices of Adrian Philip Thomas, P.A. toll free at (800) 249-8125 for a free consultation.

             A Constructive Trust is an equitable remedy and is created when a court, through application of a legal fiction, deems property formerly held by one who wrongfully obtained the property, to be held in Trust for the one who the property justly belongs to be the beneficiary of the Trust.  Unlike other Trusts, a Constructive Trust is not predicated upon the party’s intent.  It is an equitable remedy and a tool used by courts to prevent someone from being unjustly enriched at the expense of an innocent victim.

            American Jurisprudence follows two distinct paths of reasoning with regards to the creation of a Constructive Trust.  One school of thought holds that a Constructive Trust arises when a transaction procured by fraud requires a court to impose a remedy of a Constructive Trust.  Another school of thought (and the one followed by Florida courts) holds that a Constructive Trust is not a Trust at all,  but is merely a remedy imposed by a court when asked to do so by a beneficiary who has been victimized by some inequitable and unjust conduct.  This is the minority view in the United States and is still followed by Florida courts.

            The Second District Court of Appeals recently reaffirmed this minority view of the law when it dealt with the allegations in a complaint that attempted to set forth a cause of action for a Constructive Trust.  In Swope v. Harmon (Fla.2^nd DCA 2D11-3228, March 28, 2002) 37 Fla.L.Weekly D725, the court faced an appeal by Plaintiff after the trial court had dismissed the complaint finding that the plaintiff failed to allege sufficient facts to satisfy all the requirements for imposition of a Constructive Trust.  The Second District Court of Appeal affirmed the result but for different reasons then those stated by the trial court.  According to the Second District Court of Appeals, “A Constructive Trust is not a traditional cause of action; it is more accurately defined as an equitable remedy.”  The Court also stated that “because a Constructive Trust is a remedy, it must be imposed based upon an established cause of action.”

            Probate litigators who frequently face situations where an innocent party has been victimized by a wrongdoer, (and the wrongdoer has possession of property that does not rightfully belong to them through using undue influence, fraud, duress or coercion of another by changing a Will or Trust or some other unscrupulous conduct,) are equipped with the extraordinary remedy of Constructive Trust.  This equitable remedy can be critical in achieving justice for victims of undue influence and other tortious conduct in connection with the interference with the family’s inheritance and expectancy.

“The prudent heir takes careful inventory of his legacies and gives a faithful accounting to those whom he owes an obligation of trust.”  John F. Kennedy

When a Revocable Trust is executed, the Trustee is usually the person who executed the trust.  The settlor of the trust could also appoint another person or financial institution as the Trustee of his or her revocable trust.   When the Trustee dies or is no longer able to serve, a successor trustee is named in the trust instrument, which directs and authorizes the successor trustee to perform their fiduciary duties as successor trustee. Florida Statute 736.0401 and 736.0402.  What happens if the trustee or the successor trustee does not perform their fiduciary duties as trustee?  The beneficiaries and residual beneficiaries of the trust should take careful inventory of their legacy.  They are entitled to a yearly trust accounting from the trustee or successor trustee pursuant to Florida Statute 736.08135 and 736.0810.  In the event the beneficiaries of the trust request from the trustee or the successor trustee an annual accounting, and fail to receive one, the trustee is in violation of their fiduciary duty as trustee pursuant to Florida Statute 736.08135.

The language of the trust document should be reviewed by competent counsel to determine if and when the trustee or successor trustee may invade the principal of the trust.    The polestar of trust or will interpretation is the settlor’s intent.  Bryan v. Dethlefs, 959 So.2d 314 (Fla. 3^rd DCA 2007); Arellano v. Bisson, 847 So.2d 998 (Fla. 3^rd DCA 2003); Phillips v. Estate of Holzmann, 740 So.2d 1(Fla. 3^rd DCA 1998).  The intent of the settlor is ascertained from the four corners of the document through consideration of all the provisions taken together, rather than from detached portions or any particular form of words.  Bryan v. Dethlefs, 959 So.2d 314 (Fla. 3^rd DCA 2007); Arellano v. Bisson, 847 So.2d 998 (Fla. 3^rd DCA 2003); Phillips v. Estate of Holzmann, 740 So.2d 1(Fla. 3^rd DCA 1998).

If the trustee or successor trustee inappropriately invades the principal of the trust in direct violation of the terms of the trust, the trustee or successor trustee has violated specific terms of the trust by misappropriating a portion or the entire principal of the trust.  Therefore, the trustee or successor trustee have breached their fiduciary duty to administer the trust, as well as breached their duty of loyalty, impartiality, prudent administration, and control and protection of the trust property.  Florida Statutes 736.0801, 736.0802, 736.0803, 736.0804, 736.0809.

If the trustee or successor trustee wrongfully invaded the principal of the trust for their own person benefit, this creates a conflict of interest between the trust’s beneficiaries and the trustee’s fiduciary duty, and a beneficiary of the trust can retain competent counsel to render the transaction voidable.  Florida Statute 736.0802(2); Brigham v. Brigham, 11 So.3d 374 (Fla. 3^rd DCA 2009); J.P. Morgan Trust Company, N.A. v. Siegel, 965 So.2d 1193 (Fla. 4^th DCA 2007); Keye v. Gautier, 684 So.2d 210 (Fla. 3^rd DCA 1996).  A trustee or successor trustee is a fiduciary and owes to the beneficiaries the duty to refrain from self-dealing, the duty of loyalty, and the overall duty to not take unfair advantage, and must act in the best interest of the trust’s beneficiaries.  Capital Bank v. MVB, Inc., 644 So.2d 515 (Fla. 3^rd DCA 1994).  A trustee has the duty to administer a trust diligently for the benefit of the beneficiaries of the trust.  Friedman v. Friedman, 11 So.3d 374 (Fla. 3^rd DCA 2009); Brigham v. Brigham, 11 So.3d 374 (Fla. 3^rd DCA 2009).

Also, Public Policy of Florida, as articulated in numerous court decisions, frowns upon a trustee using trust funds for his own benefit and, as a result of this action, placing these funds unnecessarily at risk.  Keye v. Gautier, 684 So.2d 210 (Fla. 3^rd DCA 1996); Crawford v. Crawford, 129 Fla. 746, 176 So. 838 (Fla. 1937); Jungbluth v. American Bank & Trust Co, 101 Fla. 289, 134 So. 618 (Fla. 1931); Bailey v. Leatherman, 615 So.2d 810 (Fla. 3^rd DCA 1993); Barnhart v. Hovde, 490 So.2d 1271 (Fla. 5^th DCA), review denied 510 So.2d 543 (Fla. 1986); Centrust Savings Bank v. Barnett Banks Trust Co., 483 So.2d 867 (Fla. 5^th DCA 1986); Shriner v. Dyer, 462 So.2d 1122 (Fla. 4^th DCA 1984).

In Barnhart v. Hovde, 490 So.2d 1271 (Fla. 5^th DCA), review denied 510 So.2d 543 (Fla. 1986), Hovde was named trustee for the beneficiaries, who were her stepchildren.  Hovde sold a trust asset (an apartment complex) without obtaining a court order to do so in violation of Fla. Stat. 737.403(2).   Hovde had conflicting interests with the beneficiaries of the trust, and the sale of asset resulted in benefit to the trustee and a detriment to the beneficiaries.  Id.  The Trustee had interests which definitely conflicted with those of the other beneficiaries, which resulted in a benefit to the trustee and a detriment to the other beneficiaries, and the Court found that Hovde violated the terms of the trust and applicable state statutes.  Id.

In the event you believe a trustee or successor trust has breached their fiduciary duty which resulted in a benefit to the trustee and a detriment to the beneficiaries of the trust, it is imperative that you contact competent counsel to review the trust document and any amendments to the trust document, and to seek the appropriate relief in order to ensure that the trust assets are not unnecessarily at risk which could be a detriment to the beneficiaries of the trust.

(a) The trustee has committed a serious breach of trust;

(b) The lack of cooperation among cotrustees substantially impairs the administration of the trust;

(c) Due to the unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or

(d) There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.

A trustee has the duty to administer the trust diligently for the benefit of the beneficiaries. A trustee must deal impartially with the trust beneficiaries, i.e., treat them even-handedly and act in the interest of the trust as a whole. Further, the law requires a trustee to seek approval from a court for the exercise of a trust power when it conflicts with the trustee’s individual interest.

A trustee of a trust has several duties and obligations to the beneficiaries in administering a trust, including but not limited to: administering the trust in good faith, in accordance with its terms and purposes (Fla.Stat. §736.0801); a duty of loyalty and to administer the trust solely in the interests of the beneficiaries (Fla.Stat. §736.0802); the trustee shall act impartially in administering the trust property giving due regard to the respective interests of multiple beneficiaries (Fla. Stat. §736.0803); in administering a trust, the trustee shall only incur expenses that are reasonable in relation to the trust property, the purposes of the trust and the skills of the trustee (Fla. Stat. §736.0805); a trustee shall keep clear, distinct, and accurate records of the administration of the trust (Fla. Stat. §736.0810); a trustee shall keep the qualified beneficiaries of the trust reasonably informed of the trust and its administration (Fla. Stat. §736.0813). A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. In the event a breach of trust occurs, or may occur, the court has several actions it may take to remedy a breach of trust.

Florida Statute §736.1001(2), “Remedies for breach of trust,” provides a non-exclusive list of those actions the Court may take to remedy a breach of trust. The Court may:

a) Compel the trustee to perform the trustee’s duties;

b) Enjoin the trustee from committing a breach of trust;

c) Compel the trustee to redress a breach of trust by paying money or restoring property or by other means;

d) Order a trustee to account;

e) Appoint a special fiduciary to take possession of the trust property and administer the trust;

f) Suspend the trustee;

g) Remove the trustee as provided in s. 736.0706;

h) Reduce or deny compensation to the trustee;

i) Void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of an recover the property or its proceeds; or

j) Order any other appropriate relief.

            In addition to the above list of actions a court may use to remedy a breach of trust, it may also find that a trustee who commits a breach of trust is liable for the greater of the amount required to restore the value of trust property and trust distributions to what they would have been if the breach had not occurred including lost income, capital gain, or appreciation that would have resulted from proper administration; or the profit the trustee made by reason of the breach. (Fla. Stat. §736.1002).

            If you as a beneficiary of a trust have been damaged by a breaching trustee, do not despair as there are several remedies at the court’s disposal. The Court has full discretion when fashioning the appropriate relief based upon the unique facts of your case and the specific damages you have incurred. An experienced trust litigation attorney can present your facts and the necessary evidence the Court will require to determine what specific relief is most appropriate to remedy the specific breaches committed by your trustee.

“Decanting” is the legal term used to describe the distribution of trust property from one trust to another trust pursuant to the trustee’s discretionary authority to make distributions to or for the benefit of one or more beneficiaries.  Common law provides authority for trust decanting, but several states – including Florida – have codified the common law.  Florida Statute §736.04117 became effective on July 1, 2007.

Under common law, a trustee with absolute power to invade principal is the equivalent of a donee of a special power of appointment.  Restatement (Second) of Prop.: Donative Transfers §11.1  Absent a contrary provision in the governing document, a donee of a power of appointment may exercise such power in a manner which is less extensive than authorized by the instrument creating the power.  Thus, “the rationale underlying decanting is that if a trustee has the discretionary power to distribute property to or for the benefit of one or more current beneficiaries, then the trustee, in effect, has a special power of appointment that should enable the trustee to distribute the property to a second trust for the benefit of such beneficiaries.”  William R. Culp, Jr. & Briani Bennett Mellen, Trust Decanting: An Overview and Introduction to Creative Planning Opportunities, Real Property, Trust and Estate Law Journal, Spring 2010, p. 3. The theory is that if there is authority to distribute outright, then there is authority to distribute in further trust. Alan Halperin and Michelle R. Wandler, Decanting Discretionary Trusts:  State Law and Tax Considerations, 29 Tax Management Estates, Gifts & Trusts Journal, 219, 221 (2004).

In 1940, the Supreme Court of Florida considered whether a trustee, who was specifically authorized by the trust document to appoint the trust property among beneficiaries in whatever proportions he desired in his sole discretion, could create a second trust for the benefit of the beneficiaries funded with property distributed from the first trust.  Phipps v. Palm Beach Trust Co., 196 So. 299 (Fla. 1940).  In Phipps, the settlor, Margarita Phipps, created a trusts for the benefit of her four children.  She named Palm Beach Trust Company and her husband as co-trustees.  Her husband was given a personal power of appointment, exercisable during life by written instrument delivered to the corporate trustee or at death in his Last Will & Testament, in favor of the four children and/or their descendants in whatever proportions as he shall determine.  In compliance with the express terms of the trust, Mr. Phipps provided written directions to the corporate trustee to create a second trust for the descendants.  The corporate trustee, in an abundance of caution, brought a suit in equity praying for construction of the original trust. 

The Phipps court held that the creation of the second trust was permissible because the trustee had both a lifetime and a specific testamentary power to direct distributions to trust beneficiaries.  Ergo, the trustee’s power was a power of appointment instead of a discretionary power to distribute trust property.  The Phipps holding does not provide authority for the position that a trustee with a purely discretionary power held in a fiduciary capacity can transfer assets to a new trust.  Florida Statute §736.04117 codifies the principal holding in Phipps. 12 Fla.Prac., Estate Planning §6:41 (2010-2011 ed.).  In summary, the statute provides that a trustee who has absolute power under the terms of the trust to invade principal may make distributions to a second trust if those beneficiaries include only those beneficiaries of the first trust without reducing any fixed income interest.  The exercise of the decanting power is to be done by an instrument in writing, signed and acknowledged by the trustee and filed with the records of the first trust.  Additionally, the trustee shall notify all qualified beneficiaries of the first trust, in writing, at least 60 days prior to the effective date of the trustee’s exercise of the power to invade the principal and must set forth the manner in which the trustee is planning to exercise the power.  The trustee’s notice under this section shall not limit the right of any beneficiary to object to the exercise of the trustee’s power to invade the principal.  Fla.Stat. §736.04117.

Procedurally, the documents employed for a trust decanting should be similar to those used with respect to a resolution to distribute property.  A written document providing the terms of the trustee’s discretionary exercise of the power to decant should set forth the terms of the exercise of the power to appoint trust property further in trust.  It should set forth background information or recitals identifying (1) the current trustees of the original trust and the trustees that are exercising the decanting power (2) when the original trust was formed and by whom (3) the relevant terms of the original trust (4) the trustee’s authority for the decanting, whether pursuant to statute or the trust instrument, and (5) the appointee trust that will receive trust property from the original trust.  The decanting document should also include trustee resolutions designating and appointing assets of the original trust to the appointee trust and directing the appointed assets be held in accordance with the appointee trust.  William R. Culp, Jr. & Briani Bennett Mellen, Trust Decanting: An Overview and Introduction to Creative Planning Opportunities, Real Property, Trust and Estate Law Journal, Spring 2010, p. 43.

For example, 736.04113 of the Florida Trust Code provides for judicial modification of irrevocable trusts when modification is not inconsistent with settlor’s purpose.

Some of the grounds that will allow judicial modification of an irrevocable trust include:

(1) Upon the application of a trustee of the trust or any qualified beneficiary, a court at any time may modify the terms of a trust that is not then revocable in the manner provided in subsection (2), if:

(a) The purposes of the trust have been fulfilled or have become illegal, impossible, wasteful, or impracticable to fulfill;

(b) Because of circumstances not anticipated by the settlor, compliance with the terms of the trust would defeat or substantially impair the accomplishment of a material purpose of the trust; or

(c) A material purpose of the trust no longer exists.

(2) In modifying a trust under this section, a court may:

(a) Amend or change the terms of the trust, including terms governing distribution of the trust income or principal or terms governing administration of the trust;

(b) Terminate the trust in whole or in part;

(c) Direct or permit the trustee to do acts that are not authorized or that are prohibited by the terms of the trust; or

(d) Prohibit the trustee from performing acts that are permitted or required by the terms of the trust.

As you can see, the bolded section above allows for a trust to be terminated in whole or in part.  So can Florida lawyers bust a trust?  The answer is clearly yes.

”When things change very rapidly, we have a fiduciary responsibility to review what are the circumstances.”

–Jozef Strauss

Florida is home to many elderly persons with dementia who are vulnerable to financial exploitation by others.  Unfortunately, the elderly who are susceptible to undue influence are often victimized by their own family members.   All too often, the safeguards that were presumably put in place through estate planning documents are thwarted by unbridled greed.  Sometimes, even the placement of trust by the elderly in a national financial institution will not immunize the elderly from abuses.

A recent Florida appellate opinion details a family scenario frequently encountered by Florida probate lawyers who practice in the field of inheritance disputes involving wills, guardianships, estates and trusts.  Siegel v. Novak –So.3d–, 36 Fla.L.Weekly D2329 (Fla. 4^th DCA October 19, 2011) involves a dispute between the children of Dorothy H. Rautbord (“Mrs. Rautbord”).   Several years ago, Mrs. Rautbord created a will and trust that generally provided that she could use her assets during her life as needed and upon her death, the assets were to be shared among her children and grandchildren.   Specifically, the trust contained a provision that during Mrs. Rautbord’s life, the trustee (a corporate trustee) should manage the trust property for the benefit of Mrs. Rautbord, and “at any time…apply so much or all of the net income and principal [of the Trust property] as the Trustee, in its sole discretion, shall deem appropriate or advisable for the support, maintenance, health, comfort or general welfare of [Mrs. Rautbord].

Several years later, Ms. Rautbord developed severe dementia.  A power of attorney was signed by Mrs. Rautbord in favor of one of her children.  Using the power of attorney, Ms. Rautbord’s child then made withdraws of over $3.3 million from the Trust during Mrs. Rautbord’s life.  The corporate trustee approved all of the withdraws, even though it recognized that “Mrs. Rautbord [was] in her nineties [and] quite frail [.]”  The corporate trustee concluded that the withdrawals and distributions of trust principal were “questionable” but decided to “ratify” the principal distributions.  These approvals were contrary to the practice of the predecessor trustee, who refused to make distributions as gifts because Mrs. Rautbord had been taken advantage of because of her generosity.

After Mrs. Rautbord died and her other children (“the brothers”) discovered the $3.3 million dollars in withdrawals of trust principal, the corporate trustee sought court approval of its conduct in approving the principal distributions.  Two of Mrs. Rautbord’s children (“the brothers”) claimed that the corporate trustee’s and the other child’s (who had the power of attorney) conduct was inappropriate and inconsistent with the terms of the trust.  According to the brothers challenging the conduct, the language of Mrs. Rautbord’s trust instrument did not permit the large withdrawals, which were equivalent to a revocation of trust, which was permitted only upon the existence of certain circumstances.  The trial court told the brothers that they did not have standing to contest any distributions made prior to their mother’s death.  The court reasoned that before Mrs. Rautbord’s death, the trust was revocable, so that the brothers had “no present interest in the trust during the time that the decedent was alive.”  The decision was appealed and the Fourth District Court of Appeals reversed and remanded the case holding that the brothers were entitled to their day in court.  Siegel v. Novak (“Siegel I”) 920 So.2d 89 (Fla. 4^th DCA 2006).

After the appellate court’s decision, the corporate trustee again requested the trial court’s judicial endorsement of its decision to ratify the $3.3 million of “questionable” withdrawals and principal distributions from the trust.  Once again, the trial court found that the brothers did not have standing the challenge certain distributions made prior to Mrs. Rautbord’s death.  However, on appeal, the Fourth District said that

“the trial court and parties did not interpret Siegel I  correctly.  Our opinion in Siegel I determined that the Siegels did have standing to challenge the trustee’s actions, because they had a direct interest in the corpus of the trust after their mother’s death.”

The Court stated that “the trial court incorrectly treated the question of whether the withdrawals were appropriate and authorized as a question of standing.”  The Court of appeals examined the trust language and emphasized the fact that Mrs. Rautbord reserved to herself the power to revoke the trust.  The brothers argued that the withdrawals of principal were in fact revocations of the trust, and that the trial court’s ruling on standing prevented the issue from being litigated.

The appellate court agreed with the brother’s argument.  In its analysis the Fourth District Court of Appeals looked at the language of the trust and analogized the facts of the Siegel case to another case where it was held:

“In creating a trust, the settlor was not merely designating trustees as conduits through whom a gift could be made to the daughter whenever it would be to her advantage.  The trust represented a plan of the settlor that included not only the beneficiary Margaret, but also remaindermen.  In adding a flexible provision for the invasion of principal for the “best interest” of the beneficiary, the settlor was not injecting a facile means for destroying the trust. “

* * *

By limiting the invasion of principal to those instances where it will be for the “best interest” of the beneficiary, the settlor was, in effect, restricting the power of the trustees, and imposing duty on them to limit such invasion for such objects and purposes as, in their judgment, would be beneficial to the cestui que trust.”

Important also in the Fourth District’s analysis was their holding that the withdrawals of trust principal were the equivalent of a partial revocation of the trust.  The Court turned to the Commonwealth of Pennsylvania and adopted that court’s reasoning:

“We are not prepared to recognize a distinction between settlor’s right to withdraw principal from the trust and his right to revoke the trust in whole or in part.  Both cause an amendment or partial revocation, and with the same legal effect.   For example:  If  settlor placed $100,000 in an inter vivos trust, with all the reservations hereinbefore discussed, and subsequently concluded to reduce the trust to $50,000, there would seem to be no difference in principle if settlor by written instrument revoked or modified the trust by reducing it by one-half, or exercised his right to withdraw one half from the operation of the trust.”  A determination of whether these withdrawals of principal constitute partial revocations of the trust should await the full development of the evidentiary record on each transaction.”

Unfortunately, the court did not discuss the application of Fla.Stat. §736.0603, which provides that while a trust is revocable, the duties of the trustee are owed exclusively to the settlor.   However, the Court did remand the case to the trial court again with directions to hold an evidentiary hearing and the brothers must be given the opportunity to present evidence to support their claims of breach of fiduciary duty by both the corporate trustee and their sister.

Personal Jurisdiction

It is not uncommon in South Florida for individuals to be beneficiaries of Florida trusts that have a trustee located in a state other than Florida.  There is no rule that the trustee of a Florida trust must be a Florida resident, or even have a presence in Florida.  However, prior to the enactment of the Florida Trust Code there was no specific provision of the Florida Statutes which conferred personal jurisdiction over parties who were not within the geographical boundaries of Florida.  Instead jurisdiction was obtained on out of state trustees and beneficiaries under the general long-arm statutes found in chapter 48.  This lead to substantial litigation in the form of Motions to Dismiss for Lack of Personal Jurisdiction.

In trust litigation (as in all lawsuits), it is necessary for the Court to have personal jurisdiction over the trustee(s) and beneficiaries.  Otherwise, the Court is unable to hear and remedy wrongs that have been committed.  By enacting the Florida Trust Code (and specifically section 736.0202), the legislature included a long-arm statute specifically tailored to trust litigation matters.  Under Florida Statute 736.0202, with respect to a trust having its principal place of administration in Florida, a trustee submits to the jurisdiction of Florida courts either by accepting the trusteeship or by moving the principal place of administration to this state; the beneficiaries are subject to the jurisdiction of Florida courts with respect to any matter involving the trust; and recipients who accept a distribution from a trust submit personally to the jurisdiction of Florida courts regarding any matter involving the distribution.

This addition to Florida law is very important in trust litigation as it expressly confers jurisdiction upon out of state trustees of Florida trusts.  This helps protect both the grantor’s intent and the rights of a beneficiary, and allows a court to hear and adjudicate controversies regarding trusts.

The trustee is the person with legal title to trust assets; however, the trust beneficiaries are the true owners of the trust assets.  The trustee has a legal duty to inform and to account to the beneficiaries and the trust beneficiaries are entitled to inspect all documents and papers relating to the trust. The existence of a legal duty is important because it gives beneficiaries rights and remedies and exposes a trustee to liability for breach of those duties.

In Florida, the trustee’s duty to inform and to account is found in the Florida Statutes (Florida Trust Code) at §736.0813, which states that the trustee shall keep the qualified beneficiaries of the trust reasonably informed of the trust and its administration.  This duty includes notifying the beneficiaries of the trustee’s name and address, notifying the beneficiaries of an irrevocable trust that the trust exists and that they have certain rights, providing a copy of the trust instrument upon request, providing a trust accounting (F.S. §736.08135), and disclosing assets and liabilities.

All too often, this office is contacted by beneficiaries who have no idea what is going on with the administration of a trust and the trustee refuses to provide the information requested, even after a demand for an accounting has been filed with the courts.  Sometimes it is because there is a contentious relationship and the trustee is being spiteful, but sometimes it is because the trustee is trying to hide misappropriation or mishandling of trust assets.  If you are the beneficiary of a trust and have not received full disclosure from the trustee, you should contact a skilled trust attorney to protect your rights and to compel a trustee to perform his or her duties.