Blogs from January, 2012



Impartial – unable to perceive any promise of personal advantage from espousing either side of a controversy.  Ambrose Bierce

Recently, the problem of a trustee financially favoring one beneficiary over another presented itself.  In this case, the trustee was making distributions to one beneficiary without question, while denying the other beneficiary similar distributions.  When this occurs, it is imperative that a competent attorney review the trust document and any amendments to the trust to determine if there exists any specific language allowing for the inequity in distribution.  If no such language exists, then the trustee has breached their fiduciary duty of impartiality to the beneficiaries of the trust.

Florida Statute 736.0803 states that “[i]f a trust has two or more beneficiaries, the trustee shall act impartially in administering the trust property, giving due regard to the beneficiaries’ respective interests.”   The trustee cannot favor one beneficiary over the other unless there is language in the trust document that allows the trustee to do so.

Also, the Uniform Trust Code Section 803 states that the duty of a trustee to act impartially does not mean that the trustee is required to treat the various beneficiaries equally.  Rather, the trustee must treat the beneficiaries equally in light of the purposes and terms of the trust.  The Restatement (Third) of Trusts, Section 79(2) states that the trustee has a duty of loyalty which is the specific duty to treat all trust beneficiaries impartially, that is, not favor one beneficiary over another unless authorized to do so by the governing instrument. 

Even when so authorized, the trustee’s discretionary acts favoring one beneficiary over another must be in furtherance of the intentions of the settlor/grantor and not in furtherance of the trustee’s own personal biases and preferences.  The trustee must be impartial when dealing with conflicting equitable interests of beneficiaries.  Therefore, a trustee must deal impartially with the trust beneficiaries, treat them even-handedly, and act in the best interest of the trust as a whole.  Friedman v. Friedman, 844 So.2d 789 (Fla. 4th DCA 2003); Morse v. Stanley, 732 F.2d 1139, 1145 (2d Cir. 1984). 

If you believe a trustee is breaching their fiduciary duty to act impartially, it is imperative that you have a competent attorney to review the trust documents to determine the specific intentions of the settlor/grantor.  If you find that the trustee did, in fact, breach their fiduciary duty to act impartially, and the trustee has favored one beneficiary over another, then it may be necessary to commence litigation in order to remove the trustee, has a successor trustee appointed, and have the trust disbursements equalized between the beneficiaries.


Most Recent Posts from January, 2012