What to Expect from a Trustee

In a trust, there are grantors, trustees, and beneficiaries. If you are creating and executing a trust, you are the grantor. The grantor appoints a trustee to carry out the trust and beneficiaries. The beneficiaries are those who the trust is created to befit.

Most living trusts initially name themselves as a trustee at first. The successor trustee becomes the new trustee after the grantor’s death or in capacitance. They are then responsible for the trust and ensuring the beneficiaries receive their dues. Many people have questions about beneficiaries. What can beneficiaries do? Is it okay for beneficiaries to withhold funds? Can beneficiaries change how much a person receives?

In most cases, trusts become irrevocable when the grantor dies. This means that beneficiaries can no longer be changed without contest. In other words, a trustee can no longer alter the terms of the trust on their own. They can’t withhold benefits from any heir or fail to disclose benefits owed.

What are Trustees Required to Do?

As soon as a trustee enters into the role, the State of Florida requires them to state that they are the trustee to any beneficiaries. All trustees should send a letter and provide contact information. If the trustee is an attorney, this will usually include a mention of privileged communication. That is that any correspondence is covered by attorney-client privilege and confidentiality rules.

Trustees have a duty of loyalty and impartiality. Trustees cannot choose to “give themselves a little extra.” They cannot appropriate more funds to their favorite relative. Use of the trust assets must be communicated to beneficiaries in a timely and clear manner. If assets or funds payout to the trustee, this is the business of the beneficiaries in the trust. Every action, therefore, must be administered to the interest of the beneficiaries alone.

The State of Florida finds it the trustee’s duty to inform and account. (Florida Statutes (Florida Trust Code) ยง736.0813). This means trustees must keep all qualifying beneficiaries of the trust informed of the trust and how it will be administered. This is important as it provides legal remedies and rights to beneficiaries. If trustees perform dereliction of duties, they are subject to liabilities for that behavior. Beneficiaries must be informed of these rights as well.

When Should I Contact an Attorney?

It’s a sadly common thing in trust proceedings for trustees to be petty or deceptive. Beneficiaries are left in the dark regarding the state of the trust well past the point of court filings. Questions regarding payments, asset control, and more can be left vague. A rocky relationship or desire for personal gain can cause trustees to act untoward. Misappropriation of trust assets is not unheard of.

If your trustee is failing to disclose information, hiding the ball, or being vague and confusing, it’s time to seek legal counsel. Disclosure requires total disclosure; communication requires total communication. It is not the trustee’s position to decide what information you do or don’t need to know about your benefits. Trustees are required to follow the trustor’s wishes, to act with loyalty and communication. Failure to do so could have serious consequences. Dowd Law will help ensure you’re being treated the way you should by your trustee.