Breach of Fiduciary Duty Under Florida Probate Law
Setting up a Florida Trust during your lifetime could be beneficial. The creators of a Living Trust include their assets in a Living Trust and continue to use them until their death at which point the assets are distributed to beneficiaries. When everything goes according to plan, a Trust can be a great wealth retention tool. When the Trustee who is appointed to disburse the assets in your Trust violates their fiduciary duty, however, negative outcomes often occur.
What Is A Fiduciary Duty?
Every Florida Trust must name a Trustee who is in charge of administering and distributing the property in a Trust. The beneficiaries of a Trust are those who receive assets per the terms of the Trust. Trustees owe a fiduciary duty to the beneficiaries of the Trust. Trustees owe the beneficiaries a duty of care, a duty of loyalty and a duty of full disclosure.
Duty of Loyalty
A Trustee owes the beneficiaries a duty of loyalty to manage the Trust not for their own personal best interests but for the best interests of the beneficiaries. A breach of the duty of loyalty could occur if the Trustee is biased against one beneficiary or acts preferentially towards a beneficiary at the expense of another. If the Trustee takes action to benefit himself personally such as giving his friends or family a lower than market deal on renting or selling the assets of the Trust, this could also be a breach of the duty of loyalty.
Duty of Reasonable Care
The Trustee has a fiduciary duty to act as any reasonably prudent person managing a Trust would do. Thus, if the Trustee makes a decision for the Trust that is unreasonable, they may have breached the duty of care. If the Trustee is paying themselves excessive compensation, this could be a breach of fiduciary duty. Another example would be when a Trustee makes unreasonable investment decisions on behalf of the beneficiaries. Finally, if a Trustee is stealing assets from the Trust, she would clearly be breaching the fiduciary duty of reasonable care.
The Florida Trust Code
The Florida Trust Code requires Trustees to provide “relevant information” and keep clear and accurate accounts of the administration of the Trust. A breach of the duty of adequate disclosure could include intentionally or negligently failing to share pertinent information about the Trust with the beneficiaries.
Defenses to Florida Breach of Fiduciary Duty
Trustees accused of breach of fiduciary duty can assert a factual defense, claiming that they did not breach their duty. They can also argue that the person asserting a breach of fiduciary duty did not bring the claim in time or they could argue that the Trust’s self-executing accounting release provisions or exculpatory clauses prevent them from being charged with breach of fiduciary duty.
Are you the beneficiary of a Trust? Are you concerned about a Florida Trustee breaching a fiduciary duty? Let us help you fight for your rights. Pompano Beach estate and trust litigation lawyer Mark Manceri has over 30 years of estate and trust litigation experience. Contact his Fort Lauderdale, Florida office for assistance today.