Can a Trustee Be Personally Liable in Florida?

Serving as a trustee carries significant legal responsibilities. Trustees must administer a trust in good faith, with loyalty, prudence, and complete accountings to beneficiaries.

When trustees fail to uphold these duties, the question of if they can be personally liable for resulting harm may arise. The short answer is yes, but with important statutory nuances and procedural requirements. Bring your unique concerns to the attention of a Pompano Beach estate litigation lawyer.

Florida Law on Trustee Liability

Under the Florida Trust Code, trustees generally have fiduciary obligations to beneficiaries, including duties of loyalty, impartiality, prudence, and full disclosure. When these duties are violated, beneficiaries may pursue remedies under statute and equity, including claims for compensatory damages, surcharge, disgorgement, removal of the trustee, and restitution of trust assets.

The Florida Trust Code includes provisions that limit personal liability in certain scenarios:

• A trustee is not personally liable on contracts entered into in the fiduciary capacity if the trustee discloses that capacity in the contract.
• Torts and property obligations. A trustee may only be personally liable for torts or obligations arising from ownership or control of trust property if the trustee is personally at fault.
• Statutory defenses. Trustees can also limit liability through trust language, beneficiary consent, release, or ratification under certain conditions.

In practical terms, this means that liability is not automatic simply because a loss occurred. Instead, beneficiaries must show that the trustee’s conduct, not merely the status as trustee, constituted a breach of fiduciary duty.

Trustees can face personal liability in circumstances such as mismanagement, self-dealing, and breaches of fiduciary duty. In such cases, beneficiaries may seek a surcharge action or disgorgement remedy to hold trustees personally accountable for losses attributable to their misconduct. Personal liability may also extend to legal fees.

For example, a recent Florida court clarified liability principles for personal liability claims against trustees. In that case, a co-trustee was accused of transferring $100,000 from a related trust into his personal account. Yet an appellate court reversed a trial court’s order because of a procedural defect.

Practical Takeaways for Trustees and Beneficiaries

It is essential that trustees exercise care. This means avoiding conflicts of interest, maintaining accurate records, providing timely accounting, and communicating openly with beneficiaries. Also, using clear trust language and statutory defenses is important while also recognizing they do not immunize trustees from liability for misconduct.

For beneficiaries, consulting an experienced Pompano Beach estate litigation lawyer early in the process can preserve rights. This is particularly true in cases involving strict statutes of limitations and procedural requirements.

Ultimately, while a trustee is protected in certain representative roles, Florida courts hold trustees personally accountable when their misconduct harms beneficiaries. Understanding both statutory protections and the exceptions through case law is essential to navigating trust disputes effectively.

Are you hoping to hold a trustee accountable? You don’t have to go through the process alone, the attorneys at Mark R. Manceri, P.A. are available to provide you with the legal support you need. Schedule a confidential consultation today.