Skip to Content
Top

Trustee’s Duty to Inform and Account

|

Recently, there have been a few cases wherein a client inquires about a Trust in which the beneficiaries were not kept informed nor provided with a copy of the interim accounting or inventory. This is commonly referred to as a breach of trust whereby the trustee breached his or her duty to inform and account.  The inquiries dealt with decedents who passed in 2006 and early 2007.

The Trust statutes changed dramatically in 2006. In fact, they went from Chapter 737 to newly created Chapter 736. In some sections, the statute did not take effect until July 1, 2007. Therefore, handling a Florida Trust Litigation case from an Irrevocable Trust that was established in 2006 or 2007 may need to be litigated differently than a Trust in 2014.

DOES THAT MEAN A TRUSTEE MAY NOT BE LIABLE?

No. There are a variety of strategic approaches a Florida Probate and Trust Litigation attorney may take to litigate the matter. For instance, a Trust Litigation Attorney may review Florida Statutes of 2005-2014 to cover a 2006 Trust case. Depending upon the circumstance, the Trust Litigation Attorney may use the procedural statutes of the current year to his or her advantage. While substantive law may not be applied retroactively, procedural provisions may be applied retroactively.

IS THE ACTION BARRED?

The first step most experienced Florida Trust Litigation Attorneys take is to determine if the action is barred. The attorney would review Florida Statutes in the year that the Trustee accepted the Trust and in some instances, the year the Trust was established. For instance, utilizing a 2006 case, a Trust Litigation Attorney would review 2005-2013 statutes. In this blog’s example, the Trust was accepted in 2006.

After determining that the action was not barred, then the attorney may review which statute year is to the benefit of his or her client. As stated above, procedural law may be applied retroactively subject to the court’s discretion.

An experienced Florida Trust Litigation Attorney may review the Trustee’s duty to administer trust prudently, administer trust in good faith, duty of loyalty, duty to inform and account, duty not to comingle, and liability to beneficiaries in order to set up his strategic plan for litigating the case. This approach covers several angles counsel may take to plead or defend the case.

REVIEW DUTY TO REASONABLY INFORM AND ACCOUNT

First, the Trust Litigation Attorney would review Section 737.303, Florida Statutes (2005) for Breach of Duty to Inform and Account for accounting periods after January 1, 2003 but before July 1, 2007. During this period, the Trustee was to inform the beneficiaries in writing of the full name and address of the Trustee who accepted the Trust.  Also, the Trustee, upon reasonable request of a beneficiary, was to:  (a) provide a beneficiary with a complete copy of the Trust instrument, including amendments; and, (b) provide relevant information about the assets of the Trust and the particulars relating to administration. Also, during this period the beneficiary was entitled to a Trust Accounting annually and upon termination of the Trust.

Next, he would review Section 736.0813, Florida Statutes for years 2006-2013 for each accounting period thereafter. During this period, the Trustee was to give notice within 60 days after acceptance of the trust to the qualified beneficiaries, along with the address of the Trustee. Also, the 60-day notice rule required a Trustee to give: (a) notice to qualified beneficiaries of the trust’s existence, (b) the identity of the settlor or settlors, (c) the right to request a copy of the trust instrument, and (d) the right to accounting.

REVIEW CASE LAW

For the most part, case law is limited in this area. One significant case pertains to the alleged Defendant’s failure to pay Plaintiffs their fair share of the money due from a Trust property sale. As a result, the Trust beneficiaries filed suit for an accounting of a Trust. Defendant beneficiary counterclaimed. Partial summary judgment was granted to Defendant. The court affirmed “because the statute of limitations for an accounting on a trust did not begin to run until there was a repudiation of the trust or adverse possession of the trust assets by the trustee, and the knowledge of that fact by the beneficiaries.”

The outcome of the appeal was the summary judgment was reversed. Knowing there was no accounting is only a breach of trust and therefore, it did not trigger the statute of limitations.

If you have any concerns regarding the appointment of a Personal Representative of an estate or feel you may be more qualified as a Personal Representative over another individual, contact Florida Probate Litigation Attorney Thomas Upchurch to discuss your probate litigation matter at (386) 272-7445 or email him at tupchurch@upchurchlaw.com for your initial consultation.

Florida Estate Planning Attorney Thomas Upchurch serves the entire state of Florida, serving primarily in vicinities of Central and North Florida Areas which include Daytona Beach, Port Orange,Deland, Ormond Beach, Jacksonville, Palm Coast, Orlando, Saint Augustine, and New Smyrna Beach.Areas he serves in South Florida include Miami, Ft. Lauderdale, Coral Springs, and Coral Gables and in West Florida include Tampa and Clearwater. Even if your city is not listed, Attorney Upchurch may still handle your matter. 

Attorney Thomas Upchurch is on Facebook. You may like his Facebook page.

FULL DISCLOSURE

This blog post only reflects my personal views in my individual capacity. It does not necessarily represent the views of my law firm or my past clients, and is not sponsored or endorsed by them. The case-specific information contained in this blog post is based solely on opinion, and is provided only for educational purposes and is not intended to provide specific legal advice. No representation is made about the accuracy of the information posted on this blog site. Blog topics may or may not be updated and entries may be out-of-date at the time you view them.

The post Trustee’s Duty to Inform and Account appeared first on Upchurch Law.

Share To: