In our firm’s estate planning practice, we commonly help clients set up a “Living Trust” (also called a “Revocable Trust” or a “Revocable Living Trust”). In this blog, we will simply call it a “Trust.” Establishing a Trust has many benefits, including avoiding probate and controlling distribution to minors or to financially irresponsible beneficiaries.
One of the most important decisions which must be made in establishing a Trust is deciding who will serve as Trustee. The Trustee is the one in charge of administering the Trust and carrying out the wishes of the person who established the Trust. The Trustee serves as a fiduciary—meaning that they must put their beneficiary’s interests ahead of their own. The Trustee must act in good faith and on behalf of the beneficiaries’ best interests.
A common question which we are asked by clients is must the Trustee be a Florida resident or must the Trustee be related to the grantor by blood or marriage? Under current Florida law, the answer is “no.” An adult person residing in another state may serve as Trustee without restriction. Specifically, the person designated as Trustee does not have to be closely related by blood or marriage.
This differs from a Last Will and Testament (“Will”). With a Florida Will, the person who is named to be in charge of the deceased persons’ estate is called the “Personal Representative” (people commonly use the term “Executor” but the correct name is Personal Representative). Section 733.304, Fla. Stat. requires that the Personal Representative must be a Florida resident unless he or she is closely related to the Testator by blood or marriage. If he or she is not, then that person does not qualify to serve as Personal Representative. There is no such provision under the Florida Trust Code requiring the Trustee to be a Florida resident or to be related to the Testator by blood or marriage.
That being said, sometimes in choosing a Trustee the grantor of the Trust may consider where the proposed Trustee lives. This is not required but may be as a matter of convenience and availability. For example, if the grantor of a Trust has two persons in mind and one is a resident of Georgia and the other is a resident of Hawaii, the grantor might consider the logistical or practical aspect in picking a Trustee. In other words, if the two people are equally capable, the one living in Georgia might be better able to carry out his or her responsibilities than one who lives half-way around the world.
In making a decision on who to appoint as Trustee, a person should seek counsel from an experienced estate planning attorney. While the attorney cannot (and should not) tell the person who to select, the attorney may be able to help that person take into account facts that lead to a good choice.