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Rights of a Qualified Beneficiary under a Trust in Florida

by | Nov 1, 2022 | Beneficiary, Estate Planning, qualified beneficiary, Trust, Trustee |

Florida’s Trust Code, set forth in Chapter 736, Fla Stat., defines who is a “qualified beneficiary” under a Trust and sets forth the rights such a beneficiary has with regard to the administration of the Trust. Some of the more important rights of a qualified beneficiary under a Florida Trust are set forth in Section 736.0813, Fla Stat. entitled “Duty to Inform and Account.” This section provides that “[t]he Trustee shall keep the qualified beneficiaries of the Trust reasonably informed of the Trust and its administration” (emphasis added).

The Trustee’s duty to inform and account includes, but is not limited to, the following:

(a) Within 60 days after acceptance of the trust, the trustee shall give notice to the qualified beneficiaries of the acceptance of the trust, the full name and address of the trustee, and that the fiduciary lawyer-client privilege in s. 90.5021 applies with respect to the trustee and any attorney employed by the trustee.

(b) Within 60 days after the date the trustee acquires knowledge of the creation of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, the trustee shall give notice to the qualified beneficiaries of the trust’s existence, the identity of the settlor or settlors, the right to request a copy of the trust instrument, the right to accountings under this section, and that the fiduciary lawyer-client privilege in s. 90.5021 applies with respect to the trustee and any attorney employed by the trustee.

(c) Upon reasonable request, the trustee shall provide a qualified beneficiary with a complete copy of the trust instrument.

(d) A trustee of an irrevocable trust shall provide a trust accounting, as set forth in s. 736.08135, from the date of the last accounting or, if none, from the date on which the trustee became accountable, to each qualified beneficiary at least annually and on termination of the trust or on change of the trustee…

(e) Upon reasonable request, the trustee shall provide a qualified beneficiary with relevant information about the assets and liabilities of the trust and the particulars relating to administration.

In reviewing this statutory section, there are several obligations which are owed by the Trustee to a qualified beneficiary. Paragraphs (a) and (b) require that the Trustee provide notice of specific information to the qualified beneficiaries. This includes notice of the Trust’s existence, the name and address of the Trustee, the right to request a copy of the Trust instrument, the right to accountings, and that the fiduciary lawyer-client privilege in s. 90.5021 applies with respect to the Trustee and any attorney employed by the Trustee.

A qualified beneficiary may request a complete copy of the Trust and the Trustee must provide that to the beneficiary. In our estate practice, we often run into the question of who can request a copy of a Trust. This section makes it clear that a qualified beneficiary may do so.

Under paragraph (d), a qualified beneficiary is entitled to annual and a final accounting. This is an important way in which a Trustee is held accountable to the qualified beneficiaries. The accountings will typically include the starting assets of the Trust (or those from the last accounting), the income received, the expenses paid, and the remaining balance. The specific requirements of the accounting are set forth in Section 736.08135, Fla. Stat.

Paragraph (e) provides a significant extension of the rights to receive an accounting. An accounting provides a summary of transactions involving the Trust. This paragraph provides that, when requested by a qualified beneficiary, the Trustee must provide “relevant information about the assets and liabilities of the trust and the particulars relating to administration.” This could be quite broad and include providing bank statements, cancelled checks, and even tax returns. As a result, this paragraph makes available the supporting documentation from which the accounting is prepared.

Often in the administration of a Trust, disputes arise because a Trustee has not fulfilled the obligations to inform and account. When faced with this situation, a qualified beneficiary often will benefit by retaining an attorney with experience in resolving this type of dispute. Sometimes the matter can be resolved by having the attorney make demand for compliance. If that does not work, then litigation may be necessary to compel compliance or to remove the Trustee..

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