Are you ready to be a trustee or a personal
representative? I’m attorney Reed Bloodworth, the managing
partner of Bloodworth Law in Orlando. I handle trust and probate disputes throughout
Florida. I represent trustees, personal representatives,
and I also handle disputes for beneficiaries. Today I’ll explain what you’ll be asked
do so you’ll know what’s expected and can try to avoid common legal problems and
lawsuits. The role of a trustee or personal representative
can be confusing. The goal is to not let dates and details fall
through the cracks. You don’t want a beneficiary accusing you
of breach of fiduciary duty, or accounting action mishaps. First, Let’s explain what a trust is. A trust is a legal arrangement created to
hold property and assets for another party or parties who are called beneficiaries. Beneficiaries are the individuals or entities
specifically named in the trust document to receive the trust’s property and assets. Your job as a trustee is to be a corporate
or individual manager of the trust. The trust is created for beneficiaries named
by the trust’s creator, and often has the benefit of lowering or avoiding taxes upon
the trust creator’s death. According to the Florida Statutes, a trustee
has the duty to administer the trust in good faith, in accordance with its terms and for
the purposes and the interests of the beneficiaries, and in accordance with the laws of Florida: Here are the basic rules and roles for a trustee: 1. You have to administer the trust solely in
the interest of the beneficiaries 2. You have to exercise a reasonable care, skill,
and caution in administering the trust 3. You have to only incur expenses that are reasonable
in relation to the trust property, the purposes of the trust, and the skills of the trustee
4. You must take reasonable steps to take control
and protect the trust property 5. You must keep accurate records which include:
a. Reporting to the beneficiaries as the trust
requires and required by Florida Statutes, and
b. Potentially preparing and filing tax returns
6. You can’t mix trust assets with the assets
of the trust 7. Trust assets must be invested in a way that
results in reasonable growth and minimal risk; 8. You must keep separate checking accounts and
investment accounts; and 9. You can’t use the trust assets for your
own benefit If you are an individual trustee, it is highly
advisable to hire an attorney, an accountant, or financial advisor to help you manage the
trust appropriately. If any disputes or potential disputes arise,
you should consult with a trust litigation attorney immediately. The other position you may be asked to handle
is that of a personal representative in a probate estate. A probate estate arises when someone dies
in Florida and either left a will to address how they wanted their possessions to be divided
among beneficiaries, or they died without a will and the probate estate is disbursed
pursuant to Florida’s intestacy statute. A probate estate consists of anything the
person owned at the time of their death, including real estate, vehicles, heirlooms, savings
accounts, investments, any other assets. As a personal representative you must: • Serve Notice of Administration on the
decedent’s surviving spouse, beneficiaries, a trustee, if that’s applicable, and the
beneficiaries of the trust, again if that is applicable
• You must take possession of all of the estate’s assets
• Furnish an inventory of the estate’s assets to the beneficiaries
• You must provide an accounting • Determine creditors and put them on notice
of the probate estate • You must pay the appropriate debts and
expenses of the estate • You must prepare the estate tax return
and pay any owed estate taxes • And then, distribute the assets of the
estate pursuant to the terms of the will, or if there is no will, pursuant to Florida
Statutes; and then, • Close the estate As is the case with a trustee, a personal
representative is a fiduciary and shall observe the same standard of care applicable to a
trustee. So, as you’ve learned here today, there
are a lot of legal and financial responsibilities associated with the positions of acting as
a trustee or personal representative. Be sure that you’re prepared for these roles. One of the ways that you can ensure you are
executing your duties properly is to work with a trust or probate attorney with whom
you’re comfortable. Should you fail to perform these duties, beneficiaries
can take legal action against you. Sometimes, when several generations, stepfamilies,
siblings, or friends are involved in a trust or a probate estate, you may feel a lot of
pressure and it can be made more difficult by jealous or disappointed beneficiaries. Don’t figure these things out or answer
these legal questions on your own. Seek the representation of an attorney. If you are experiencing difficulties in fulfilling
your duties as a trustee or personal representative, or are facing potential lawsuits related to
your role as a trustee or personal representative, give me a call. Let’s talk about how Bloodworth Law can
help.