The Role and Duties of a Trustee in Estate Planning

Deciding how to plan, organize and designate the method used to pass your estate on to family and/or friends after your death is an extremely important decision that will have repercussions long after you are gone. One fairly common estate planning tool is the trust. The purpose of a trust is to create a legal relationship that involves a person (the settlor) transferring property to someone else to hold for the beneficiaries until some designated future time. The person who holds the property of the trust creator or settlor is the trustee. The settlor puts a lot of faith and reliance in the trustee to follow the directives listed in the trust instrument, and this large amount of dependence is bolstered by laws that set out the duties and obligations of all trustees to lessen the likelihood that the trustee would keep the settlor’s property for him/herself. With this large obligation also comes the right of the trustee to be compensated for his/her time and efforts. While this remuneration typically does not amount to large sums of money, trustees in charge of especially large trusts can earn higher amounts. A Florida appellate court recently addressed which method should be used to calculate a trustee’s fee – a percentage of the value of the estate or an amount based on the time, amount and quality of the work performed. The appellate court upheld the trial court’s decision to use the trustee’s time and efforts as the basis for determining an appropriate fee.

General Duties

Once a person accepts a position as a trustee, he/she assumes a legal duty to administer the trust in good faith and in accordance with the terms of the trust and Florida law. Further, the trustee must manage the trust in the interest of the beneficiaries, and if a conflict is found between the actions of the trustee and the interests of the beneficiaries, affected transactions could be voidable – essentially, undone. Additionally, the trustee must apply prudence when administering the trust, which means using reasonable care, skill and caution when making decisions. In order to effectively manage the trust, the trustee must make efforts to collect and control all properties named in the trust and provide a list of the trust’s assets and liabilities if requested by a beneficiary. Finally, the trustee must distribute the property in the trust, or any income derived from the property, to beneficiaries as directed in the trust instrument.

Powers and Authority

Florida law also grants a trustee a number of powers to allow for the effective operation of the trust. The list of trustee powers is quite extensive, but includes the power to:

• buy or sell property;
• deposit trust money with a financial institution; e., bank, investment house, insurance company;
• borrow money and mortgage trust property;
• exercise rights in stocks or other kinds of securities as if they were the owner;
• enter into a lease;
• abandon or decline to administer trust property with little or no value; and
• decide how to allocate expenses and income to the trust principal.

Consult an Estate Law Attorney

If you are contemplating executing a will or creating a trust to provide for your family after death, working with an estate planning lawyer will help to ensure you create a valid estate plan that will be easy for your family to administer. The Tampa law firm of Bubley & Bubley, P.A. offers representation on a variety of legal services related to estate planning. Contact us to schedule a confidential consultation.