Breach of Fiduciary Duty in Florida Estates

When a person is appointed as a personal representative of an estate or as a trustee of a trust, they take on a fiduciary role that imposes the highest standard of care and loyalty recognized by law. A fiduciary must act in the best interests of the beneficiaries at all times, putting the beneficiaries' interests above their own. When a fiduciary violates these obligations, the result is a breach of fiduciary duty—a serious legal matter that can give rise to personal liability, removal from office, and other significant consequences under Florida law.

At the Law Offices of Albert Goodwin, PA, we represent beneficiaries, heirs, and other interested parties in breach of fiduciary duty claims arising from the administration of Florida estates and trusts. We also represent personal representatives and trustees who have been accused of breaching their fiduciary duties and need a strong defense.

What Is Fiduciary Duty in Florida Estates and Trusts?

A fiduciary duty is a legal obligation to act in the best interest of another person or group of persons. In the context of Florida estates and trusts, fiduciary duties are owed by two primary categories of fiduciaries:

Personal Representatives

A personal representative (sometimes called an executor or administrator) is the individual or institution appointed by the court to administer a decedent's estate during the probate process. Under F.S. § 733.602, a personal representative is a fiduciary who must observe the standards of care applicable to trustees. This means the personal representative must act with the same degree of loyalty, prudence, and care as a trustee.

The personal representative's fiduciary duties include the duty to marshal and protect estate assets, pay valid debts and claims, file required tax returns, provide information to interested persons, and ultimately distribute the estate assets to the rightful beneficiaries in accordance with the decedent's will or Florida's intestacy statutes.

Trustees

A trustee is the individual or institution responsible for managing and administering trust assets for the benefit of the trust beneficiaries. The Florida Trust Code, codified in Chapter 736 of the Florida Statutes, sets forth the specific duties owed by trustees. Key fiduciary duties imposed on trustees under Florida law include:

Duty of loyalty (F.S. § 736.0802) – The trustee must administer the trust solely in the interests of the beneficiaries. Any transaction that involves the trustee's own interests creates a conflict of interest that is presumed to be a breach of the duty of loyalty.
Duty of impartiality (F.S. § 736.0803) – When a trust has two or more beneficiaries, the trustee must act impartially, taking into account the differing interests of the beneficiaries.
Duty of prudent administration (F.S. § 736.0804) – The trustee must administer the trust as a prudent person would, considering the purposes, terms, distributional requirements, and other circumstances of the trust.
Duty regarding investments (F.S. § 736.0901) – The trustee must invest and manage trust assets as a prudent investor would, considering the purposes, terms, distribution requirements, and other circumstances of the trust.
Duty to inform and account (F.S. § 736.0813) – The trustee must keep the beneficiaries reasonably informed about the administration of the trust and provide trust accountings as required.
Duty not to delegate improperly (F.S. § 736.0807) – While a trustee may delegate certain functions, the trustee must exercise reasonable care in selecting and supervising agents.

Types of Breaches of Fiduciary Duty

Breaches of fiduciary duty in Florida estates and trusts take many forms. The following are among the most common types of breaches that give rise to estate litigation and trust litigation:

Self-Dealing

Self-dealing is one of the most egregious forms of fiduciary breach. It occurs when a personal representative or trustee uses their position to benefit themselves at the expense of the estate or trust beneficiaries. Examples of self-dealing include purchasing estate or trust assets for themselves at below-market value, directing business opportunities to their own companies, using estate or trust funds to pay personal expenses, or hiring themselves or their family members for services at inflated rates.

Under Florida law, transactions involving self-dealing are presumed to be a breach of the duty of loyalty. The burden shifts to the fiduciary to prove that the transaction was fair and in the best interests of the beneficiaries. Florida courts take self-dealing extremely seriously, and fiduciaries who engage in self-dealing face surcharge liability, removal, and potential criminal prosecution in cases involving theft or fraud.

Mismanagement of Assets

Fiduciaries have a duty to manage estate and trust assets prudently. Mismanagement occurs when a personal representative or trustee fails to properly invest, maintain, protect, or preserve the assets under their control. Common examples of mismanagement include:

Failing to diversify investments, resulting in concentrated risk
Making speculative or inappropriate investments
Allowing real property to deteriorate through neglect
Failing to collect debts owed to the estate or trust
Holding excessive amounts of cash or non-productive assets
Selling assets at below-market prices without justification
Failing to obtain adequate insurance for estate or trust property

The prudent investor rule, codified in F.S. § 736.0901 for trustees, requires that investments be evaluated not in isolation but in the context of the trust portfolio as a whole and as part of an overall investment strategy. A fiduciary who fails to develop and implement a sound investment strategy may be held liable for any resulting losses.

Failure to Account

Both personal representatives and trustees have a legal obligation to account for their management of estate and trust assets. For personal representatives, F.S. § 733.5036 requires the filing of accountings with the court. For trustees, F.S. § 736.08135 requires the trustee to provide trust accountings to qualified beneficiaries.

A failure to account is itself a breach of fiduciary duty, regardless of whether any other misconduct has occurred. When a fiduciary fails to provide adequate accountings, beneficiaries are left in the dark about the status of the estate or trust assets, making it impossible for them to evaluate whether the fiduciary is properly performing their duties. Courts may compel accountings and may draw adverse inferences against a fiduciary who refuses or fails to account.

Commingling of Funds

A fundamental obligation of any fiduciary is to keep estate or trust assets separate from their personal assets. Commingling occurs when a personal representative or trustee mixes fiduciary funds with their own personal funds or with funds belonging to other estates or trusts. Commingling creates a risk that fiduciary funds will be lost, misappropriated, or become untraceable.

Under F.S. § 736.0810, a trustee has a duty to keep trust property separate from the trustee's own property and to identify trust property clearly. Similarly, personal representatives must maintain estate funds in separate accounts. Commingling is treated as a per se breach of fiduciary duty in Florida, meaning that the beneficiary does not need to prove actual harm—the act of commingling itself constitutes the breach.

Failure to Distribute

A fiduciary's ultimate obligation is to distribute estate or trust assets to the rightful beneficiaries in a timely manner. Unreasonable delay in making distributions is a breach of fiduciary duty. A personal representative who unnecessarily prolongs the probate process or a trustee who withholds distributions that should be made under the terms of the trust instrument may be held liable for the delay.

In the estate context, F.S. § 733.901 provides that the personal representative must distribute the estate as promptly as is consistent with the best interests of the estate. Beneficiaries who believe that distributions are being unreasonably delayed may petition the court for relief.

Failure to Inform Beneficiaries

Fiduciaries have a duty to keep beneficiaries reasonably informed about the administration of the estate or trust. This includes providing notice of significant events, responding to reasonable requests for information, and being transparent about the fiduciary's actions and decisions. A fiduciary who stonewalls beneficiaries, ignores their inquiries, or deliberately withholds information is breaching their fiduciary duty.

Favoritism Among Beneficiaries

When an estate or trust has multiple beneficiaries, the fiduciary must act impartially. A personal representative or trustee who favors one beneficiary over another—for example, by making early distributions to one beneficiary while withholding distributions from another, or by managing assets in a way that benefits current beneficiaries at the expense of remainder beneficiaries—is breaching the duty of impartiality.

Remedies for Breach of Fiduciary Duty in Florida

Florida law provides robust remedies for beneficiaries who have been harmed by a fiduciary's breach of duty. The available remedies depend on the nature and severity of the breach, as well as the specific circumstances of the case.

Surcharge

Surcharge is the primary monetary remedy for breach of fiduciary duty. When a court determines that a fiduciary has breached their duty, the court may order the fiduciary to pay from their own personal funds an amount sufficient to restore the estate or trust to the position it would have been in had the breach not occurred. Under F.S. § 736.1002, a trustee who commits a breach of trust is liable for the greater of the amount required to restore the trust property and trust distributions to what they would have been had the breach not occurred, or the profit the trustee made by reason of the breach.

Surcharge can be substantial, particularly in cases involving significant losses or profits gained through self-dealing. The fiduciary is personally liable for the surcharge amount, meaning that their own assets are at risk.

Removal of the Fiduciary

Removal is one of the most powerful remedies available in breach of fiduciary duty cases. For personal representatives, F.S. § 733.504 provides the grounds for removal, including breach of fiduciary duty, failure to perform duties, and other conduct demonstrating unfitness. For trustees, F.S. § 736.0706 provides for removal upon grounds including serious breach of trust, unfitness, and persistent failure to administer the trust effectively.

When a fiduciary is removed, the court will appoint a successor personal representative or trustee to take over the administration of the estate or trust. The removed fiduciary must account for their administration and turn over all estate or trust assets to the successor.

Compensatory Damages

In addition to surcharge, beneficiaries may be entitled to compensatory damages for losses caused by the fiduciary's breach. This may include lost income, diminished asset values, and other quantifiable losses that resulted from the fiduciary's misconduct.

Disgorgement of Fees and Profits

A fiduciary who breaches their duty may be required to disgorge any fees or compensation they received during the period of breach. Additionally, any profits the fiduciary earned through the breach must be returned to the estate or trust. Florida courts have broad discretion to reduce or eliminate a fiduciary's compensation when the fiduciary has failed to properly perform their duties.

Attorneys' Fees and Costs

In many breach of fiduciary duty cases, the court may award attorneys' fees and costs to the prevailing party. Under Florida law, the court has discretion to award fees from the estate or trust, or to charge fees directly to the breaching fiduciary personally. This serves as both a remedy for the aggrieved beneficiary and a deterrent against fiduciary misconduct.

Injunctive Relief

In urgent situations, beneficiaries may seek injunctive relief to prevent ongoing or imminent harm. A court may issue an injunction ordering the fiduciary to take specific actions (such as providing an accounting) or to refrain from specific conduct (such as selling assets or making distributions pending resolution of the dispute).

Constructive Trust and Tracing

When a fiduciary has misappropriated estate or trust assets, the court may impose a constructive trust on assets acquired with the misappropriated funds. This equitable remedy allows beneficiaries to trace and recover assets that rightfully belong to the estate or trust, even if those assets have been transferred to third parties.

Relevant Florida Statutes

The following Florida statutes are particularly relevant to breach of fiduciary duty claims in estate and trust matters:

F.S. § 733.602 – General duties of a personal representative
F.S. § 733.504 – Removal of personal representative
F.S. § 733.609 – Improper exercise of power by personal representative
F.S. § 733.5036 – Accounting and disclosure requirements for personal representatives
F.S. § 736.0801 – Duty to administer trust
F.S. § 736.0802 – Duty of loyalty
F.S. § 736.0803 – Impartiality
F.S. § 736.0804 – Prudent administration
F.S. § 736.0810 – Recordkeeping and identification of trust property
F.S. § 736.0901 – Prudent investor rule
F.S. § 736.1001 – Remedies for breach of trust
F.S. § 736.1002 – Damages for breach of trust

How to Protect Your Rights

If you suspect that a personal representative or trustee is breaching their fiduciary duty, it is important to take action promptly. Florida law imposes statutes of limitations on breach of fiduciary duty claims, and delay can result in the loss of your right to seek relief. Additionally, the longer a breach continues unchecked, the greater the potential harm to the estate or trust and its beneficiaries.

Steps you can take to protect your rights include:

Requesting a formal accounting from the personal representative or trustee
Reviewing all accountings and financial records carefully for discrepancies
Consulting with an experienced estate litigation attorney to evaluate your options
Filing a petition with the court if the fiduciary refuses to provide information or account for their administration
Seeking emergency injunctive relief if assets are at immediate risk of being dissipated or misappropriated

Contact a Florida Breach of Fiduciary Duty Attorney

At the Law Offices of Albert Goodwin, PA, we understand the serious harm that can result when a personal representative or trustee breaches their fiduciary duty. We are committed to holding fiduciaries accountable and protecting the rights of beneficiaries throughout Florida.

Whether you need to bring a breach of fiduciary duty claim or defend against one, we have the knowledge and experience to guide you through the legal process and fight for the best possible outcome.

Call us at 786-522-1411 or email us at [email protected] to schedule a consultation. Do not let a fiduciary's misconduct go unchallenged—contact us today to discuss your legal options.