What Is a Trustee in Florida?

A trustee is the person or entity responsible for holding, managing, and distributing the assets of a trust for the benefit of the trust's beneficiaries. The trustee is a fiduciary, meaning they are legally obligated to act in the best interests of the beneficiaries and in accordance with the terms of the trust document. In Florida, the duties and powers of trustees are governed by the Florida Trust Code, found in Chapter 736 of the Florida Statutes. At the Law Offices of Albert Goodwin, PA, we advise trustees on their obligations and represent beneficiaries when trustee conduct is in question.

Fiduciary Duties of a Trustee in Florida

The trustee's fiduciary duties are the core of the role. Florida law imposes several specific obligations:

Duty of Loyalty

Under Florida Statutes Section 736.0802, the trustee must administer the trust solely in the interest of the beneficiaries. The trustee cannot engage in self-dealing or place their own interests above those of the people the trust is designed to benefit. Any transaction in which the trustee has a personal interest is presumptively a breach of the duty of loyalty, and the trustee bears the burden of proving the transaction was fair.

Duty of Impartiality

When a trust has multiple beneficiaries — for example, a current income beneficiary and remainder beneficiaries — the trustee must act impartially, giving due regard to each beneficiary's interests. Under Florida Statutes Section 736.0803, the trustee must balance the needs of current beneficiaries against those of future beneficiaries, ensuring that investment and distribution decisions do not unfairly favor one group over another.

Duty of Prudent Administration

Florida Statutes Section 736.0804 requires the trustee to administer the trust as a prudent person would, considering the purposes, terms, distribution requirements, and other circumstances of the trust. This standard applies to all aspects of trust management, from day-to-day decisions to major transactions.

Duty to Invest Prudently

Under the Florida Prudent Investor Act (Florida Statutes Section 518.11), the trustee must invest and manage trust assets as a prudent investor would, considering the purposes, terms, and distribution requirements of the trust, as well as general economic conditions. The trustee must diversify investments unless the trustee reasonably determines that it is in the interests of the beneficiaries not to diversify, taking into account the purposes and circumstances of the trust.

Duty to Keep Adequate Records and Inform Beneficiaries

The trustee must maintain clear and accurate records of all trust transactions. Under Florida Statutes Section 736.0813, the trustee has a duty to keep qualified beneficiaries reasonably informed about the trust administration and to provide accountings and other relevant information upon request. Qualified beneficiaries are also entitled to receive a copy of the trust instrument and annual trust accountings.

Duty Not to Delegate Improperly

While a trustee may delegate certain functions to agents and professionals — such as investment advisors, accountants, or attorneys — the trustee retains ultimate responsibility for the trust. Under Florida Statutes Section 736.0807, the trustee must exercise reasonable care in selecting agents and must periodically review their actions.

Who Can Serve as a Trustee in Florida?

Florida law is more flexible about who can serve as a trustee than about who can serve as a personal representative in probate. There is no requirement that the trustee be a Florida resident. The grantor may name any competent adult individual, a bank, a trust company, or another qualified entity.

Individual Trustees

An individual trustee is typically a family member, close friend, or other person the grantor trusts to manage the trust responsibly. Common choices include a surviving spouse, an adult child, a sibling, or a trusted advisor. The advantages of naming an individual trustee include:

• Personal knowledge of the family dynamics, values, and needs
• Often willing to serve at no cost or reduced cost
• Direct personal relationship with the beneficiaries

However, individual trustees may lack the financial or legal expertise to manage complex trust portfolios. They may also face conflicts of interest, particularly when the trustee is also a beneficiary. Additionally, an individual trustee may become incapacitated, unavailable, or unwilling to continue serving.

Corporate Trustees

A corporate trustee is a bank, trust company, or other financial institution that provides professional trust management services. The advantages of a corporate trustee include:

• Professional investment management and access to institutional investment products
• Expertise in trust accounting, tax compliance, and fiduciary obligations
• Continuity — a corporate trustee does not die, become incapacitated, or move away
• Impartiality in dealing with multiple beneficiaries

The disadvantages include higher fees (often charged as a percentage of trust assets, typically between 0.5% and 1.5% annually), less personal attention than an individual trustee might provide, and less flexibility in making distribution decisions. Some families combine both approaches by naming co-trustees — an individual who knows the family alongside a corporate trustee that handles investments and administration.

Trustee Compensation in Florida

Under Florida Statutes Section 736.0708, a trustee is entitled to compensation that is reasonable under the circumstances. If the trust document specifies the trustee's compensation, that provision generally controls. If the trust is silent on compensation, the trustee is entitled to reasonable compensation. What is "reasonable" depends on factors including:

• The size and complexity of the trust estate
• The trustee's skill, experience, and expertise
• The time devoted to trust administration
• The results achieved in managing trust investments
• Fees customarily charged in the community for similar services

Corporate trustees typically charge fees based on a percentage of assets under management, while individual trustees may charge an hourly rate, a flat fee, or a percentage of assets. Trustees who serve without charging a fee — often family members — may later petition the court for compensation if they find the role more demanding than anticipated.

Removal of a Trustee in Florida

Beneficiaries or other interested persons may petition the court to remove a trustee under Florida Statutes Section 736.0706. Grounds for removal include:

• Serious breach of fiduciary duty
• Failure to administer the trust effectively due to lack of cooperation among co-trustees
• Unfitness, unwillingness, or persistent failure to administer the trust
• A substantial change in circumstances where removal serves the interests of the beneficiaries

The court will not remove a trustee simply because a beneficiary disagrees with the trustee's investment decisions or distribution choices, as long as those decisions fall within the trustee's discretion and do not violate fiduciary duties. However, when a trustee's conduct rises to the level of mismanagement, self-dealing, or neglect, removal is appropriate and the court may also order the trustee to pay damages to the trust.

Successor Trustees

Most well-drafted trust documents name one or more successor trustees who step in if the original trustee dies, becomes incapacitated, resigns, or is removed. The successor trustee assumes all the powers and duties of the original trustee. If the trust document does not name a successor, or if all named successors are unable or unwilling to serve, the court may appoint a successor trustee under Florida Statutes Section 736.0704.

When a successor trustee takes over, they should conduct a thorough review of the trust's assets, records, and prior transactions. The successor trustee is not generally liable for the actions or omissions of a predecessor trustee, but they do have a duty to take reasonable steps to remedy any breaches they discover.

Trustee vs. Personal Representative

While both a trustee and a personal representative are fiduciaries who manage assets for beneficiaries, there are important differences. A personal representative is appointed by the probate court and administers a decedent's estate under court supervision. A trustee is appointed by the trust document and manages trust assets generally without ongoing court oversight. Trust administration is typically faster, more private, and less expensive than probate, which is one reason many Florida residents include a trust in their estate plan.

Contact a Florida Trust Attorney

Whether you have been named as a trustee and need guidance on your duties, you are a beneficiary concerned about how a trustee is managing trust assets, or you are creating a trust and need help selecting the right trustee structure, the Law Offices of Albert Goodwin, PA can help. We represent trustees and beneficiaries throughout Miami-Dade County, Broward County, and Palm Beach County. Call us at 786-522-1411 or email [email protected] to schedule a consultation at our Coral Gables office.