Estate Planning and Tax Lawyer Blog

Just like being a Personal Representative in Florida, being a Trustee of a Florida trust has certain duties that come with the job. Florida Statutes 736.0801 – 736.0817 describes all the different duties and powers of a Florida Trustee. The overall theme of the rules is to administer the trust in the best interest of the beneficiaries.

The general rule when describing the powers of a Trustee, the Trustee shall have all powers over the trust property that a competent person has over their individually owned property and any other powers to achieve the proper investment, management and distribution of trust property.

Other powers a Trustee may exercise are:
1. Collect trust property;
2. Accept or reject trust property;
3. Acquire or sell property at a public or private sale;
4. Exchange, divide or otherwise change the character of trust property;
5. Deposit trust money into accounts;
6. Borrow money or mortgage trust property;
7. If the trust owns a business, take any actions that a business owner may take;
8. Vote or give proxies with stock;
9. Construct additions on or repairs to real property;
10. Enter into a lease as either lessor or lessee;
11. Insure trust property;
12. Abandon trust property that has no value;
13. Pay or contest a claim against a trust;
14. Pay any taxes on trust property;
15. Make tax elections for trust property;
16. Make loans from trust property (be careful with this one and self-dealing);
17. Employ persons in regards to trust property (such as attorneys, CPA, etc);
18. Sign contracts for the trust; and
19. Upon termination of the trust, wind up the trust and distribute trust property according to the terms of the trust.

That list is not a complete list but only an example of commonly used powers. Depending on the assets within the trust, the Trustee may exercise other powers.

As stated above, the general duty of the Trustee is to administer the trust in good faith, in accordance with the terms and purposes of the trust and in the interest of the beneficiaries. The most difficult duty for a Trustee to fulfill may be the duty of loyalty as is laid out in 736.0802. The duty of loyalty is to administer the trust in the best interest of the beneficiaries. Some beneficiaries may need income from the trust to supplement their current needs while other beneficiaries may need the increase the principal so they can use the income as they grow older. That can sometimes be a struggle but the Trustee must balance the interests of both beneficiaries and try and be impartial to each of the beneficiaries respective interests in the trust.

The Trustee must administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements and other circumstances of the trust by exercising reasonable care, skill and caution. If the Trustee has special skills, the Trustee must use those skills in administering the trust. Such skills might include being an attorney, being a financial advisor or a CPA.

This can be a double-edged sword. The increased skill can allow the Trustee to receive additional compensation. With additional skills though, come additional duties and a higher standard to administer the trust by. For instance, if the Trustee is a financial advisor, the Trustee will be held to a higher standard in regards to their investment decisions and also will have to pay attention to their duty of loyalty to make sure their investment decisions are in the best interest of the beneficiaries and not motivated by receiving commissions.