Comprehensive Trust Administration Services in Daytona Beach

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Trusts offer many advantages, both during the grantor’s lifetime and as an estate planning tool. However, one aspect that is often overlooked is the responsibility placed on the trustee. When a grantor who has been serving as trustee during his lifetime passes away, the duties may be daunting and confusing to the newly appointed trustee.

Discover How Our Trust Administration Lawyer in Daytona Beach Can Assist You by contacting us online or calling (386) 272-7445 today!

Understanding Different Trusts in Florida

Florida residents may use many different types of trusts to protect and manage property during their lifetimes and to pass property upon or after their deaths. The most common type of trust employed in estate planning is known as a living trust. The grantor places his property into the trust and, during his lifetime, serves as both trustee and beneficiary, using the property as he chooses. When he dies, successor trustees and beneficiaries are appointed, and the beneficial use of the property passes to those the grantor has selected.

Some other Florida trusts include:

• Charitable Remainder Trust: A charitable remainder trust may be created during the grantor’s lifetime or may be created by the grantor’s will. This type of trust has significant tax benefits. A charitable remainder trust pays out either a flat amount or percentage of the trust assets to the beneficiary at intervals over a period of up to 20 years. When the beneficiary passes away or the pre-determined period expires, the remainder of the trust assets are transferred to a designated charity.
• Charitable Lead Trust: A charitable lead trust operates similarly to a charitable remainder trust, except that the payouts are reversed. The trust makes periodic payments to a designated charity over a pre-determined number of years, then the remaining balance of the trust is paid out to non-charitable beneficiaries such as the grantor’s descendants. This type of trust also offers significant tax advantages.
• Domestic Asset Protection Trust: This type of trust is designed to secure assets from creditors. Although Florida law generally will not allow a grantor to retain a beneficial interest in a trust and still enjoy protection from creditors, this type of trust can be used to great advantage in a situation where leaving a direct inheritance to a child, grandchild or other loved one would be likely to result in seizure of the asset by the beneficiary’s creditors.
• Grantor Retained Annuity Trust: This type of trust allows the grantor to receive regular distributions over a period of years, after which the remaining trust assets are transferred to a designated beneficiary. One key advantage of this type of trust is that the assets are valued at a discount for federal gift tax purposes.
• Qualified Domestic Trust: The primary function of a qualified domestic trust is to allow a non-citizen surviving spouse to enjoy the same opportunity to defer estate taxes until his or her death that is available to surviving spouses who are U.S. citizens.

Key Responsibilities of a Trustee in Florida

Although the exact responsibilities of a Florida trustee will vary depending on the type of trust and the terms of the trust, every trustee has certain obligations. Some, such as the requirement that a successor trustee appointed as a result of the death of the grantor must file a Notice of Trust in the appropriate court, are simple but technical. Others, such as the obligation to identify creditors and to manage trust assets responsibly for the good of the beneficiaries, can be complicated.

The trustee plays a fiduciary role, which means that he or she can be responsible to the beneficiaries of the trust if the assets are not managed properly. It is often in the best interests of the trustee to retain the services of an experienced trust administration attorney.

What Happens if a Trustee Fails to Perform Their Duties

When a trustee fails to perform their duties as outlined in a trust document, the beneficiaries or the trust itself may face significant risks. Trustees are legally obligated to act in the best interests of the beneficiaries, manage trust assets responsibly, and adhere to the terms specified by the grantor. If a trustee neglects these responsibilities, they may be removed from their position by the court, and in some cases, held personally liable for losses or damages resulting from their actions or inactions.

Common examples of trustee misconduct include failing to properly manage or invest trust assets, neglecting to communicate with beneficiaries, or using trust assets for personal gain. Such breaches of fiduciary duty can lead beneficiaries to take legal action, which may involve seeking restitution for any financial harm caused or requesting the appointment of a replacement trustee. Trustees who mismanage funds or assets might be required to repay losses out of their personal assets.

It’s crucial for beneficiaries to understand their rights if they suspect a trustee is not fulfilling their duties. Courts prioritize the protection of beneficiaries and the intentions of the trust, so swift action can prevent further loss. Legal guidance can be beneficial in helping beneficiaries navigate the complex process of trustee removal or claims for damages, ensuring the trust is properly managed and the grantor’s wishes are respected.

Guidance for Trustees: Consult with a Daytona Beach Attorney

Avoid unnecessary stress and prevent costly mistakes by getting the guidance you need from the beginning. Fill out the form at the bottom of this page or call Upchurch Law today at (386) 272-7445 to talk to a Florida probate attorney and learn more about how we can help you manage your responsibilities as trustee.

Get in Touch with Our Trust Administration Team in Daytona Beach or call (386) 272-7445 for Expert Assistance!