21 November 2022
Although trustees have a mandatory duty to account to qualifiedbeneficiariesunder Florida’s Trust Code, beneficiaries are permitted to waive this requirement if they wish to do so.
In Florida, trustees are generally required to provide trust accountings to each qualified beneficiary at least annually. See FL Stat. § 736.0813(1)(d) Generally, trustees and theirTrust Administration Attorneysappreciate this particular section of Florida’s Trust Code because it allows them to compile a report that not only answers many questions posed by beneficiaries but also complies with Florida law and any and all disclosure requirements imposed thereunder. The purpose of this law is to provide beneficiaries with full disclosure of the transactions that occurred during the administration of the trust and provide them with an opportunity to raise any questions or objections they may have relating thereto.
But what happens when you’re a beneficiary and you don’t have any questions as to how the trustee is administering the trust? Or you’d like to know what transactions occurred, but you’d like to save the expense associated with having a fiduciary accounting prepared by a qualified Estate Tax Planning Attorney (which can range from $2,000.00- $10,000.00+)? From a practical standpoint, we hear of many instances where a beneficiary of a trust may wish to waive his or her right to a formal accounting.
Generally, an “informal” accounting can be prepared in-house which discloses the same information as a formal fiduciary accounting, namely all transactions that occurred during the administration of the trust, along with administrative expenses, professional fees and costs, anticipated tax liability and the like. This is provided to beneficiaries who are then given the opportunity to waive the “formal” fiduciary accounting and allow the trustee to proceed with distributions as disclosed on the informal accounting.
It is important to understand that any such waiver is entirely permissive, as beneficiaries are legally entitled to accountings under Florida’s Trust Code. In order to be valid, any waiver of accounting must be in writing. Waivers may be later withdrawn in writing, although any such withdrawal of a prior waiver is effective only with respect to accounting for future periods. See FL Stat. § 736.0813(2).
Serving in the role of trustee can be incredibly challenging and complex, especially for an individual grieving the loss of a loved one or navigating difficult family dynamics. There are several duties and obligations that must be undertaken, and failing to do so could open the trustee up to personal financial liability. Under the terms of most trust agreements, trustees are entitled to hire attorneys to assist with their Trust Administration, and the legal fees are paid for out of the trust assets, not the trustee’s personal account. Here at e-Estates and Trusts, PLLC, we have years of experience guiding trustees through the administration process. Don’t go it alone… we welcome you to schedule a consultation with one of our experienced probate and trust administration attorneys.
Disclosure: The information contained in this website and blog is of a general nature and is not intended in any way to answer individual legal questions. If you have a legal question concerning your individual circumstances, please contact our firm to schedule a conference with one of our experienced attorneys. Your review of information from this website or blog does not create an attorney-client relationship, nor any legal privileges relating thereto.
Disclosure: The information contained in this website and blog is of a general nature and is not intended in any way to answer individual legal questions. If you have a legal question concerning your individual circumstances, please contact our firm to schedule a conference with one of our experienced attorneys. Your review of information from this website or blog does not create an attorney-client relationship, nor any legal privileges relating thereto. Offices in Ocala and Sebring.