In recent years, trusts have become increasingly popular as an estate planning tool. Trusts keep assets out of probate, and have other advantages as well. The creator (grantor) of a revocable living trust can use and enjoy trust assets during their lifetime; if the grantor becomes legally incapacitated or dies, a successor trustee steps into their shoes and administers the trust. A trustee of an irrevocable trust is also required to administer the trust upon being appointed.

In one sense, the process is seamless: the trustee has automatic authority, granted by the trust document, to administer the trust after the grantor’s death or upon appointment. No court involvement is required. Unfortunately, if the trustee is not familiar with their duties, they may find their new obligations overwhelming.

Selecting a trustee or successor trustee to administer a trust is a decision that should never be undertaken lightly. Unlike probate administration, which takes place under the supervision of the probate court, there is no court oversight of the trust administration process. Therefore, it is especially important to choose someone competent and trustworthy for this role.

A trustee is a fiduciary: someone who is obligated to act in the best interests of another person or persons. Here, those persons are the beneficiaries of the trust. A trustee who fails to properly carry out their duties, even innocently, may face legal consequences, including personal liability. Fortunately, guidance is available for trustees who need help administering a trust.

Duties of a Trustee or Successor Trustee in Florida

If you have been chosen to administer a trust as a trustee or successor trustee, you know that it is both an honor and a great obligation. Especially if you have never served in that capacity before, you likely have many questions about executing your duties.

The Law Office of Nicole K. Shafran works with both individual and institutional trustees to ensure that they understand their obligations under the trust document and have the necessary support to carry them out. Duties of a trustee or successor trustee in Florida include:

• Obtaining a Taxpayer Identification Number (TIN) for the trust
• Gathering contact information for beneficiaries, fiduciaries, and advisors
• Providing all required notices to beneficiaries of the trust
• Identifying, securing, valuing, and managing trust assets, including insuring assets if necessary
• Analyzing asset information to determine whether valuations or appraisals are needed; obtaining and reviewing prior valuations or appraisals for consistency of the valuation methodology and any discounts
• Filing income tax and other tax returns on behalf of the trust and ensuring that all taxes are timely paid
• Filing Notice of Trust with the probate court
• Paying legitimate creditors of the decedent from trust funds
• Investing trust assets as a prudent investor would
• Treating beneficiaries fairly and impartially
• Distributing trust income and assets to beneficiaries in accordance with the terms of the trust document
• Winding down the trust when its purposes have been fulfilled

The complexity of trust administration depends on the type of trust, the number of trustees, and the assets contained in the trust. However, administration of even a relatively straightforward trust can be full of pitfalls for an unwary trustee or successor trustee. For example, a trustee might make a payment to a creditor who was not entitled to that payment, depriving beneficiaries of trust assets that were rightfully theirs. Or a trustee might prematurely distribute trust assets to beneficiaries when a legitimate creditor’s claim should take priority.

Because a trustee’s action (or inaction) affects the legal rights of multiple parties, a trustee should have the help of an experienced trust administration attorney. An attorney’s services are considered a benefit to the trust, and the attorney’s reasonable fees are usually paid out of trust assets, not the trustee’s personal funds. Among other services, a trustee can assist with tax preparations and filings to minimize the risk of an audit.

Work With an Experienced Trust Administration Attorney

Attorney Nicole K. Shafran has a Master of Laws (LLM) in Taxation, along with years of experience in trust administration. This background, together with years of employment in the private wealth department of a multinational professional services corporation, makes Nicole uniquely well-positioned to advise Florida trustees.

Nicole will review the trust document with you and answer any questions you may have about the terms of the trust. She will continue to work with you throughout the trust administration process to ensure that you are able to fulfill your duties under the trust document, as well as comply with applicable local, Florida, and federal laws.

Contact the Law Office of Nicole K. Shafran to schedule a consultation to get the assistance you need to carry out this important responsibility with confidence.