The mistakes Florida successor trustees make, and the duty each one breaches

Distributing before the debts, expenses and taxes are known

The most expensive mistake is also the most sympathetic: a beneficiary needs money, the trust has it, and the trustee sends it. Section 736.0817 has the trustee distribute expeditiously when the trust terminates, subject to a reasonable reserve for debts, expenses and taxes — and the reserve is the point. Claims against the decedent can be brought for two years after death (§733.710), the probate estate can certify to the trustee amounts the trust must pay when the estate cannot (§736.05053), and the trust's own income tax and the federal estate tax return, where one is due, come later still. A trustee who has already distributed everything answers those demands personally.

The cure is a written reserve calculation kept in the file, and partial distributions only when what remains clearly covers what could still arrive.

Mixing trust money with personal money

Section 736.0810 requires the trustee to keep trust property separate from the trustee's own and to keep clear, distinct and accurate records. Paying a trust bill from a personal card and reimbursing later, or parking a trust check in a personal account for a week, breaks both. The accounting the beneficiaries will receive under §736.08135 cannot be reconstructed from a mixed account, and a court reads commingling as the first symptom of worse.

One trust account under the trust's own employer identification number, opened as soon as the trust becomes irrevocable, is the whole cure.

Missing the 60-day notices

Section 736.0813 gives the trustee 60 days after accepting the trusteeship, and 60 days after learning the trust has become irrevocable, to send the qualified beneficiaries the notices the section names. Trustees miss them because the trigger dates were never written down, because they did not know who the qualified beneficiaries were (§736.0103), or because they thought the notice of trust filed with the court (§736.05055) covered it. It does not. The notices are the beneficiaries' first sight of the trustee, and a late or absent notice colors everything after it.

Acting before deciding to accept

Under §736.0701 a person named as trustee accepts by exercising powers or performing duties, not only by signing an acceptance. A trustee who begins paying bills and moving accounts has accepted, with every duty that follows, whether or not the trusteeship was wanted. Reading the instrument first, and sending a rejection within a reasonable time if the answer is no, is the statute's design.

Dealing with the trust for personal advantage

The duty of loyalty (§736.0802) makes a transaction between the trustee personally and the trust voidable unless the terms, the court, the beneficiaries or the section allow it. Buying the house from the trust at a friendly price, lending trust money to one's own business, hiring one's spouse at a premium — each is the same mistake. A trustee who is also a beneficiary has a second trap: discretionary distributions to oneself are limited to an ascertainable standard unless the trust says otherwise (§736.0814(2)).

When a transaction with the trustee is genuinely in the beneficiaries' interest, the cure is the beneficiaries' informed written consent or a court's approval before the fact, not an explanation afterward.

Taking compensation without a rate, a record, or a disclosure

A trustee is entitled to reasonable compensation when the trust is silent (§736.0708) and to reimbursement of expenses properly incurred (§736.0709). The mistake is not being paid; it is being paid invisibly. Compensation taken without a stated rate, without time kept, and without a line in the accounting is the item a beneficiary's lawyer reads first. Set the rate in advance, keep the time, disclose the amount.

Selling or distributing the homestead too soon

If the decedent's home was Florida homestead and a spouse or minor child survives, §732.401 and §732.4015 decide who takes it, and the trust's distribution scheme does not override them. A trustee who sells the house in month two, or deeds it to the beneficiaries the trust names, before the homestead question has been determined has made a transfer that may not have been the trustee's to make.

Keeping no record, or keeping it only in memory

Every duty above ends in the same place: the accounting (§736.08135), the beneficiaries' questions, and, rarely, a court. A trustee whose file holds the trust, the asset list with titles, the values, the receipts, the notices with proof of delivery, and a log of decisions with their reasons has already answered most of what could be asked. A trustee whose file is a memory has not.

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