Florida Estate Planning Lawyer Blog
Every trustee of a Florida Trust may have a fundamental duty to keep the trust’s beneficiaries informed of the administration of the trust. Florida Statute Section 763.0813 provides that a trustee must keep the qualified beneficiaries of the trust “reasonably informed of the trust and its administration.”
The statutes do provide a few examples of what a trustee must do, such as providing the qualified beneficiary with the trustee’s contact information, notice of the establishment of an irrevocable trust, notice of the right to receive a copy of the trust document, and a notice of the right to receive accountings.
Note, there are ways in Florida to avoid having to provide many of the details to beneficiaries, but you must specify them in advance.
Who is a Qualified Beneficiary in Florida
Many of our Florida clients are surprised to learn that the term “qualified beneficiary” does not mean what a client would assume. A qualified beneficiary not only includes beneficiaries who are eligible to receive a distribution from an irrevocable trust but also includes the first-in-line remainder beneficiaries.
This is a significant requirement because some other states may permit a settlor, the person that creates the trust, to withhold information from certain beneficiaries. The settlor may wish to withhold information for one reason or another, and certain states will allow the settlor to do so for a certain period without providing an alternate recipient if the settlor includes this provision in the trust instrument. However, Florida is not one of these states, and the settlor cannot dictate that only certain beneficiaries can receive administrative information in the trust document.
Representation by a Designated Representative
One way for a beneficiary to stay knowledgeable about a trust’s administration is through a designated representative. A designated representative is a person nominated in the trust instrument who can represent and bind a beneficiary and receive any notice information, accounting, or another report on behalf of the beneficiary. The trust document may designate one or more persons, other than the trustee to nominate a designated representative.
A trust document can give a person or even a committee the power to appoint a designated representative for one or more beneficiaries. The trust document could also provide a set period of which a representative could serve for a beneficiary. This would be a good option for a young beneficiary that may not be mature enough to handle the responsibilities of being a beneficiary of an irrevocable trust.
The designated representative does have some limitations. The trustee and the designated representative cannot be the same person. Further, a designated representative cannot be a beneficiary unless the settlor named the representative or the representative is the beneficiary’s spouse or a grandparent or descendant of a grandparent of the beneficiary or the beneficiary’s spouse.
Representation by the Holder of a Power of Appointment
Another way a trust’s disclosure requirements can be shifted is through the use of a power of appointment. Florida Statute Section 736.0302 provides that, “the holder of a power of appointment may represent and bind persons whose interests whose interests, as permissible appointees, takers in default, or otherwise, are subject to the power.” The Florida statute does not require that the power of appointment be a testamentary power or a general power for representation purposes, which provides some flexibility.
For more information on what information a trustee is required to disclose to the qualified beneficiaries, and how to shift some of this burden, contact Jacksonville Trust Lawyers at The Law Office of David M. Goldman PLLC today.