Trustee Provide an Accounting

When Must the Trustee Provide Accounting?

trustee provide accounting to trustFundamental to trust law, a trustee is always under a duty to give information to a beneficiary. So when must the trustee provide accounting? Most states have enacted statutes specifically dealing with this duty to account. In Florida Fla. Stat. 736.0813 provides that a trustee shall provide a trust accounting to the trust beneficiaries at least annually and on the termination of the trust.

The trustee has a whole year to operate as trustee without being required to provide an accounting to the beneficiaries. But, the trustee must provide an accounting annually. This accounting is the primary method a beneficiary can hold a trustee accountable. Without an accounting, a beneficiary is virtually powerless and at the mercy of the trustee.

Calendar for trustee provide accountingMany have asked the question – exactly when is the accounting due? While none of the trust statutes specify a specific time frame when the accounting is due once a year has elapsed, common sense would suggest that a trustee has a reasonable amount of time to provide the accounting.

When must the trustee provide accounting? In my opinion, a reasonable amount of time would approximately 90 days from the close of the accounting period. This provides the trustee sufficient time to gather up the final month’s information and assemble the actual trust accounting.

What if the trustee does not provide the trust accounting? I would suggest that you write to the trustee shortly after the accounting period is up to request an accounting. If the trustee fails or refuses to provide an accounting, you may be justified in arguing that the trustee has committed a breach of fiduciary duty and even a fraud and should at the very least, be removed for intentionally refusing to provide the accounting.

Trustee provide accounting art courtIf the accounting is not forthcoming a beneficiary can compel the accounting by filing a lawsuit for an accounting. I strongly urge trust beneficiaries to be vigilant in monitoring the trustee and making sure a timely accounting is provided.

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868   jfleece@legacyprotectionlawyers.com  

Probate and Trust litigation

Probate Assets: Real estate, Insurance, Annuities …

Are Real Estate, Insurance Policies and IRA’s Probate Assets?

Probate administration of assetsProbate administration only applies to probate assets. A probate asset is assets that the decedent owned in his or her sole name at death. Probate assets also were owned by the decedent and one or more co-owners – and lacked a provision for automatic succession of ownership at death.

Some types of probate assets:

real estate probate assetsReal estate titled in the sole name of the decedent, or in the name of the decedent and another person as tenants in common, is a probate asset (unless it is homestead property). Real estate titled in the name of the decedent and one or more other persons as joint tenants with rights of survivorship is not a probate asset.

Property owned by husband and wife as tenants by the entirety is not a probate asset on the death of the first spouse to die but goes automatically to the surviving spouse.

Probate assets Life InsuranceLife insurance policy, annuity contract or individual retirement account that is payable to a specific beneficiary is not a probate asset. A life insurance policy, annuity contract or individual retirement account payable to the decedent’s estate is.

Probate assets bank account and investmentsBank accounts or investment accounts in the sole name of a decedent is a probate asset. A bank account or investment account owned by the decedent and payable on death or transferable on death to another, or held jointly with rights of survivorship with another, is not a probate asset.

This list is not exclusive but is intended to be illustrative.

TO SCHEDULE AN APPOINTMENT WITH JAY FLEECE:

PHONE: 727-471-5868   JFLEECE@LEGACYPROTECTIONLAWYERS.COm

The information above is courtesy of The Florida Bar and represents general legal advice. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

Trust estate litigation

Trust estate litigation: breach of fiduciary duty

Many of the same contested issues in a probate estate also exist in trust estate litigation matters.

Trust estate litigationThe main difference is that an independent civil action needs to be filed in order to invoke the jurisdiction of the court and have summonses issued to the Defendants. As Florida trust administration is not court-supervised, it is up to the beneficiaries, rather than the probate judge, to make sure the trustee is discharging his duties in accordance with the trust terms and with the law. For the most part, the only way a beneficiary can review what the trustee has done is through the annual accounting which the trustee must provide each qualified beneficiary every year. If the accounting is not provided, the trustee has breached his fiduciary duty to keep beneficiaries informed, which could result in trust estate litigation, and the trustee is held liable.

Duty to Account: A trustee has broad discretion in dealing with trust property, subject to the duty of loyalty, a duty of impartiality and the other fiduciary duties imposed on the trustee. The trustee operates with very little oversight by anyone over the trust’s assets. The trustee is not Trust estate litigation and the trustee's responsibilityunder court supervision unless the court’s jurisdiction is invoked and is only accountable to the beneficiaries of the trust. Practically the only time a beneficiary can review what the trustee has done and have an opportunity to challenge those actions is when the trustee provides an accounting to the beneficiary, if not it is the grounds for trust estate litigation.

As the equitable owner of the trust property, the beneficiary has a vested interest in the management and administration of the trust and has an enforceable right to an accounting from a trustee. Furthermore, because the trustee has a fiduciary obligation to the beneficiary, the beneficiary must be accurately informed as to what the trust property consists and how it is being managed. The beneficiary must be accurately informed about the administration of the trust in order to hold the trustee to the proper standard of care and honesty and to enforce his [the beneficiary’s] rights in the trust.

Trust estate litigation accountingA trustee has a duty to maintain clear, complete and accurate books and records regarding the trust administration and at reasonable intervals must provide beneficiaries with reports or accounting. It is important for the trustee to keep accurate records so that the beneficiary can tell whether the trustee has acted with prudence, loyalty, and impartiality and whether the costs of administration have been reasonable and appropriate.

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868   jfleece@legacyprotectionlawyers.com  

estate assets

Estate planning and How Property Passes on Death.

Estate planning:

When someone dies, their property, be it real estate, bank accounts, stocks, bonds, jewelry, automobiles or whatever that person owns must pass to someone legally entitled to those assets. There are 3 basic ways through proper estate planning that property passes on death. Each way depends on how the particular asset is owned or titled at the time of death.

Probate court1. Probate. If someone owns an asset in his or her own name at the time of death, that asset should pass to the deceased beneficiaries that are specified in his or her will. If the decedent did not have a will, then the property owned by the decedent will pass under the laws of intestacy. In other words, the state of Florida makes a will for the decedent. This doesn’t mean all of the decedent’s property passes to the state but rather to individuals depending on their relationship to the decedent.

Florida statutes 732.102 and 732.103 set forth the statutory scheme for intestate succession. For example, if a man dies without a will but is survived by a spouse and children of that marriage, then the surviving spouse is entitled to the first $60,000.00 of assets and anything over that amount is equally divided between the surviving spouse and the children.

When property passes by the terms of a last will and testament or by intestate succession, the process by which this transfer is accomplished is called probate. Probate is essentially a court-supervised process whereby a decedent’s property is transferred in an orderly fashion to the ones legally entitled to those assets.

Estate planning and A Living Trust2. Trusts. Some people elect to create a revocable “living” trust during their lifetime. Here, the trust assets are typically titled in the name of the trust. The grantor, the one creating the trust, has full power to change, modify and revoke the trust during his or her lifetime. After the death of the grantor, these trusts usually terminate and the disposition of the property held in the trust will be governed by the terms of the trust. These type of trusts typically contain language very similar to language used in a last will and testament, which specifies how and to whom the decedent’s property will pass. A successor trustee named in the trust document would then have the responsibility of effectuating the terms of the trust and to make sure the intended beneficiaries receive what the decedent intended. The administration of the trust is also similar to the probate process but is not subject to court supervision.

Estate assets3. By contractual provisions. Assets subject to contractual provisions pass outside the probate process and the trust process. These assets pass directly to the recipients designated in the contract that governs that asset. The most prevalent type of asset that passes by contract would be a joint bank account. Typically a bank account titled in two or more names will pass to the survivor. Other types of contractual bank accounts include the payable on death account, or the “held in trust for …” account, a Totten trust as these types of accounts are sometimes called. Other forms of contractual arrangements which pass property directly to a named beneficiary include life insurance policies, retirement accounts, and annuities.

Why someone should engage in estate planning. While each of these areas is discussed in greater detail in other articles, this basic outline should illustrate how important it is to make sure that you understand how your assets are titled and how they will pass on death. The unintended consequences of improperly titling your assets could have a devastating effect on your estate plan. For those with substantial wealth, estate planning from a tax perspective can save on income and estate taxes.

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868   jfleece@legacyprotectionlawyers.com