On behalf of Law Offices of Frye, Fortich & Garcia, P.L. | April 25, 2022 | Trusts
One primary duty of a trustee is the duty of loyalty. A trustee shall administer the trust solely in the interests of the beneficiaries; not for his or her own personal advantage. (F.S. 736.0802). Self-dealing by a trustee is strictly prohibited by Florida law.
Being asked to serve as trustee of a trust account created by a family member, friend, or colleague may be a daunting task. As we can attest to, the relationship between trustees and beneficiaries can be a tenuous one. If you are new to the position of a trustee, then it may be important to know exactly what your duties are, both in satisfying the interested parties to your trust and in fulfilling its purposes.
The Florida Trust code sums up your duty of loyalty to the beneficiaries of your trust by stating that all of your administrative actions should be done solely in their best interests. A conflict of such interest may often arise in your management and investment of trust property. According to state law, your personal and fiduciary interests are presumed to be conflicted if you enter into any transaction involving trust property with any of the following parties:
- Your spouse or other members of your immediate family
- Your attorney or any of your directors, executive officers, agents or employees
- Any corporations or enterprises in which you have a vested interest
If it is determined that a transaction presents such a conflict, it may be voided by beneficiaries. Such action is not permitted, however, if the transaction was authorized by the terms of the trust, the court, or by consent of the beneficiaries (or they did not exercise their voiding rights in time). The same is true if you entered into a contract commencing the transaction prior to being named trustee, or the transaction was approved by the settlor while the trust was still revocable.
If you have any questions about how to select a trustee, or to set up a trust to ensure the results you desire, please don’t hesitate to give us a call at 305-931-3200.
