When your family manages its money using a trust, your comfort and livelihoods may depend on the trustee doing their job well. Unfortunately, sometimes the people managing your money will not live up to the task. Find out what you can do when you discover trustees behaving badly.
Before we can address what happens when trustees behave badly, we need to know what it looks like when things are going well. According to the Florida Trust Code, trustees have multiple overlapping duties to the trust and its beneficiaries (your family). Below, we focus on six categories where issues can often arise, including examples of what might constitute violations of each duty:
This duty requires a trustee to make good faith efforts to fulfill the terms and purposes of the trust itself. In other words, the trustee needs to make reasonable efforts to to live up to the duties described in the trust document. A violation of the duty to administer trust could be:
When it comes to handling trust affairs, a trustee is required to put the beneficiaries’ needs before their own. This usually means a trustee should not gain personal benefit from administering the trust (beyond a reasonable payment for their services). Violations of the duty of loyalty may be:
It is not the trustee’s job to pick favorites among the beneficiaries. Instead, the trustee is required to act impartially, balancing the beneficiaries’ respective interests. When a trustee is behaving badly, this could look like:
A trustee must use all reasonable care, skill, and caution when administering the trust. Violating this duty could be:
Remember that trustees are entitled to be paid for their services. When these payments, or other expenses dip into the trust principal, a trustee is required to take steps to keep those costs reasonable. Violations of this duty may be:
Trustees’ primary responsibility is to protect the items and assets in the trust and see to their administration. When a trustee fails this duty it could look like:
The trustee is required to keep the beneficiaries informed about the state of the trust. The trust documents may require regular accounting updates. Even if it doesn’t, beneficiaries may make reasonable requests for information. The way that most beneficiaries learn about their trustees behaving badly is when they breach their duty to inform and account for the trust. When the trust’s annual accounting doesn’t add up or goes missing, beneficiaries may find that the trustee has been violating other parts of their fiduciary duties.
When beneficiaries learn of their trustees behaving badly, they may need the help of a probate lawyer to take the matter to court. By suing for a breach of fiduciary duties, a trust’s beneficiaries can remove the trustee, replace him or her with someone they trust, and be compensated for the financial harm caused by the trustee’s malfeasance or bad choices.
Suing a trustee for a breach of fiduciary duties often involves careful accounting and the use of financial experts to explain what went wrong. The process can take time and many hours of attorney work to unravel the financial consequences of the trustees actions. However, depending on the nature of the breach, and whether the trustee was sued as an individual or in their role within the trust, a trustee may have to pay the trust back for attorney fees and costs related to the lawsuit.
If you think your family’s trustees have violated their fiduciary duty and managed your family's trust in bad faith, you should speak to a probate attorney as soon as possible. At Harrison Estate Law, P.A., our experienced estate and probate team can help you demand and investigate your trust’s accountings, identify the breach in fiduciary duty, and decide if there are grounds to file a lawsuit against the trustee. We will help you be sure your family members’ trust is handled properly so it can provide for your family’s needs for years to come. Contact us here or call 352-559-9828 to get help today.