What to Do When a Trustee Refuses to Give Accounting

What happens to money held in trust after a person dies? Many beneficiaries know that they are entitled to trust benefits and disbursements, but they don’t always keep track of the balances on trust accounts. This can put your family’s finances at risk of bad actors. Here’s why you should pay attention to your trustee’s accounting documents, and what to do when that trustee refuses to give accounting upon request.

What are a Trustee’s Accounting Duties?

A trustee is a person responsible for administering money held for the benefit of another person, or persons, who are called the beneficiaries. The trustee is appointed by the person creating the trust (the settlor or grantor), and given certain authority to manage the funds and property placed within the trust for the beneficiaries’ benefit.

A trustee has a fiduciary duty to the beneficiaries. This includes many different legal duties. Generally, a trustee’s fiduciary duty requires them to put the trust’s interests – and by extension the beneficiaries’ interests – before their own when handling trust affairs. A trustee is required to be honest and forthright about how assets are distributed, and to whom.

One of the trustee’s fiduciary duties is to communicate with beneficiaries and other interested parties, keeping them informed about what happens to the assets held in trust. Most often, this involves issuing periodic trustee accounting statements. The trust’s founding documents dictate when and how the trustee is required to provide the beneficiaries with trust accounting. Florida law requires trustees to provide an annual accounting to each “qualified beneficiary” in the case of irrevocable trust even if the trust document itself attempts to waive the requirement. This accounting must document:

• All significant transactions
• Compensation paid to the trustees
• Gains or losses from investments
• Current value of trust assets

The trust’s founding documents may require these accountings to occur monthly or quarterly, often to be sent along with any beneficiary distributions.

However, beneficiaries also have the right to make reasonable requests for accounting and other information from the trustee. Upon request, the trustee must make the trust accounting available for the beneficiaries to review, and answer reasonable questions about how the trusts’ assets are being spent or distributed.

Why Wouldn’t a Trustee Give Accounting to Beneficiaries?

There are several reasons why a trustee may violate their fiduciary duty to give accounting to beneficiaries. First, the accounting may simply not have been done. While trustees are legally required to keep detailed and accurate records, many trustees fall behind or aren’t as accurate as they should be in their accounting.

In other cases, a trustee may refuse to give accounting when they know that doing so would reveal they have breached other fiduciary duties to the trust. The accounting is one of the few ways that beneficiaries can oversee and regulate a trustee’s actions. This may include mismanagement of trust funds, failure to pay taxes, or direct embezzlement of trust assets. When a trustee is behaving badly, they may delay, obscure, or refuse to give accounting documents to hide their tracks.

What to Do When a Trustee Refuses to Give Accounting

When a trustee’s accounting goes missing, doesn’t add up, or when a trustee fails to respond to your requests for information, you need to act quickly to preserve your family’s rights under the Florida Trust Code. If the trustee provided you with a disclosure document – even an incomplete one – you may only have six months to object to that document.

You can do so by filing a lawsuit against the trustee on behalf of yourself and your fellow beneficiaries. If you prevail, the Florida probate court can find the trustee liable for any damages related to the breach. This includes lost investment opportunities, reduction in trust capital, and the attorney fees beneficiaries paid to uncover the breach of fiduciary duty and recover the damages.

Many fiduciary lawsuits against trustees start with missing or incomplete financial disclosures and end in court. You may not know you need to file a lawsuit for breach of fiduciary duty until after the clock has already begun ticking for you to raise your claim. At Harrison Estate Law, P.A., our experienced estate and probate team can help you determine if there has been a breach of fiduciary duty, what the trustee’s behavior has cost you, and decide if there are grounds to file a lawsuit against the trustee for failing to give accounting or breaching their fiduciary duties. We also can help defend fiduciaries against claims by disgruntled family members looking for more than their fair share. Contact us here or call 352-559-9828 to get help today when your trustee refuses to give accounting.