Want to be a Trustee? Here is what you need to know!

One of the best ways to protect your assets after your death is the creation of a trust.

These legal entities help protect your assets and distribute them how you want them distributed. There are no questions about who gets what, and your estate can often eliminate substantial tax burdens. Everything is kept private, so there is no public record of the distributions, although there must be an annual accounting of the beneficiaries.

There are also many different types of trusts, including one for your pets!

But a key part of creating all trusts is designating the trustee, the person who controls the assets and distribution of the trust after your death. The trustee can be just about anyone you choose, but they should understand what is involved – and it is not easy.

Of course, the attorneys at The Orlando Law Group can work with you on creating a trust and work with the trustee to ensure that the trust is following the directives you put into the trust.

Here are a few roles of the trustee.

1. Giving appropriate notice: Under the Florida Trust Code (Sections 736.0101-736.1301), the trustee must provide formal notice to the beneficiaries that the trust has been created and that they are involved. The trustee files a Notice of Trust with the county court for the jurisdiction where the grantor died and a Notice to Trust Beneficiaries. This document informs the beneficiaries about their right to account information and other trust materials. The trustee must give notice within 60 days of accepting their duties.
2. Paying final expenses: Trustees will be responsible for using trust assets to pay for any final expenses, including burial and funeral costs. They will use funds specifically set aside in the trust to pay these bills, along with any costs of setting up the trust.
3. Setting up the trust: Setting up the trust requires four main actions.
   1. Deposit the original will with the probate court. The trustee must locate and present your will to the county probate court within ten days of the death.
   2. Order death certificates. Death certificates are obtained from whoever is handling the final arrangements, such as a funeral home. They are used for securing payments from insurance policies and ending liabilities.
   3. Review the terms of the trust. The trustee will review the conditions and fulfill your wishes within the terms of the trust. This is when working with a trust administration attorney can be extremely valuable.
   4. Get a tax number for the trust. To pay taxes, the trustee will need to request an Employer Identification Number (EIN) from the IRS. They can then manage the trust as a business entity and conduct its financial business.
4. Gathering and protecting trust assets: The trustee will take control of all the trust’s assets, including compelling any former trustees to release control. The trustee assumes a fiduciary duty to maintain, protect, and invest the assets impartially and prudently for the good of the beneficiaries and the trust itself. Protecting assets involves paying outstanding taxes, bills, and mortgages. The trustee will file tax returns for the trust and provide an annual accounting to beneficiaries to demonstrate their good faith management.
5. Overseeing transfer of non-trust assets: Not everything you leave to your heirs will be part of the trust. The trustee will be charged with ensuring all property and money is successfully transferred to the intended recipients, even when it is not part of the trust. Trustees should oversee the transfer of items such as the following:
   1. Jointly-owned property. When an asset is owned jointly with another person with the right of survivorship, that property automatically transfers to the surviving owner without the need for probate.
   2. Pay-on-Death and Transfer-on-Death accounts. These financial accounts will go directly to the designated beneficiaries.
   3. Life insurance benefits, Life insurance proceeds will pass to the designated beneficiaries without probate.
   4. Retirement accounts. Like life insurance policies, IRAs and 401(K) accounts are paid directly to their beneficiaries.
6. Resolving outstanding debts and liabilities: The trustee will identify all liabilities and claims against the estate that are part of the trust at the time of death. They will pay those that are legitimate and any that arise after the Notice of Trust publication. Understanding when a claim is legitimate and when it is not can require experienced guidance from a trust administration attorney.
7. Distributing assets: Some trusts call for full distribution of all assets within a short period. Others are created to provide funds and investment growth over many decades to support the beneficiaries. Regardless of the terms, the trustee must make distributions at the intervals dictated by the trust conditions. They will continue to do this until the trust terms are satisfied or until they hand over duties to a new trustee.

How can I make sure I’m doing what I need to do as a trustee?

Administering a trust is very complicated, just like any part of executing an estate. According to Florida estate planning law, trustees must “administer the trust in good faith,” meeting the requirements of both the trust and the law.

Trusts are intended to avoid probate and excessive tax liabilities for the beneficiaries, but they require significant effort from the trustee.

Trustees are responsible for collecting and managing all the trust’s assets. They may need to initiate business succession plans, distribute personal assets, transfer funds among accounts, and convey titles for real estate and vehicles to their respective recipients. These actions involve contact with numerous government agencies and many hours of work.

Here are a few duties required of any trustee.

• Duty of impartiality to follow all the trust’s terms, distributing assets to the beneficiaries equally.
• Duty to diversify and grow the trust’s investments for the best interests of the beneficiaries. If you choose to delegate these decisions to an investment firm, you will need to select a trustworthy institution.
• Duty of good faith to make decisions serving the best interests of the trust and its beneficiaries in situations that are not covered under the trust’s terms

The attorneys at The Orlando Law Group can help you set up a trust or act as trustee in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida, along with all aspects of estate planning.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

Last Updated on January 6, 2025 by The Orlando Law Group