Trustees and personal representatives are fiduciaries who must observe a standard of care in the delegation of their duties. Failing or neglecting to manage assets with utmost care and professionalism can result in a lawsuit for breach of trust or breach of fiduciary duty.
Fiduciaries are required to administer estates and trusts i) in good faith, ii) in accordance with the terms of document, iii) according to Florida law, and iv) in the interests of the beneficiaries.
The Florida probate code states that “[a] personal representative is a fiduciary who shall observe the standards of care applicable to trustees.”
The Florida trust code sets forth the following standards of care, which are applicable to personal representatives and trustees:
- Duty of loyalty: A fiduciary shall administer solely in the interests of the beneficiaries and shall refrain from taking actions which have the potential to create conflict between a fiduciary's personal interests and their duties to the beneficiaries.
- Duty of impartiality: If there are two or more beneficiaries, a fiduciary shall act impartially in administering the property, giving due regard to the beneficiaries respective interests.
- Duty to act as a prudent administrator: A fiduciary shall administer as a prudent person would, by considering the purpose, terms, distribution requirements, and other circumstances of the estate or trust. In satisfying the standard, the fiduciary shall exercise reasonable care, skill, and caution.
- Duty to account: A fiduciary must keep beneficiaries informed of the administration and formally account for the assets.
Failure to manage assets in accordance with the terms of the will or trust and Florida law can result in the fiduciary being removed and being held personally liable for damages. The terms of a trust or will cannot eliminate a fiduciary's duty of care, including the requirement that they must account to the beneficiaries.
In the event that a claim for breach is filed against a fiduciary, they might be forced to defend such claims with their own assets. For instance, the trust code does not allow a trustee to automatically use trust assets to defend a breach of fiduciary duty claim. A trustee must provide notice to the beneficiaries and give them the opportunity to elect a court hearing so the judge can decide whether the trustee's use of trust assets is appropriate. Although the probate code does not have a similar rule for personal representatives, generally estate assets are not used to fund a defense because, if defense of the claim is unsuccessful, the judge could order the attorney who received the estate assets to return them to the estate.
Ms. Rountree has dealt with many types of issues that arise in breach of trust cases, and she has successfully litigated and settled breach of fiduciary claims on behalf of her clients. Shannon L. Rountree, P.A. provides services to represent fiduciaries and beneficiaries for claims regarding mismanagement of assets, misappropriation of assets, theft, failure to account, fraud, conflicts of interest, failure to distribute assets, and improper distribution of assets.