Does a Florida Trustee Have to Provide Annual Accountings?
In any Florida irrevocable trust, state law requires the trustee to “provide a trust accounting … to each qualified beneficiary at least annually and on termination of the trust or on change of the trustee.” Practically speaking, the trustee must give the beneficiary a “reasonably understandable report” so that the beneficiary can understand what property the trust currently owns (and how much it is worth), how any trust funds have been spent, and how any income or principal from the trust has or will be allocated. Failure to provide such accountings is a breach of the trustee’s fiduciary duty under Florida trust law.
Florida law does not require a specific method for preparing a trust accounting. But a trustee must exercise common sense and act in good faith. If the trustee is not a professional fiduciary, they should hire a trust attorney, certified public accountant, or similar expert who can assist in the preparation of a trust accounting to ensure the trustee fulfills their fiduciary obligations. This is especially important when a trustee administers a trust where the beneficiaries are other family members. The trustee should never assume that a formal accounting is unnecessary just because the trust benefits their parent, child, or sibling.
Florida Court Rejects Daughter’s “Loose, Informal Accounting” of Mother’s Trusts
Indeed, the Florida Fourth District Court of Appeals observed in a recent case involving the administration of an irrevocable trust that the “loose, informal recordkeeping common to family finances is contrary to the requirements imposed on trustees by Florida statutes.” The case before the Fourth District, Revah v. Revah, involves a woman in her 90s who sued her daughter over the latter’s failure to provide annual accountings while serving as trustee of two separate trusts.
In brief, Salomon Revah died in 2012. His daughter, Cecile Revah, then became successor trustee of Salomon’s trust. Cecile also served as the trustee for a trustee created by her mother, Suzanne Revah, who is still living. Suzanne later sued Cecile, alleging she had not provided her with accountings for either trust in over 10 years and committing other alleged breaches of fiduciary duty.
Overturning a trial court’s ruling in Cecile’s favor, the Fourth District said, among other findings, that Cecile “failed to meet her burden of proving that she had served statutorily-compliant accountings.” Basically, the evidence presented to the trial court showed that Cecile’s response to her mother’s demand for annual accountings was to provide a “document dump” of third-party financial records in a Dropbox folder as well as some “unsworn ledgers” filed after Suzanne brought her lawsuit. This did not meet Florida’s statutory requirement of providing a “reasonably understandable” report to Suzanne, whom the court noted was a woman in her 90s that could not read and spoke French as her primary language.
Contact a St. Petersburg Irrevocable Trust Attorney Today
In creating any trust, it is important to select initial and successor trustees who will carry out your wishes and follow the law when it comes to the administration of the trust. Our experienced St. Petersburg irrevocable trust lawyer can provide you with invaluable guidance in this area. Contact Drude Tomori Law today at 727-300-8900 or contact us online to schedule a consultation. We serve clients in St. Petersburg, Lakewood Ranch, Bradenton, and Sarasota.
Source:
scholar.google.com/scholar_case?case=5028622882297120989
