Trusts are an important legal tool that anyone considering how they will distribute their assets when they die should keep in mind when planning an estate. A trust agreement offers certain advantages over a will, including most notably the chance to avoid what can be a complicated probate process. It also comes with certain upfront costs and legal requirements that are important to keep in mind.
Anyone planning how to distribute their assets in Florida is well advised to seek the assistance of an experienced Miami estate planning attorney. It is vital that you understand the basics of how a trust works before deciding whether or not to go that route in estate planning. That includes getting a sense of the important role that a trustee plays in trust administration.
The Job of a Trustee
A trust is a legal arrangement in which a person—the “grantor”—transfers certain assets into the trust and signs an agreement laying out who can access those assets and where they will be distributed when the grantor dies. The trustee is the person or entity designated to oversee or administer the trust. A bank or independent professional often fills the role of a trustee, but just about anyone can be tapped to fill the role, including the grantor.
Florida law obligates the trustee to act in good faith, among other requirements. In other words, the trustee is expected to be an impartial party who carries out the terms of the trust agreement with fairness to all beneficiaries (those designated to take the assets upon the grantor’s death). The trustee also can’t use the trust for his or her personal advantage or take a position that pits the trustee’s interests against those of the beneficiaries. The person or entity overseeing the trust must provide certain basic information to the beneficiaries, including by compiling annual reports on the status of the trust and its assets.
Conflicts of Interest
Any transaction involving self-dealing by a trustee is considered void under Florida law. That includes sales and other transactions involving the trust property that will benefit the trustee. It also extends to sales and other transactions entered into by the trustee’s spouse, relatives. In situations in which the trustee is an entity, it’s barred from engaging in deals involving officers or directors of the entity, as well as its agents, attorneys, or a company in which the trustee has an interest.
Contact the Miami Estate Planning Attorneys at Hoffman & Hoffman P.A.
Hoffman & Hoffman is a South Florida estate planning law firm whose attorneys help people manage their assets and decide how property will be distributed in the event of their death. We are pleased to represent clients throughout South Florida, including in Ft. Lauderdale, West Palm Beach and Coconut Grove. Call us at 305-372-2877 to speak with an attorney.