Trustee Duties and Indicators of Self-Dealing
When creating an estate plan, many Floridians place their trust in individuals to manage assets responsibly. One key figure in this process is a trustee. A trustee is the person or institution appointed to manage the assets in a trust for the benefit of the beneficiaries.
Under Florida law, trustees have a fiduciary duty, which means they are legally required to act in the best interests of the beneficiaries at all times. They must follow the terms of the trust, manage assets prudently, and avoid conflicts of interest. If you have questions about trustee duties, contact a Palm Harbor estate planning lawyer.
Core Responsibilities of a Trustee in Florida
Trustees have several important duties, including administering the trust according to its terms and acting loyally and impartially, always putting beneficiaries first. To do this, there needs to be accurate record keeping and updates have to be provided to beneficiaries. It is also important to invest in assets prudently, to preserve and grow the trust’s value, and avoid self-dealing, which means not using trust assets for personal benefit.
Most trustees take these responsibilities seriously. They serve with integrity, guided by the trust creator’s wishes and the legal obligations that come with the role. Yet in some cases, trustees abuse their position for personal gain. This is called self-dealing, and it can harm the beneficiaries and violate the law.
Self-dealing can sometimes be subtle. Beneficiaries should watch for these red flags:
- Unexplained asset transfers. Trust property is sold or moved to entities connected to the trustee.
- Conflicts of interest. The trustee manages trust investments in companies they own or control.
- Excessive fees. There are unusually high compensation fees paid to the trustee without proper explanation.
- Lack of communication. The trustee refuses to provide regular accountings or delays sharing information.
- Personal use of trust assets. The individual who serves as trustee lives in trust-owned real estate or uses trust funds for personal expenses.
For example, if a trustee sells trust-owned real estate to their own business at a discounted price, this is a clear act of self-dealing. Similarly, if a trustee hires a company they secretly own to manage trust investments and pays themselves inflated fees, beneficiaries should be concerned.
How to Stop Self-Dealing
Should beneficiaries suspect self-dealing, they should act quickly. Florida law provides several ways to address trustee misconduct. For one, a beneficiary can request a formal accounting. Then, if something seems improper, beneficiaries can demand corrective action.
A Palm Harbor estate planning lawyer can review all of the documentation you have to determine if misconduct occurred. Next steps could include asking a court to remove the trustee, recovering misused assets, and, in some cases, pursuing damages.
Have you recently come across information that has you wondering if a trustee is siphoning assets? Families should stay informed and vigilant to ensure that trust assets are managed fairly and in accordance with Florida law. Have a conversation with the attorneys at Miaoulis Law if you live in Palm Harbor, FL or Pinellas County, FL. Schedule a confidential consultation today.
