When someone dies in Florida, the executor and trustees must know their legal duties. Their responsibility is to take care of matters such as gathering assets, settling business affairs, paying outstanding debts, filing tax returns and distributing assets as directed by the decedent.
If you fail to perform these duties correctly as an executor or trustee, you may be removed from your role and potentially penalized.
In this blog, we’ll go over the key things you should know as an executor or trustee in Florida.
What Is an Executor?
An ‘executor’, called ‘personal representative’., is an individual or entity (such as a bank) that handles the estate of a deceased person as directed by the will. If there is no will, then they must act as determined by Florida intestacy laws.
An executor is the person or entity named in the will. If there is no will, the executor is a person or entity appointed by the court.
What Is a Trustee?
A ‘trustee’ is an individual or entity (such as a trust company or bank) that is the legal owner of assets and property under the terms of a trust.
Trustees must act in the best interests of the beneficiaries and follow various duties.
Someone Has Died, What Do I Do Next?
If you are the executor or trustee of someone who has passed away, you should ensure you do all of the following:
- Read the will to see if there are any immediate instructions.
- Contact a Florida probate attorney as soon as possible.
- Handle and arrange care for all dependents and pets. Retain records of related expenses, which can later be covered by the estate.
- Monitor the home. Ensure it’s locked, clean of trash and discarded food. Change the locks if needed.
- Notify close friends and family.
- Notify employers.
- Arrange for funeral and burial as instructed in the will.
- Order death certificates from the funeral home.
- Locate important documents, such as trust agreements, bank statements, investment statements, deeds, birth certificates, certificates of title and life insurance policies.
What Are My Duties as an Executor in Florida?
The executor of an estate in Florida must:
- Notify all interested parties of the death and the progress of the probate proceedings.
- Notify creditors of the death.
- Publish a legal notice for unknown creditors.
- Inventory and gather all assets owned by the estate.
- Value and protect the value of assets.
- File inventory with the court.
- File estate tax returns
- Pay outstanding debt claims from creditors.
- Manage assets
- Sell assets if necessary to pay taxes and creditors
- Arrange to caretake of assets if needed
- Distribute assets to beneficiaries as stated in the will or under intestacy laws.
- Report to the court
- Close the estate
How Long Does a Trustee Have Power For?
A Trustee has authority for as long as the trust describes. For example, you may be required to make decisions about assets until a child reaches the age of 30, where they will take control. Trustees may be removed or placed when:
- A trust is revoked
- The terms of the trust state your tenure has ended
- A court removes you from your position as trustee
What Property Do Trustees Manage?
The trustee of a revocable living trust has power to manage over property that has been actually transferred to the trust.
If you’re a trustee, you have the authority to use the funds and assets in the trust in the best interests of the beneficiaries. Trustees have no authority to manage money or assets that are not owned by the trust.
What Are My Duties as a Trustee?
As a trustee, you must deal only in the best interests of the trust and the beneficiaries. You must ignore your own interests and avoid any favoritism. To do so, you should:
Read the Trust Document
Your power as a trustee is limited to what the trust’s terms and Florida law permits.
For example, unless stated as prohibited in the document, you have the ability to purchase and sell trust assets and use professional advisors and appraisers.
Remain Loyal to Trust Beneficiaries
Current and future beneficiaries must be treated with loyalty at all times. I.e., you must not let them down in times of need or fail to act in their best interests.
Trustees must ensure that while acting in the best interests of the beneficiaries, they do not inhibit the interests of each individual. There must be no favoritism or ‘deals’ made.
Manage the Assets Wisely
All trust assets should be managed in order to achieve consertative growth.
Provide Accounts and Information to Beneficiaries
All beneficiaries should be provided with key information and accounting information and when requested.
Ensure Trust Assets are Seperate
There must be no commingling with personal assets, while every transaction must be recorded – regardless of whether it’s incoming or outcoming.
No Self Dealing
There must be no self-dealing or favoring at the expenses of any other beneficiary.
What if There Are Co-Trustees?
If there are other named co-trustees, the trust document will likely state how decisions should be made. If no instructions are provided, then Florida law requires that decisions are made by ‘majority rule’.
You should coordinate and exchange information regarding decisions with other co-trustees and avoid conflicts affecting the management of the trust.
There may also be successor trustees named in the trust document. They will only become active should you no longer be able to perform your duties. They have no power to remove you from your position without justification through a trustee removal contest.
Understanding the Will or Trust Document
Every executor and trustee must understand the terms of the will or trust under which they are appointed. This includes knowing who the beneficiaries are, what they are entitled to receive, when and what instructions are stated.
For example, does the will state that the entire estate can be distributed evenly, immediately? Or does it say something such as, “The estate should be distributed with 60% to my wife and a 40% share to my children?”
Alternatively, many trust terms state they place responsibility on the trustee to distribute income and assets as they believe is in the best interests of the beneficiaries. For example, for supporting the education of a child until they’re 25. Wills and trusts also tend to state critical tax and expenses details.
To understand a will or trust document, you can speak to a Florida will attorney or trust attorney. They’ll have the expertise to guide you through the more complicated language of the will and ensure you fulfill all your duties.
Managing Estate Assets as an Executor or Trustee in Florida
Every executor and trustee has a responsibility to manage the assets of an estate or trust. You should identify, secure and value all assets as soon as possible. However, some assets (such as brokerage accounts) may be only accessible after certain time frames or criteria have been met (for example, brokerage accounts). For example, you may need to obtain formal authorization from the court by providing a death certificate or filing a claim with an insurance company.
Appraisals are usually made with professional appraisers. Appraisals can be performed on tangible property such as vehicles, jewelry, collectibles, furniture, appliances and artwork. As well as financial assets such as bank accounts and securities. If the property is particularly unique or rare, then it’s advised that you contact a specialist appraiser instead. For example, if your father collected old Formula 1 cars, you’d need a motorsports specialist.
Valuation on assets can also help executors and trustees gauge if the pre-existing insurance coverage was enough, as you’ll need to maintain sufficient insurance during your tenure.
Debts and Expenses
After a death in Florida, the executor or trustee must pay outstanding debts before the estate is distributed. If there is probate, you should notify creditors. They will then have time to file a claim for outstanding bills.
You will also need to continue paying expenses such as utility bills, homeowner’s insurance premiums and income tax (and file an income tax return in the year of the death).
Estates and trusts that may earn income on assets must obtain new tax ID numbers, which can be acquired online from the IRS. You should not use the decedent’s own social security number.
Taxes after death come with all sorts of complications, especially when they involve a trust. It is advised that you consult a Florida probate attorney as soon as possible.
Trust and will documents may instruct you to distribute cash or property gifts immediately. However, ensure that all debts and taxes are covered first as executors and trustees can be held liable if the estate or trust fails to pay all debts and taxes. It is always best to speak to a Florida probate attorney to ensure all funding and gifting is completed legally.
Contact a Florida Estate Planning Attorney
If you’re an executor or trustee in Florida, our Florida probate and estate planning attorneys can help. Managing an estate or trust requires legal expertise to ensure you avoid making critical mistakes with taxes, creditors and laws that could see beneficiaries lose their inheritance.
Feel free to contact us today for a free consultation.