If a Trustee has failed to provide you with accounting information or you suspect mismanagement, then you should contact a Trust Accounting Disputes attorney as soon as possible.
Alternatively, if you are a Trustee facing allegations over Trust accounting, you will require robust legal expertise.
What Are Trust Accounting Disputes?
Trusts are extremely useful estate planning tools, allowing us to leave a lasting legacy for friends and family. But they rely on the fiduciary duties and responsibilities of Trustees.
Among those duties is the requirement to provide clear and up-to-date trust accounting. From expenses to asset sales, every Trust beneficiary has the right to be informed of the Trust’s account.
Failure to provide this information adequately and on time may be a breach of the Trustee’s fiduciary duties.
In these scenarios, a Trust accounting dispute may arise. This is when a beneficiary files a lawsuit claiming that the Trustee has failed to meet their fiduciary duties. Various outcomes may then follow, including the Trustee’s removal.
What is a Trustee?
A Trustee is a person who has been granted control or power of the administration of a Trust. They have a legal obligation to do so by following the Trust’s instructions and in the best interest of the beneficiaries. The Trust’s creator usually selects trustees.
What is a Beneficiary?
A beneficiary is a person who is eligible to receive distributions from a trust or will. In some trust administrations, beneficiaries will have access to different information.
What Trust Accounting Duties Must be Met?
A Trustee must inform the beneficiaries and give them a transparent tracking of the trust. Without this requirement, a Trustee could act irresponsibly without anyone knowing. This duty is a fundamental part of being a Trustee.
Florida’s trust code states, “the trustee shall keep the qualified beneficiaries of the trust reasonably informed of the trust and its administration” and “trust accounting must be a reasonably understandable report from the date of the last accounting”.
This means a Trustee must provide each beneficiary of an irrevocable trust with the trust’s accounting from the date that they became active as a Trustee.
Informing and providing this information must be annual, upon the termination of the trust or when there is a change of Trustee.
Florida Trust Accounting Requirements:
Florida Statute 736.0813 explains a Trustee must provide:
- Written notice of the acceptance of the Trust within 60 days and the full name and address of each Trustee.
- A statement identifying the trust, the Trustee and the time period covered by the accounting documents.
- All records of cash and property transactions during the accounting period. This includes any compensation paid to the Trustee and their agents.
- All gains and losses, receipts and disbursements must be provided.
- The value of any assets at the close of the accounting period. This includes an asset acquisition value or carrying value and the current estimated value.
- Any name changes in investment holdings, change of custodial institution, stock splits or adjustments to carrying values.
- A complete copy of the trust instrument upon reasonable request of a qualified beneficiary.
How to Make a Trust Accounting Dispute?
If you have been denied or delayed accounting information or you notice any irregularities, then you should contact a Trust accounting dispute attorney as soon as possible.
You must have expert legal representation in an accounting action. An attorney will help study the accounting provided and determine if it’s accurate. From subpoenaing bank records to conducting depositions, they’ll sniff out any problems with the financial reporting before using their expertise to fight for your rights in court.
Ultimately, it may be investigated and decided upon by a Court of law. If a Trustee is found to have abused their power, then a court could issue a personal surcharge against the Trustee. This would hold them liable for the damage and losses they’ve inflicted.
Alternatively, a Trustee may prove their actions were in the best interest of the beneficiaries under the circumstances. Or show that there was simply a lack of care or incompetence due to complexities or poor professional assistance.
Potential Trustee Removal
In some circumstances, Trust accounting disputes may lead to the beneficiaries calling for the removal of the Trustee.
In Florida, the courts will remove a Trustee with significant supporting evidence and a strong reason.
A failure to provide accounting may signal a cover-up of further wrongdoing and breach of fiduciary duties, including:
All Trustee decisions and actions must be made in the best interests of all the beneficiaries. If any dealings or distributions were done in the Trustee’s favor, then this may be a cause for removal.
Mismanagement of Trust Assets
A Trustee should seek the growth of the Trust’s asset value. If assets are wasted or devalued, then this may be a breach of fiduciary duties.
A lack of accounting could be an attempt to hide fraudulent behavior. Fraud may have occurred if a Trustee has been self-dealing or trading assets for self-interest or to harm the beneficiaries.
Trustee Defense for Accounting Disputes
Alternatively, if you’re a Trustee facing accounting allegations, you should contact a Trust accounting dispute. Whether there has been a misunderstanding or error, Trustees have the burden of proof to establish their actions were fair and reasonable.
Every Trustee being accused of any breach should be aware these accusations are serious and penalties can be severe. Legal counsel is highly advised.
Contact A Florida Trust Accounting Dispute Attorney
If you or any other beneficiaries haven’t been informed or provided with accounting information, or you notice mismanagement in the accounting, then you should contact a Florida Trust accounting dispute attorney as soon as possible.
Gathering the evidence, paperwork and taking the appropriate legal action is complicated and requires the legal expertise of a lawyer.
Battaglia, Ross, Dicus & McQuaid, P.A. is U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With award-winning experienced attorneys, they give you the best chance of protecting your family’s trust.
Schedule a free consultation today to get started or to get any questions answered.