ShuffieldLowman’s Alex Douglas was recently featured on The Florida Bar Podcast to speak about the latest elder law and estate planning updates. Listen to this episode to hear about qualified beneficiaries, homestead issues, guardianships, irrevocable trusts, and even estate planning for pets. Alex practices in the area of fiduciary litigation with extensive experience in trust, probate and guardianship litigation.

To listen to the podcast visit the Legal Talk Network website:  https://legaltalknetwork.com/podcasts/florida-bar/2019/06/florida-bar-annual-convention-2019-elder-law-and-estate-planning-updates/

ORLANDO, FLORIDA – Six ShuffieldLowman partners were recently selected as 2019 Legal Elite attorneys by Florida Trend magazine. The “Legal Elite” designation represents fewer than 1.2% of the active Florida Bar members who practice in the state. The ShuffieldLowman partners honored are Stephanie L. Cook, Scott A. Cookson, Alexander S. Douglas II, Matt G. Firestone, Heidi W. Isenhart and Gregory W. Meier.

   Florida Trend magazine collects ballots from Florida Bar members, asking lawyers to name attorneys whom they hold in the highest regard and would recommend to others. The results of the annual survey are published in Florida Trend magazine.

   Cook and Douglas both practice in the area of fiduciary litigation, with extensive experience in trust, probate and guardianship litigation. Both Cook and Douglas are active members in the Florida Bar Real Property and Probate Section and serve on several committees that focus on new developments in probate, trust and guardianship law. Cookson is an experienced attorney in the areas of real estate, land use and local government law. Firestone practices in the areas of commercial and other civil litigation with an emphasis on aspects of association law. Isenhart focuses her practice in the areas of elder law, Medicaid planning, guardianship, probate and trust administration, estate planning and special needs trusts. Meier practices in the areas of estate planning, probate, corporate law, partnerships and taxation.

   ShuffieldLowman’s five offices are located in Orlando, Tavares, DeLand and Port Orange. The firm is a 40 attorney, full service, business law firm, practicing in the areas of corporate law, estate planning, real estate and litigation. Specific areas include tax law, securities, mergers and acquisitions, intellectual property, estate planning and probate, planning for families with closely held businesses, guardianship and elder law, tax controversy – Federal and State, non-profit organization law, banking and finance, land use and government law, commercial and civil litigation, fiduciary litigation, construction law, association law, bankruptcy and creditors’ rights, labor and employment, and mediation.

The Orlando Business Journal’s readership recently voted ShuffieldLowman the area’s best local law firm.

Earlier this year, OBJ readers were invited to submit votes in several categories in Orange, Seminole, Osceola, Lake, Brevard and Volusia counties for the 2019 Readers’ Choice Awards.  Thousands of readers participated and then the top finalists in each category went head-to-head in an OBJ Business Pulse poll.  The results will be published in the OBJ’s July 5 weekly edition and is already posted online at OrlandoBusinessJournal.com.

ORLANDO, FLORIDA – William “Bill” R. Lowman, Jr., Heidi W. Isenhart, Alexander S. Douglas, II, and Stephanie L. Cook, all partners with the law firm of ShuffieldLowman, have been selected as 2019 Florida Super Lawyers.

     Super Lawyers, owned by Thomson Reuters, recognizes attorneys who have distinguished themselves in their legal practice.  The selection process is multi-phased and rigorous.  Peer nominations and evaluations are combined with third-party research and validation of the attorney’s professional accomplishments.  The final published list represents five percent of the total lawyers in the state of Florida.

     A founding partner of the firm, Lowman’s practice areas include corporate law, mergers and acquisitions, estate planning, high net worth family planning, intellectual property, securities, tax advice, and non-profit law.

      Isenhart practices in the areas of elder law, Medicaid planning, guardianship, probate and trust administration, estate planning and special needs trusts.

     Douglas and Cook both practice in the area of fiduciary litigation, with extensive experience in trust, probate and guardianship litigation. 

     ShuffieldLowman’s five offices are located in Orlando, Tavares, DeLand and Port Orange. The firm is a 42 attorney, full service, business law firm, practicing in the areas of corporate law, estate planning, real estate and litigation. Specific areas include tax law, securities, mergers and acquisitions, intellectual property, estate planning and probate, planning for families with closely held businesses, guardianship and elder law, tax controversy – Federal and State, non-profit organization law, banking and finance, land use and government law, commercial and civil litigation, fiduciary litigation, construction law, association law, bankruptcy and creditors’ rights, labor and employment, and mediation.

Once a trustee accepts trusteeship of a trust, there are certain fiduciary duties to the trust beneficiaries, according to the Florida Trust Code. Some of these fiduciary duties cannot be modified, regardless of how the trust is written.

What does it mean to accept a trusteeship? A written document expressly acknowledging his acceptance is the most obvious example. However, trustees should understand that acceptance of trusteeship can occur in other ways too.  This means a trustee is “on the hook” to comply with his fiduciary duties if he accepts trusteeship by substantially complying with a method of acceptance provided in the terms of the trust, or if the trust does not provide a method for acceptance of trusteeship, if he accepts delivery of trust property, exercises powers or performs duties as a trustee, or otherwise indicates acceptance of trusteeship. 

Once a trustee has begun acting as a trustee, he has a mandatory duty to administer the trust in good faith and in accordance with the terms and purposes of the trust, and in the interests of the beneficiaries.  The Florida legislature made a recent change to the definition of “interests of beneficiaries” to make it clear that the settlor’s wishes, as expressed in the trust, should be considered. This means that beneficiaries generally cannot circumvent a settlor’s wishes by claiming that their interest is best served some other way. For example, if a settlor expressed in the trust that he only wants a beneficiary to receive lump sum distributions at certain lifetime milestones (e.g., graduating from college, getting married, etc.), the beneficiary cannot alternatively demand trust distributions on a monthly basis.

Similarly, a trustee’s mandatory duty of loyalty requires him to administer the trust solely in the “interests of the beneficiaries,” and to avoid conflicts and self-dealing. Actions by a trustee involving a conflict of interest that are not specifically authorized by the trust or the Florida Trust Code, or otherwise approved by the Court, are voidable and may subject a trustee to liability to the trust beneficiaries.

Another fiduciary duty owed by a trustee is the duty of impartiality.  This does not necessarily mean that all beneficiaries should be treated equally.  Rather, the trustee should consider the facts and circumstances of each request or action, as well as the terms in the trust, when deciding the best way to proceed.  A trustee should not favor one beneficiary over another in conflicts that are merely between beneficiaries and do not relate to the validity of the trust.  In the case of Barnett v. Barnett, 340 So. 2d 548, 550 (Fla. 1st DCA 1976), a trustee’s litigation fees were denied because the trustee took a partisan stance and argued the side of one or more of the claimants.

In the event someone contests the validity of the trust, the trustee has an obligation to defend the trusts’ validity surprisingly, while there is no statute. A trustee also has a duty to keep clear, distinct, and accurate records.  As part of this duty, a trustee should also make sure that he is keeping trust property separate from his own property. If inadequate recordkeeping results in any obscurities or doubts, all presumptions are against the trustee. It is important for trustees to document each decision made and why the decision was made. 

Trustees should also consider making and keeping records simultaneously with the actions taken to avoid any doubt concerning accuracy. If a trustee is seeking compensation, he or she must keep accurate time records. If the trust does not specify how the trustee should be compensated, the trustee is entitled to compensation that is reasonable under the circumstances. The burden will be on the trustee to show the reasonableness of his or her fees.

If there is a lack of documentation, there is a presumption of impropriety against the fiduciary. Even saying that a hurricane blew away your records is not an excuse! Really! In Traub v. Traub, the Court held that, because the trustee failed to keep accurate records, even though the records were allegedly destroyed, the burden shifted to the trustee to show that the trust money expended was proper.

Next, a trustee has a duty to keep beneficiaries informed regarding the administration of the trust and to provide accountings. Initially, a trustee must notify qualified beneficiaries of the existence of the trust, identify himself as the trustee, and explain the beneficiaries’ right to receive trust accountings. Other mandatory duties of the trustee are to provide a complete copy of the trust and to account to qualified beneficiaries by providing a trust accounting at least once annually. Additionally, if a qualified beneficiary of an irrevocable trust requests relevant information about the assets, liabilities, or particulars relating to the trust administration, a trustee has a mandatory fiduciary obligation to provide the requested information. However, as long as a trust is revocable, the trustee’s duty is only owed to the settlor (the person who made the trust) of the trust.

Another important fiduciary duty is the duty of prudent administration.  There is no “winging it” when it comes to trust administration.  A trustee must administer the trust as a prudent person would, by considering the purposes, terms, distributions, requirements, and other circumstances of the trust.  Trustees must exercise “reasonable care, skill, and caution.”  If a trustee is unsure whether certain action (or inaction) is the best choice, he should investigate and seek all information necessary to make an informed decision.  This is good advice even if all beneficiaries consent to the action or inaction– trustees still need to make sure their discretionary actions make sense and are in the best interest of the beneficiaries as defined by the trust.

During the course of prudent administration of the trust, the trustee should only incur reasonable expenses.  A trustee should consider what is reasonable for him to do on his own, versus what is better for a professional to do.  If a trustee is hiring an outside vendor to perform a task (e.g., accountants, attorneys, etc.), he should negotiate a reasonable fee for the work needed. If a trustee has his own set of special skills, he will be expected to use that set of skills. A corporate fiduciary will be held to a higher standard than an individual.  Fair compensation should be based upon the trustee’s particular skills.

When it comes to hiring third parties, a trustee must choose wisely. He should investigate the background of all professionals and agents hired, including attorneys, accountants, investment advisors or other agents.  Generally, a trustee may act on the recommendations of such persons without independent investigations.

Finally, when it comes to claims of creditors, a trustee has a mandatory obligation to file a notice of trust upon the settlor’s death.  A trustee must also pay expenses and obligations of the settlor’s estate, in the event the assets of the settlor’s estate are not sufficient to satisfy valid creditors’ claims. 

Navigating this process can get complicated, so should you have any questions regarding the duties of a trustee, feel free to contact one of our highly-qualified and experienced trust attorneys.   

Learn about protecting yourself as a trustee in our other blog post: How to Protect Yourself as a Trustee.

In the event that a problem develops in the trust administration of an irrevocable trust (a trust that cannot be amended by the person who created the trust), or if there is an ambiguity in the trust document itself, or there are allegations by the beneficiaries that the trustee is not serving the interest of the beneficiaries, the first safe harbor to consider  is a non-judicial settlement agreement.  This is an agreement that is signed by the trustee and the beneficiaries that have a present income or beneficial interest in the trust, and from the beneficiaries that get the rest of the trust (i.e. the “residual” or “remainder” beneficiaries) when the persons who have the present income or beneficial interest die (these persons are also called the “qualified beneficiaries” under the trust code). You may not use a non-judicial settlement agreement to produce a result not authorized by other provisions of Florida’s Trust Code, or that could not be properly approved by the court.  These types of agreements may cover:

1. The interpretation or construction of the terms of the trust;
2. The approval of a trustee’s report or accounting;
3. The direction to a trustee to perform, or refrain from performing, a particular act; or
4. The liability of a trustee for an action relating to the trust.

Another safe harbor is to obtain the consent and release from all of the qualified beneficiaries.  When obtaining a consent and release from the qualified beneficiaries, the trustee should give full disclosure of the relevant facts.  Alternatively, a trustee may ask the court to provide the trustee direction which is also called “declaratory relief” or “declaratory action”. Any interested person can invoke the court’s jurisdiction to obtain declaratory relief, and the proceeding can relate to construction, validity, administration, or distributions of trust.  A declaratory action can also be utilized to have the court review a trustee’s fees, review and settle interim trust accountings or final trust accountings, determine any right or duty of the trustee, seek instruction by the trustee, or determine any other matters involving trustees or beneficiaries.

            For instance, let’s say a family relative dies and leaves a trust for you and your siblings so you can pursue a “college or higher education degree” and the bank is the trustee. Let’s also assume that your child wants to go to a technical school to become a mechanic and wants the trust to pay for this education. The trustee may raise a concern that the technical school will not result in a “college degree” and therefore could file an action with the court to ask the court to interpret the trust or permit the trustee to use trust funds to pay for the technical training. The trustee alternatively could obtain the written consent of all of the trust’s qualified beneficiaries (assuming they are of age or have their parent’s consent) to use the trust funds to pay for the technical training.

Finally, a trustee who is considering exercising a discretionary power may seek judicial approval before acting if there is concern that a beneficiary may object. In such circumstances, the trustee should file a petition that describes the proposed exercise or non-exercise of the discretionary power and sets forth sufficient information to inform the qualified beneficiaries of the reasons for the proposal, the facts upon which the trustee relies, and explains how other beneficiaries will be affected. The burden is then on the objecting beneficiary to show why the proposed exercise or non-exercise of the power by the trustee is an abuse of the trustee’s discretion.

For example, if a trustee is allowed to distribute trust funds in any amount that the trustee deems just and proper for the benefit of three beneficiaries, and one beneficiary has a greater financial need because of a disability than the other two, the trustee before making the distribution can seek judicial approval to favor the beneficiary that has more financial needs over the other two beneficiaries. Otherwise, without court approval or consent of the beneficiary, the trustee could be exposed to allegations that the trustee inappropriately favored one beneficiary over another and otherwise that the trustee breached his or her duty of good faith.

The facts and circumstances governing trust administrations differ on a case-by-case basis.  ShuffieldLowman has an experienced team of trust attorneys that can guide trustees through the trust administration process to ensure they are complying with their mandatory fiduciary duties. Our attorneys can also assist trust beneficiaries with understanding their rights and recognizing breaches of fiduciary duty by a trustee who has veered off course.

Learn more about the duties of a trustee in our blog post: Understanding the Fiduciary Duties of a Trustee.

     ORLANDO, FLORIDA – ShuffieldLowman attorney Daniel B. Harris was recently elected as Vice-Chair of the Central Florida Hillel, Inc., effective July 2019 for a one-year term. Harris has been an active supporter and leader of Central Florida Hillel. He currently serves as a member of the Executive Committee and chairs the Governance, Nominations and Human Resources Committees.

     In 2001 the Jewish Federation of Greater Orlando established Central Florida Hillel to serve Jewish college students.  Central Florida Hillel is the center for Jewish life on campus and the home to Jewish young adults aged 18-29 in Central Florida. Serving the Jewish students at the University of Central Florida, Rollins College, Embry-Riddle Aeronautical University and the Barry College of Law, by offering programmatic opportunities that connect students to each other, to their schools, and to the greater Jewish community.  

     Harris practices in the areas of estate planning, business succession planning, and tax law, representing clients in probate matters, including complex tax planning. He is a former legal assistant with the Eighth Judicial Circuit’s Probate Division in Gainesville, Florida, with detailed estate planning knowledge from the perspective of judicial proceedings. In addition, his experience includes representing clients in connection with creating and maintaining specifically tailored estate plans, various corporate matters related to closely held entities, probate and trust litigation, as well as tax controversy cases before the Internal Revenue Service and the Florida Department of Revenue.

      A law graduate of the University of Florida Levin College of Law, he holds an Estates & Trusts Practice Certificate, and the Environmental & Land Use Law Certificate. He also holds an advanced law degree, LL.M. in Taxation, from the University of Miami School of Law. Harris has authored articles on taxation, published by The Florida Bar, and he has served as a judge at the National Tax Moot Court competition sponsored by The Florida Bar Tax Section.

     ShuffieldLowman’s five offices are located in Orlando, Tavares, DeLand and Port Orange. The firm is a 40 attorney, full service, business law firm, practicing in the areas of corporate law, estate planning, real estate and litigation. Specific areas include, tax law, securities, mergers and acquisitions, intellectual property, estate planning and probate, planning for families with closely held businesses, guardianship and elder law, tax controversy – Federal and State, non-profit organization law, banking and finance, land use and government law, commercial and civil litigation, fiduciary litigation, construction law, association law, bankruptcy and creditors’ rights, labor and employment, and mediation.