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The Florida Trust Administration process begins upon the death of the Grantor (individual who created the revocable trust). The Florida Revocable Trust will become irrevocable and the individual or entity designated to serve as the successor trustee will step into the decedent's place and administer the Florida Trust. The complexity of the Florida Trust Administration process will be based upon (i) the number and type of the decedent’s assets, (ii) the total value of the assets, and (iii) whether the Trust includes estate and tax planning provisions.
Acceptance of Trustee. Upon the death of the Grantor, the individual nominated is required to take steps to undertake his or her appointment as successor Trustee. This is accomplished by signing an “Acceptance of Trustee” and agreeing to administer the Trust pursuant to its terms.
Tax Id Number. Upon the Grantor’s death, a new “tax identification number” (TIN) must be obtained for the Florida Trust. It can no longer operate under the decedent's social security number.
Duties of a Trustee. A Trustee is a fiduciary and has a duty to act in good faith and in accordance with (i) the terms and purposes of the trust and (ii) the interests of the beneficiaries. This requires the Trustee to (i) provide all qualified beneficiaries with the Notice of Trust, (ii) a copy of the Trust instrument, and (iii) if requested, all beneficiaries with relevant information about the assets and liabilities of the Trust and the particulars relating to administration. In addition, a Trustee may be required to evaluate issues concerning discretionary beneficiary distributions.
Notice of Trust. The Successor Trustee should then file a Florida Notice of Trust as required by Section 736.05055, Florida Statutes. The Notice of Trust is filed with the court of the county of the Grantor's Florida domicile and the court having jurisdiction of the Grantor's Florida estate.
Initial Accounting. The successor Trustee should identify, take control of, and have the Florida and out-of-state Trust assets and property appraised. This information should be including on the initial accounting.
Creditors. Pursuant to Florida law, the Trust is obligated to pay for any legitimate expenses of the Grantor’s estate (if there are insufficient funds in his or her estate). Creditors can be ascertained by publishing a Notice to Creditors (Notice). The Notice should be sent via certified mail to any known creditors of the Grantor. Creditors will then have three (3) months after publication or thirty (30) days after actual receipt of the Notice to Creditors to file a creditor claim.
Taxes. The Trustee must then determine what, if any, tax returns (estate or income) must be filed and/or taxes paid on the decedent’s behalf. If the decedent estates value exceeds $5.25 million (if death occurred in 2013) a federal estate tax return (IRS Form 706) will need to be filed within nine (9) months of date of death with the Internal Revenue Service. Federal and state (Florida does not have a state income tax) income tax returns must also be filed for the estate and for the decedent. This additionally requires the Trustee to file an income tax return for each year the Trust continues to be administered.
Final Accounting. When all probate and trust creditors have been paid and all trust assets have been distributed, the Trustee should either (i) provide a final accounting for the trust; or (ii) get all beneficiaries to execute a waiver of final accounting. If the Trust has been court administered, the Trustee should obtain an order of discharge from the local Florida probate court.
Distribution of Assets. Once all creditors and taxes have been paid, the remaining Florida Trust assets can be distributed to the beneficiaries. If a distribution is made to a beneficiary, it is best to have the beneficiary sign a receipt for his or her partial or total distribution.
Marc J. Soss, Esquire
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