In Florida, a trustee is a fiduciary who has been entrusted with managing assets and property for the benefit of others, known as beneficiaries. The trustee’s role is essential in ensuring that a trust is administered correctly.  Therefore, one core responsibility of a trustee is the duty to account.

The duty to account is a legal obligation that requires trustees to provide an accurate and complete report of the trust’s activities. This includes any transactions or distributions made from the trust, any income or receipts earned by the trust, as well as any fees or expenses incurred. The trustee must maintain detailed records of all activities concerning the trust’s assets and provide periodic reports to the beneficiaries.

The Florida Trust Code (FTC) outlines the trustee’s duty to account. According to section 736.0813 of the FTC, a trustee must, at least annually, provide an accounting to each trust beneficiary and any other person who has the right to receive information about the trust. The accounting must include the following:

1. A statement of receipts and disbursements of trust principal and income during the accounting period, including the sources of receipts and the nature and amounts of disbursements;
2. A statement of the assets and liabilities of the trust, including the trust’s beginning and ending balances for the accounting period;
3. A listing of any property that has been sold or otherwise disposed of during the accounting period, including the sale price and the name of the purchaser;
4. A listing of any property that has been acquired during the accounting period, including the purchase price and the name of the seller; and
5. A listing of any fees or expenses incurred by the trustee during the accounting period, including the amount and the purpose of the fee or expense.

The trustee’s duty to account begins as soon as the trustee assumes control of the trust’s assets. The trustee must provide an initial accounting to the beneficiaries within 60 days of assuming control of the trust. After the initial accounting, the trustee must provide periodic accountings at least annually, unless the trust instrument specifies a different interval.

The accounting must be provided in a clear and concise format that is easy to understand. The trustee must also provide the beneficiaries with the opportunity to ask questions and seek clarification about any aspect of the accounting. If a beneficiary disagrees with the accounting, they must object.

If a trustee fails to fulfill their duty to account, they may be held liable for any damages or losses incurred by the beneficiaries. The court may also remove the trustee from their position and appoint a new trustee to manage the trust’s assets.

In addition to the legal obligation to account, providing regular accountings is also an essential part of building trust and maintaining good relationships with beneficiaries. By providing regular accountings, the trustee demonstrates transparency and accountability, which can help to prevent disputes and misunderstandings.

In conclusion, the trustee’s duty to account is a critical aspect of their role as a fiduciary.  Trustees must take their duty to account seriously and ensure that they provide accurate and complete accountings to the beneficiaries in a timely and transparent manner.

Whether you are a trustee and need guidance on Florida trust accounting requirements, or a beneficiary seeking to learn more about your right to a trust accounting, contact PFHG now for a complimentary consultation.