Multiple Trustees of a Florida Trust
Trusts are commonly used in Florida wealth and estate planning to protect assets, minimize tax liabilities, and ensure that assets are distributed according to the grantor’s wishes. In Florida, a trust’s grantor may identify two or more trustees to oversee the trust’s administration. However, having multiple trustees of a Florida trust can create complications that must be carefully considered.
Benefits of Having Multiple Trustees of a Florida Trust.
Having two or more trustees can provide several benefits.
- Shared responsibility: With multiple trustees, there is a shared responsibility for managing the trust. This can help prevent any one trustee from making unilateral decisions that could negatively impact the trust or its beneficiaries.
- Expertise: Each trustee can bring their unique expertise and experience to the table. For example, if one trustee has a background in finance, they could oversee the trust’s investments, while another trustee with legal expertise could handle any legal issues that arise.
- Continuity: If one trustee becomes incapacitated or passes away, the other trustees can continue to manage the trust without interruption. This can help ensure that the trust’s assets are protected and managed properly.
Complications of Having Multiple Trustees.
While having multiple trustees can provide many benefits, it can also create complications.
- Disagreements: With multiple trustees, there is a higher likelihood of disagreements or conflicts arising. This could be particularly problematic if the trustees are given discretion in making distributions or managing the trust’s assets. If there are only two trustees and they cannot agree, court intervention may be required to break the deadlock.
- Delays: If the trustees cannot agree, delays in managing the trust will result such as missed investment opportunities or delays in distributing assets to beneficiaries.
- Liability: Each trustee is personally liable for any errors or mistakes they make in managing the trust. This means that if one trustee makes a mistake that causes financial harm to the trust or its beneficiaries, the other trustees could also be held responsible.
How to Mitigate Complications with Multiple Trustees.
To mitigate the potential complications of having multiple trustees, there are several steps you can take:
- Choose trustees carefully: When selecting trustees, it’s essential to choose individuals who are trustworthy, reliable, and who are likely to get along.
- Establish clear guidelines: The trust agreement should establish clear guidelines for how decisions should be made, how disputes should be resolved, and what happens in the event that a trustee becomes incapacitated or passes away.
- Provide ongoing communication: Regular communication among trustees can help ensure that everyone is on the same page and that decisions are made efficiently.
- Consider a professional trustee: If managing the trust is complex or requires specialized expertise, it may be wise to consider a professional trustee who can manage the trust on behalf of the beneficiaries. Professional trustees, however, may be economically disproportionate to the overall value of the trust’s assets.
In conclusion, a Florida trust may have two or more trustees. While having multiple trustees can provide several benefits, it can also create complications. It’s essential for a grantor to carefully consider the potential issues and take steps to mitigate them. With proper planning and communication, having multiple trustees can be an effective way to manage a trust and ensure that assets are protected and distributed according to the grantor’s wishes. If you are interested in exploring whether a trust is an appropriate tool for your wealth and estate planning, contact the attorneys at Purcell, Flanagan, Hay & Greene, P.A.