How does a trust administration in Florida work?

July 27, 2022
How does a trust administration in Florida work?

How does a trust administration work in Florida?

Florida trust administration.

Trust administration is the legal process that happens when the maker of a revocable living trust dies and a new trustee, called the successor trustee, takes over to carry out the trust's instructions. The successor trustee has a normal of important legal obligations. The successor trustee is required to correctly interpret and apply the terms of the trust for the benefit of the trust beneficiaries. If the trustee makes mistakes, the trustee can become liable for damages.

Here are some things the successor trustee must do:

  • Bring the original will to deposit with the Clerk of the Circuit Court in the county where the decedent (person who died) was domiciled.
  • Order death certificates.
  • Review the trust to determine how to manage the trust property.
  • Obtain a tax ID number (usually an EIN) for the trust.  This will be needed to file the trust tax return, in the event that the trust earns over $600.
  • A Notice of Trust is filed with the Clerk of the Circuit Court. If a probate case has been filed, it is filed in the probate case file.  If not, it is filed directly with the clerk to be indexed.
  • Evaluate and protect the trust assets.
  • Accounting must be performed for tax and trust management purposes. Gains, losses, income, and distributions must all be accurately tracked.

Trust administration is an import job and comes with a lot of responsibility. Many times, the trust will provide that successor trustees are entitled to reasonable compensation. Florida law does not specify how to calculate the "reasonable fee." It will vary based on the issues involved in administering the trust.  However, in general, a fee of between 1% and 3% would be typical.

A successor trustee can retain an attorney to help with the trust administration and the attorney's fee can be paid out of the trust as well. We help trustees fulfill their legal obligations so that beneficiaries are treated fairly and trustees avoid unnecessary liability.  Let us know if you need help with a trust.

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