When people want to ensure their families will be cared for after their deaths or when they are looking to better manage their properties, many Floridians consider establishing trusts. Essentially, this estate planning tool allows people to transfer ownership of assets to another person or institution; in some cases, without subjecting inheritances to estate taxes. Before choosing a trustee, or person to oversee the trust, it is important to understand the duties that he or she must perform.
According to Florida state law, trustees are required to deal impartially with beneficiaries and show them loyalty. The trustee must balance the interests of the income beneficiaries against those of the remaindermen, or beneficiaries who stand to inherit from the trust upon its dissolution. Further, trustees are required to make accounts to the trust beneficiaries, keeping them informed of any losses or growth.
When it comes to administering trusts, trustees are also expected to avoid conflicts of interest. This is particularly important when the trustee is also a beneficiary of the trust. In such cases, trustees are not permitted to favor themselves over or at the expense of any other trust beneficiaries. Even if they are also beneficiaries, trustees are expected to keep their personal assets separate from the trust assets, so they can maintain accurate records of what is going in and coming out of the trust accounts.
According to the CPA Journal, naming a trustee is an important decision. Grantors, or the creators of trusts, should choose someone who will exercise strong, independent, compassionate and fair judgment. People may consider naming a trusted family member, close friend, attorney, accountant or banking institution as trustees.