The Revocable Trust as Beneficiary of the Estate and the Effectiveness of Full Waiver Forms

The article discusses the legal steps to take when administering an estate with a trust as a beneficiary. It highlights the potential conflict of interest if the person in charge of the estate is also the trustee of the trust. It explains the importance of providing all information to the trust beneficiaries. It uses the example of a widow who has a trust and a will, and her friend is in charge of both. This friend wants to know the important issues to consider for the estate administration. In Florida, beneficiaries and interested people need to be informed about the administration of an estate. In this case, the trustee of a trust, Friend, cannot act on behalf of the trust beneficiaries, Sister, Daughter, and Son, because of a conflict of interest. Friend, as the personal representative, must act in the interests of the beneficiaries. The beneficiaries of the estate are Sister, Daughter, and Son, and they should receive important documents about the estate administration. Friend, as the trustee of the trust, needs to give Sister, Daughter, and Son important paperwork about the estate, like how the money is being managed and a petition to close the estate. Friend doesn’t want to do this and prefers to have the beneficiaries sign a form saying they’re okay with closing the estate without seeing the paperwork. She thinks it will be too expensive and take too much time to prepare the paperwork. Friend wanted to sign a paper to skip a final review of the trust’s finances and to avoid a legal process to finish the trust’s duties. But, only people with a stake in the trust can do that. Also, because Friend has a conflict of interest, she can’t sign for the trust. In the end, everyone involved will have to sign papers to finish the trust properly. Before the estate is closed, Friend should provide Sister, Daughter, and Son with information about the court’s order discharging the personal representative. This order releases the personal representative and can prevent any legal action against them individually. However, there have been cases where beneficiaries were still able to sue the personal representative for not fulfilling their duties, even after the order of discharge. This is because the personal representative failed to disclose important information about the estate. So, Friend should make sure to communicate all necessary information to Sister, Daughter, and Son before closing the estate. Trustees have a duty to be fair and tell beneficiaries all important information when dealing with them. A new law in Florida says that beneficiaries have six months to take legal action against a trustee for breaking this duty, but only if they receive a document that explains the problem and a notice about the time limit. If they don’t, they can still take action. If the beneficiaries sign a full waiver form without getting any information about the probate process, and the personal representative (Friend) later does something wrong with the estate’s money, the beneficiaries might not be able to sue the personal representative for breaching their duty. This is because the waiver form says the beneficiaries agree not to complain about how the personal representative has handled the money. So, it’s really important for the beneficiaries to understand what they’re signing and get all the information they need about the estate. In this situation, the author doesn’t think that Friend can use a discharge order to protect themselves from being sued for not following the rules for managing the estate. Even though the waiver form said the beneficiaries have the right to get a report of what happened with the estate, it didn’t say that if they signed the form, they couldn’t sue if the rules weren’t followed. It seems like Friend should have given the beneficiaries all the important information about what happened with the estate. Even though Friend might have protected themselves by giving the beneficiaries information about the trust, it doesn’t seem like that would stop them from being sued as the personal representative of the estate. An attorney advises a person who is both the personal representative of an estate and the successor trustee of a trust. The attorney must be aware of conflicts of interest between the estate and the trust. If the personal representative wants the beneficiaries to waive their right to challenge the administration of the estate, they must provide all estate information to the beneficiaries. This includes all financial transactions and details about how the estate’s assets are being distributed. If the personal representative doesn’t do this, they could still be sued by the beneficiaries even after receiving a discharge from their duties. John Randolph is a lawyer who specializes in trust and estate matters. He is highly qualified, with certifications in wills, trusts & estates and tax law, and he is also a certified public accountant.

Source: https://www.floridabar.org/the-florida-bar-journal/the-revocable-trust-as-beneficiary-of-the-estate-and-the-effectiveness-of-full-waiver-forms/