1. A trustee is responsible for protecting trust assets and carrying out the settlor’s intentions.
2. Trustees may need to hire professional experts, including attorneys, to fulfill their duties.
3. Trustees are typically allowed to use trust assets to pay for attorney fees, but conflicts may arise when an attorney is hired to defend against allegations brought by trust beneficiaries. – Florida law recognizes the conflict between a trustee’s power to use trust assets and beneficiaries’ right to be protected.
– Florida Statutes, § 736.0802(10) guides a trustee’s ability to use trust assets to pay attorney’s fees.
– The statute reaffirms a trustee’s authority to pay its attorney’s fees from trust assets without court authorization, with the exception of a notice to beneficiaries in certain situations.
– Florida law favors trustees being able to use trust assets for trust purposes, but also allows for prevention or reversal of payments in cases of breach of trust. – The revised Florida Statutes, § 736.0802(10), went into effect on July 1, 2016, with the principal notice and prohibition purposes retained but with the statute entirely rewritten.
– Under the old statute, if a trustee paid attorney’s fees or costs before an order was entered on the motion for prohibiting payment, the trustee and the trustee’s attorneys could be subject to remedies including disgorgement and refund. However, under the new version, it is much less clear where the returned fees and costs should come from.
– The new version of the statute provides that if a court finds a reasonable basis for a breach of trust, it may enter an order compelling the return of attorney fees and costs to the trust, but it does not specify from whom the funds should be returned. 1. The Fourth District Court of Appeals may not allow a request for disgorgement under the new statute to reach the attorney for the trustee, as seen in the case of Simmons v. Estate of Baranowitz.
2. The Court held that a petition for disgorgement of excessive fees paid to a personal representative and the personal representative’s attorney could not reach the attorney for lack of personal jurisdiction.
3. The Court recognized its authority to review the propriety of compensation paid to a personal representative’s employee and order refunds, but the removal of explicit language in the new statute suggests that these remedies may not apply to attorneys for trustees subject to refund orders.
4. The new statute provides clarity on the circumstances triggering the statute’s mitigation of a trustee’s authority to pay its attorneys.
5. The new statute defines the term “pleading” as a pleading as defined in Rule 1.100 of the Florida Rules of Civil Procedure. 1. Trustee can use trust assets to pay for attorney fees or costs for a claim or defense of breach of trust without approval or court authorization, but must notify qualified beneficiaries beforehand.
2. Statute distinguishes between a mere factual allegation and a properly brought claim or defense for breach of trust, as indicated in Boca Burger, Inc. v. Forum, 912 So. 2d 561,567 (Fla. 2005).
3. Changes to the statute may lead to uncertainty about the compensation of attorneys, potentially leading to litigation.
https://www.pfhglaw.com/who-pays-changes-to-%c2%a7-736-080210-florida-statutes-2016-raise-more-questions/
Leave a Reply