Florida Estate Planning Lawyer Blog
Today I received a copy of a recent Florida’s 4th District Court of Appeal dealing with a remainder beneficiary and a the ability to demand an accounting from a revocable trust before the death of a grantor. John J. Pankauski Sent me a well-written summary of the Case from October 26, 2016 which I have adapted for the purpose of this blog. The Case ruling stated that a remainder beneficiary of a Florida trust has no right to a trust accounting, when requested post-death, for the time period of the grantor’s life, absent breach of trust allegations. This was a revocable trust which became irrevocable upon the death of the grantor/settlor.
In Hilgendorf v. Estate of Coleman, the grantor or the person who created the trust was alive, competent, and was acting as her own trustee of her revocable trust. During grantor’s life, she was did not remain the trustee and a successor trustee took over the management of the trust. It appears that the grantor still continued to direct the actions of the successor trustee and to “run” things. The grantor never requested an accounting from the successor trustee during her lifetime. After the grantor passed away, the PR or executor of the decedents estate, who was also a beneficiary, requested an accounting for the time period when the grantor was alive and the when the trust was revocable.
Under the very limited facts of this case, the trustee was not required provide an accounting to the PR or the contingent beneficiary at the time:
- The trust terms did not require an accounting (whatever that means) – many of our trusts require an accounting when a successor trustee becomes a trustee
- The grantor (settlor) never requested accountings during her lifetime
- There was no showing of any breach of fiduciary duty on the part of the trustee.
Whether one is entitled to a pre-death accounting of a revocable trust is a question of law which is subject to the de novo standard of review. See Corya v. Saunders, 76 So. 3d 31 (Fla. 4th DCA, 2011)
In this Hilgendorf case, Hilgendorf just sued to get an accounting. She did not allege that there was mismanagement, or a violation of the trust terms, or a breach of fiduciary duty. This, in the eyes of the 4th, was fatal and had the suit included counts alleging a violation of the trust terms, or breach of a fiduciary duty the outcome would have likely been different.
The 4th DCA was unimpressed that Hilgendorf merely raised a general right to an accounting, which was, denied. The 4th DCA cited the general principle that there is no duty to render accountings to a contingent remainder beneficiary while a trust remains revocable. That’s just the statute. Then the 4th DCA said “there is no authority to impose the duty of rendering an accounting retroactively after the settlor/grantor is deceased and the trust becomes irrevocable, absent any claim of breach of fiduciary duty in carrying out the terms of the trust.”
If the trustee was stealing money before the settlor’s death, a remainder beneficiary, can’t see that after the death of the settlor. (Unless you include that in the suit by alleging that there was a breach of fiduciary duty or a violation of the trust terms.) The court is saying you cant have an accounting if the grantor does not raise an objection during their life, the terms of the trust do not provide for an accounting, or you don’t allege that something was wrong.