Under Florida's new trust laws, generally, the Trustee of an irrevocable trust is required to keep beneficiaries of the trust reasonably informed about the trust and its administration. This article provides a simplified guide to Trustees and trust beneficiaries regarding the new trust law related to this duty to inform and account.

BENEFICIARIES DEFINED. This duty to inform and account under the new law is owed to a "qualified beneficiary" of an irrevocable trust. A "qualified beneficiary" is defined as any living beneficiary who currently receives trust income or principal or would receive trust income or principal if the current beneficiary's interest terminated.

REQUIREMENTS. To meet a Trustee's responsibilities to inform and account, the Trustee is required to do the following:

• Within 60 days after acceptance their position as Trustee of the trust, the Trustee shall give notice to the qualified beneficiaries of the acceptance of the trust and the full name and address of the trustee.



• Within 60 days after the date the Trustee becomes aware there is an irrevocable trust, whether by the death of the Grantor (person(s) who established the trust) or otherwise, the Trustee shall give notice to the qualified beneficiaries of the trust's existence, the identity of the Grantor(s), the right to request a copy of the trust instrument, and the right to accountings.



• Upon reasonable request, the Trustee shall provide a qualified beneficiary with a complete copy of the trust instrument, including amendments.



• A Trustee of an irrevocable trust shall provide a trust accounting, to each qualified beneficiary annually and on termination of the trust or on change of the Trustee.



• Upon reasonable request, the Trustee shall provide a qualified beneficiary with relevant information about the assets and liabilities of the trust and the particulars relating to administration.

REPRESENTATION. The new Florida trust law permits a person to act as a representative for another person (i.e., the beneficiary). Therefore, any notice, information, accountings, and reports sent to a representative have the same effect as those sent to the person being represented, and actions taken by a representative bind the beneficiary. There are several different categories of representation, including:

• Fiduciaries: This includes a guardian of the property, an attorney-in-fact, a Trustee or personal representative. Additionally, a parent may represent an unborn or minor child if no guardian of the property has been appointed.



• Virtual: If not otherwise represented, a minor, incapacitated, unborn, unascertainable, or un- locatable person may be represented by another person having a substantially identical interest.



• Court-appointed: The court may appoint a representative for a person the court determines is not otherwise adequately represented.

In each of the above situations, representation is precluded in matters as to which the representative has a conflict of interest with the person being represented. This restriction, however, does not apply to either of the following two remaining categories of representation:

• Powers of appointment: a holder of either a general or a special power of appointment may represent and bind objects and takers in default of the power. However, generally, a beneficiary with a power cannot represent others while the beneficiary is serving as sole Trustee.
  
  
• Grantor-designated: a Grantor may appoint or designate a person to represent and bind a trust beneficiary or to receive notices, information, reports, and accounts on the beneficiary's behalf with a few exceptions such as a designated representative who is also a Trustee may not represent or bind a trust beneficiary while serving in that capacity.

TRUST ACCOUNTING.
A trust accounting must be a reasonably understandable report from the date of the last accounting or, if none, from the date on which the Trustee became accountable, that adequately discloses the following information:

If you sold a home in Florida that received a homestead exemption during 2007 and you purchased a new home by January 1, 2008, you are eligible to transfer all or some of the benefit of the "Save our Homes" provision of the property tax law. In order to receive the benefit, you must apply with your county property tax appraiser no later than March 1, 2008.

To benefit from the new law, you must complete either form DR-501T or form DR-501R (for transfers between counties) with your homestead exemption application for 2008. If you have already applied for your 2008 homestead exemption, you should still qualify for the transfer and file the appropriate form with your county property appraiser's office by March 1, 2008.

Click here for copies of the forms. Click here for more information from the Florida Department of Revenue.

If you would like more details about qualifying for this benefit, please contact us.

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This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client.