Can a Florida Judge Order an Investigation into a Trustee Without Warning?

Special needs trusts are a legal tool used to help individuals retain their eligibility for public assistance programs like Medicaid, which impose strict income and asset limits. In some cases, it may be impractical to establish a dedicated special needs trust for a single beneficiary. So instead, a Florida court may authorize transferring certain assets into what is known as a pooled special needs trust, which is basically a trust where a single trustee oversees the assets of multiple individuals.

Florida Appeals Court: Judge Had No Authority to Order Independent Investigation of Trustee

A trustee is subject to removal or investigation if there is proof they misappropriated a pooled special needs trust’s assets. But the trustee still retains certain basic due process rights. For example, the Florida Second District Court of Appeals recently quashed a judge’s decision to order an investigation into a trustee without so much as giving notice to the trustee.

According to the Second District’s decision in Williams v. Bambery, the petitioner in this case served as the guardian for a female adult ward. While serving as guardian, a judge approved joining the ward’s assets into a pooled special needs trust. The guardian also served as the trustee.

In 2022, the court discharged the trustee from his role as guardian. A new guardian then filed a petition “expressing concern” that the trustee had misappropriated the ward’s assets. The new guardian therefore sought permission to withdraw the ward’s assets from the pooled special needs trust and deposit in a different trust. The trial court approved these requests. The trustee complied with the court’s order and thereafter had no further involvement in the ward’s affairs.

But five months later, the trial court, acting on its own initiative, issued a new order appointing the Florida Inspector General’s office to “investigate the actions” of the trustee. The trustee then filed a petition with the Second District, asking it to quash the trial judge’s order.

The Second District granted the trustee’s petition. The appellate court noted that none of the parties to the original proceeding ever asked the trial court to order an outside investigation. More to the point, the trial judge had no lawful basis for making such an order. The judge expressed “concerns” over the financial management of the trust, but as the Second District noted, “judicial concern, understandable as it may be, does not confer judicial power.” In other words, the trial court acted without jurisdiction.

Contact a Florida Trust Litigation Attorney Today

There are a number legal avenues available for a trust’s beneficiaries and other interested persons to take action against a trustee who is suspected of not performing their duties as required by law. An experienced Pompano Beach trustee performance and actions lawyer can review your case and advise you of your options. Contact the offices of Mark R. Manceri, P.A., Attorney at Law today at 954-491-7099 to schedule an initial consultation with a member of our team.

Source:

scholar.google.com/scholar_case?case=6229933332562697192