Do You Need Specific Language to Create a Trust in Florida?

A trust is a legal arrangement where a Settlor or Grantor transfers property to a Trustee. The trustee then assumes a fiduciary duty to administer the trust property in the interest of a beneficiary. In Florida estate planning, we often use trusts to hold and distribute property outside of the probate process. Indeed, trust instruments are often lengthy, complex legal documents that must be carefully prepared by a qualified attorney.

Florida Woman Found in Breach of Trust Created by Divorce Settlement

At the same time, a trust does not necessarily require a written instrument. Nor does it need to be explicitly labeled a “trust.” Florida courts have found trusts to exist based on the conduct of the parties involved, even if none of them actually used specific words to that effect.

Consider this recent decision from a federal judge in Tampa, Lacava v. Oleksyk. This case involved a divorce rather than a probate estate. The defendant in the case signed a marital settlement agreement (MSA) with her ex-husband upon their divorce. The plaintiffs in this case are the ex-husband’s son and grandchild, respectively.

As is common in Florida divorce cases, the MSA provided for an equitable distribution of the former couple’s marital property. Among other provisions, the defendant assumed control of a 529 educational savings plan that had been established during the marriage for the benefit of the ex-husband’s grandchild. The defendant agreed to use the 529 funds to pay for her former step-grandchild’s college education, which she did initially. But after the grandchild called the defendant a “derogatory name,” she retaliated by stopping the tuition payments. That prompted the lawsuit.

The judge overseeing the case granted the plaintiffs’ motion for partial summary judgment as to the defendant’s breach of fiduciary duty. The judge explained that the undisputed facts of this case clearly demonstrated the defendant acted as a trustee over the 529 funds. The defendant and her ex-husband acted as settlors of the trust when they signed their MSA and assigned control of the 529 plan to the defendant.

The judge went on to note that as a trustee, the defendant did “not have unbridled discretion” when it came to administering the trust funds. The defendant had a duty to use the funds to pay the grandchild’s college tuition. The defendant could not shirk that duty just because the grandchild called her a bad name. Indeed, the judge said the defendant acted in “bad faith” by citing that as justification for her actions.

Contact Florida Trust Litigation Lawyer Mark R. Manceri Today

A good deal of trust and estate litigation in Florida involve allegations of breach of fiduciary duty. The reality is that anyone assuming a fiduciary responsibility, such as a trustee or the personal representative of a probate estate, have certain obligations that they must discharge regardless of their personal feelings or self-interest. If you are involved in a dispute over such issues and need advice or representation from a qualified Pompano Beach trust and estate litigation attorney, contact Mark R. Manceri, P.A., today to schedule a consultation.

Source:

scholar.google.com/scholar_case?case=18114148653852666509