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Taxation & Estate Planning

: Rubin on Tax

Court Retains Ability to Remove Trustee Regardless of the Terms of the Trust [Florida]

By Charles Rubin

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An irrevocable trust included provisions for the removal of a trustee by reason of the trustee's disability. A beneficiary brought an action to remove the trustee, but not based on the specific definition and removal provisions of the trust. Could the beneficiary use Trust Code provisions to remove the trustee when the trust instrument had different provisions? In a recent case, the trial court held that the terms of the trust required that removal could be based only on the terms of the trust.

While under the Trust Code the terms of a trust may prevail over the terms of the Trust Code, an exception to this rule exists under Fla.Stats. § 736.0105(2)(e) which provides that the provisions the trust instrument cannot override "the power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice." The Trust Code also includes other provisions specifically granting powers of removal to the court. The 3rd DCA, in reviewing the question, reversed the trial court decision based on these statutory provisions and existing case law and concluded:

. . .while the trust document may contain other and supplemental methods to remove a trustee, it cannot eliminate or curtail the probate court's power and responsibility under the Trust Code to remove a trustee when necessary in the interests of justice to protect the interests of the beneficiaries.

The 3rd DCA also noted that the standard for removal due to disability was NOT the same as the standard for imposing a guardian. The court noted:

[t]he standard for removal of a trustee under section 736.0706 of the Trust Code is less exacting than the standard for imposing a guardianship under section 744.331 of the Guardianship Code. Persons may lack the accounting, business, legal, or mental acumen to serve as trustees regarding the property of others even when their condition would not justify the imposition of a guardianship over them regarding their own property.

Wallace v. Comprehensive Personal Care Services, Inc., 45 Fla.L.Weekly D1318a, 3rd DCA (June 3, 2020)

Full post as published by Rubin on Tax on June 07, 2020 (boomark / email).