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Litigation Over Trust Accountings

Florida law mandates that a trustee keep the qualified beneficiaries of a trust reasonably informed of the trust and its administration. Fla. Stat. § 736.0813. This imposes a duty on the trustee to provide a trust accounting annually to each qualified beneficiary of an irrevocable trust. A trust accounting is required to include information regarding significant transactions affecting the trust administration during the accounting period, compensation paid to the trustee, gains and losses realized during the accounting period, and, to the extent feasible, the value of trust assets, among other things. Fla. Stat. § 736.08135. If the trustee fails to provide annual accountings to the qualified beneficiaries, the qualified beneficiaries may have a breach of trust action against the trustee. Fla. Stat. § 736.1001. However, if the trustee has provided the qualified beneficiaries with a trust disclosure document (including an accounting), then there may be a statute of limitations that affects the qualified beneficiaries’ claim against the trustee. If the trustee has provided an accounting, and the qualified beneficiary believes he has a cause of action based on that accounting, then the qualified beneficiary must make an objection within 6 months. Fla. Stat. § 736.1008.

The Third District Court of Appeal recently heard a case involving the time limitation for bringing a claim that a trustee has failed to provide a beneficiary with an accounting. See Taplin v. Taplin, 88 So. 3d 344 (Fla. 3d DCA 2012). In Taplin, a father, Martin, created three trusts in 1981 for the benefit of each of his three children, Andrew, Jennifer, and Kristopher. Martin and another individual were appointed as co-trustees of the trusts. Andrew, who was 12 years old when the trusts were created, brought a lawsuit against the co-trustees, alleging, among other things, that they failed to fully and properly account for the assets of the trust. Andrew alleged that he had never received a trust accounting. The trustees sought to have the case dismissed under Florida Statute § 737.307 (which is now § 736.1008), imposing either a 6-month or 4-year statute of limitations. The court noted that a precondition to the commencement of either limitation is the receipt by the beneficiary of an account or a statement. The court also noted that at common law, trustees could not be shielded by a statute of limitations, and that the common law would apply (i.e., there would be no statute of limitations), unless the trustee met the requirements of Florida Statute § 737.307 by providing an account or statement. The Third District Court of Appeal held that the trustees never invoked any of the triggers contained in Florida Statue § 737.307 that would result in the application of a statute of limitations, and that the qualified beneficiary could proceed with a breach of trust action against the co-trustees for failure to provide the accountings mandated under Florida Law.

If you are a trust beneficiary and have not received the accountings that are mandated by Florida law, please do not hesitate to contact the law offices of Chepenik Trushin, LLP. The experienced attorneys at Chepenik Trushin are ready, willing, and able to assist you in understanding your rights as a beneficiary.

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