Florida Banking June 2023

TRUST BANKING

BY STACY B. RUBEL, THE VIRGIL LAW FIRM, AND RICHARD DENAPOLI, CORAL GABLES TRUST COMPANY, BOTH OF CORAL GABLES, FLA. NAVIGATING MULTIPLE FIDUCIARIES: FLORIDA UNIFORM DIRECTED TRUST ACT AND CO-TRUSTEE CONSIDERATIONS

parts of the Trust Code, as needed to coordinate with the new Part XIV. The Act applies only to decisions or actions occurring on or after July 1, 2021, even if the trust was created before that date. For trusts where the principal place of administration is changed to Florida on or after July 1, 2021, the Act applies only to decisions or actions taken after the move. This article features some of the most significant revisions to the Trust Code pursuant to the Legislation and the Act. Many of the provisions in the Act can be overridden by the trust instrument itself, so it is important to review the terms of any directed trust. There are also certain powers that are not considered powers of direction for purposes of the Act unless the terms of the trust expressly provide otherwise. Examples of powers that are not powers of direction are a power of appointment and a power to appoint or remove a trustee. Definitions Historically, many trusts used the term “trust protector” when referring to a third person’s ability to make decisions on behalf of a trust. The Legislation adds multiple definitions including a trust director, which is defined as “a person who has a power of direction under the trust terms to the extent exercisable while that person is not a trustee.” A directed trustee is a trustee subject to the direction of a trust director and a directed trust is any trust which includes a power of direction. The Legislation also adds definitions for power of direction and terms

This article was originally published in the Winter 2021 issue of ActionLine, a Florida Bar Real Property and Trust Law Section publication. I t is common for settlors to name more than one trustee in a trust instrument, which may include multiple children of the settlor, individual and corporate trustees, or a mix of family and non family members. Reasons for naming multiple trustees can range from not hurting anyone’s feelings (i.e., naming all children together) to ensuring compliance with the settlor’s intent (i.e., neutral corporate trustee) to checks and balances (i.e., prevent misuse by a single trustee). However, naming multiple trustees can create a number of issues as well, especially when decisions are deadlocked, the trustees do not get along, or they refuse to communicate with each other. Sometimes in lieu of naming multiple trustees with the same authority, a settlor will provide certain trustees or non-trustee(s) the authority in the trust to make certain decisions relating to the trust administration. Historically, there has been very little statutory authority regarding trusts that grant a person other than a trustee a power over some aspect of the trust’s administration. This changed when on June 29, 2021, Gov. DeSantis signed into law Senate Bill 1070 (the “Legislation”) which, among other things, creates the Florida Uniform Directed Trust Act (the “Act”). This Act, which took effect on July 1, 2021, highlights the requirements and regulations for trust directors, including clarifying the fiduciary nature of the role, the application to co-trustees, and the duties and liabilities of those making decisions and complying with decisions. It creates a new section of the Florida Trust Code, Part XIV, titled Directed Trusts. However, it also includes revisions to other

of a trust. Powers

A trust director has the authority granted under the terms of the trust, as well any further power “appropriate to the exercise or nonexercise of a power” unless the trust indicates otherwise. This

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