Florida Banking October 2023

can direct who will make sensitive medical decisions and guide how to make them. Your client also can designate an agent to act on his or her behalf via a durable power of attorney. The client can be very specific about what decisions the agent may make. They can limit the powers or allow their agent to exercise “superpowers” such as changing beneficiary designations and changing trust terms. Your client’s durable power of attorney also may indicate it is intended to take the place of a guardianship of their property if they become incapacitated. Alternatively, your clients can designate who they want to serve as a guardian if they are deemed incapacitated. Florida law allows competent adults to do so by naming a “preneed guardian.” All of these documents must be drafted in accordance with Florida law to be valid. It is important to work with an experienced attorney when helping your clients through this process. How can trustees and guardians work together? In many cases a guardian may still be needed for someone whose assets are in a revocable trust. If you are serving as a trustee in these circumstances, you must understand each fiduciary’s differing role. Here are a few important things to remember when working with a guardian. Notice — Trustees are not legally entitled to notice that a grantor has been deemed incapacitated. Maintain good relations with your client’s attorney, as they will get notice of the incapacity proceedings and can notify you of your client’s status. Cooperation — Both the trustee and the guardian have a responsibility to operate in the best interest of the beneficiary/ward. With that in mind, the best thing a trustee can do at the beginning of the guardianship

the trust terms, guardians may have the authority to modify, amend or revoke the grantor’s revocable trust (or other aspect of a ward’s estate plan). That means the guardian may have the authority to dissolve the trust or change the trustee. However, they cannot make such changes without good reason and a court order. Accountings — The law remains unclear as to whom trustees must account if the sole beneficiary becomes incapacitated. On one hand, it might be advisable to provide an accounting to the guardian. This way, the trustee can demonstrate prudent administration of the estate and provide statutory notice necessary to shorten the time within which a guardian must bring a breach of fiduciary duty claim. However, there are risks associated with turning over personal financial information to which a guardian is not entitled. As always, there are pros and cons the trustee must weigh with every decision. When navigating the trustee-guardian relationship, especially in times of conflict, it is best to do so with the advice of counsel. What if a guardian is not acting in my client’s best interest? The guardianship process can be a helpful tool for protecting our state’s most vulnerable citizens, but the power that comes with it can be abused. If you are the trustee of a revocable trust, here are some steps to consider when the guardianship process is initiated. Stay in touch with the grantor’s attorney — Let them know to contact you about pending hearings. Object — If you have reason to believe your client is not incapacitated, say so! Work with your client’s attorney, your own attorney, and your client’s agent named in a durable power of attorney to ensure the guardianship court is fully informed in any capacity hearing. Continued on page 22

is communicate. Figure out what the guardianship encompasses. For example, is the guardian responsible for financial decisions? Medical? Also inquire as to any immediate plans requiring an expenditure of funds. A move into a long-term-care facility might trigger the need for a discretionary distribution to cover health and housing costs. Jurisdiction — As a general rule, guardianship courts lack jurisdiction over the trust and trustee. This means the guardian typically does not have authority over trust assets, except in very limited circumstances. Whether a trustee should consent to the guardianship court’s jurisdiction is a multifaceted question, and should be considered carefully. Estate Planning — Depending on a variety of factors, including

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