It is important to carefully select a fiduciary when structuring your estate plan. A fiduciary is a person or entity entrusted with the authority to act on your behalf, or on behalf of your estate or trust. Clients often have a trusted individual or institution that they may want to serve as both Personal Representative in their Will and Trustee under their Trust. However, Florida statutes limit who can serve in these capacities. In some instances, both roles cannot be filled by the same individual or company.
This article explains the requirements for these separate fiduciary positions. It’s crucial to know the requirements in order to make a plan that will be given effect under the Florida statutes. Choosing individuals and/or institutions with the right skills, integrity and trustworthiness will help prevent disputes, minimize the risk of mismanagement, and ensure your assets are handled according to your wishes.
I. Personal Representative
In Florida probate, the role commonly known in other states as an “executor” is called the “Personal Representative.” The Personal Representative is responsible for managing the decedent’s estate through the probate process. This includes identifying assets, notifying creditors, paying debts and taxes, and distributing assets according to the decedent’s will or the intestacy laws.
To serve as a Personal Representative as appointed under a Florida will, the individual must be at least 18 years of age, mentally competent, and either a resident of the state of Florida or a family member. A family member includes a legally adopted child, an adoptive parent, relation by blood, a spouse or sibling, uncle, aunt, cousin, of yours, or someone related by blood to any of these people, or a spouse of any of these people. For example, your lifelong friend who lives in Jacksonville may serve as your Personal Representative even though they are not a relative. Additionally, your daughter in New York and your brother’s wife in California are also both qualified.
You also have the option to name two Co-Personal Representatives. This option is often used by a parent that has two children and does not want to choose between them.
If there is not an individual you would like to serve as your Personal Representative, the Florida statutes allow trust companies and other corporations and associations to serve in this fiduciary capacity. The company must be properly incorporated under Florida law or authorized to exercise their fiduciary powers in Florida. Please contact our office to determine if your company of choice will be able to be validly appointed as personal representative.
A common issue for our clients is that they have a friend or trusted professional that lives out of state and want to name that out of state individual as a Personal Representative. Though the out of state friend may not qualify as the Personal Representative under Florida law, the same individual may serve as the Trustee of a Trust.
II. Trustee
A Trustee is the fiduciary designated to manage the assets of a Trust. For example, that Trust might be created under your Will for the benefit of your minor children, or you might create a Revocable Trust during your lifetime. An individual must be at least 18 years of age and be mentally competent to be named as Trustee of such Trusts. Unlike the Personal Representative nominated in your Will, there is no requirement that the Trustee be related to you by blood or that the Trustee reside in the state of Florida. You also may choose to name a corporate Trustee. Such a corporate Trustee must have Trust powers under Florida law.
As with choosing a Personal Representative, you may wish to designate Co-Trustees. This might be two individuals or perhaps a family member as well as a financial institution with Trust powers. We are glad to discuss the advantages of each option.
III. Agents and Surrogates Under Powers of Attorney and Advance Directives
While your Will and your Revocable Trust establishes your testamentary plan to be carried out at death, equally if not more important, is who will make financial, legal, and health care decisions for you in the event of your incapacity.
Typically, these legal, financial, and health care decisions are made by an Agent named in a Durable Power of Attorney, and Surrogate named in a Designation of Health Care Surrogate and a Living Will. There is no requirement under Florida law that the individual or individuals you name in these roles be either related to you or live in the state of Florida. As with choosing any fiduciary, you will want to ensure that the person you choose is honest, has sound judgement, and will make decisions which are in your best interest. You might choose a spouse, child, or other family member for such a role.
While most financial institutions will not agree to serve as an Agent or Surrogate under Powers of Attorney and Advance Directives, there are some very competent individuals professional fiduciaries that will fill that role if you do not have appropriate family or close friends you wish to name.
IV. Conclusion
In conclusion, carefully choosing fiduciaries for your estate planning is crucial to ensure that your wishes are honored, and your assets are managed effectively. Fiduciaries, such as your Personal Representative and Trustee, as well as the Agent and Surrogate under your Powers of Attorney and Advance directives, play a central role in providing for you during your incapacity and in overseeing the distribution of your estate while making decisions in accordance with your directions.
