I. CHALLENGING THE VALIDITY OF A FLORIDA TRUST
Trusts are great estate planning tools that often involve the use of a pour over will in an attempt to avoid the probate process. While this can be beneficial from an estate planning point of view, trusts can also be abused or simply vehicles that a potential wrongdoer uses to avoid the probate process altogether. Generally, similar to a Will contest, the validity of a Trust can be challenged by several key statutory reasons. The basis for the revocation of a trust is provided in Fla. Stat. 736.0406 which provides:
Fla. Stat. 736.0406:
If the creation, amendment, or restatement of a trust is procured by fraud, duress, mistake, or undue influence, the trust or any part so procured is void. The remainder of the trust not procured by such means is valid if the remainder is not invalid for other reasons. If the revocation of a trust, or any part thereof, is procured by fraud, duress, mistake, or undue influence, such revocation is void.
So in Florida, if either the trust or the revocation of a trust was procured by (1) fraud (2) duress (3) mistake or (4) undue influence it will be rendered invalid. Actions to terminate a trust are independent actions and typically do not have to be brought before the relevant Florida Probate Court or in the Probate proceeding. The causes for revocation of a trust in Florida are very similar to the revocation of a will in Florida. In addition to the enumerated reasons in the statute, ample authority exists to overturn a trust agreement if the testator lacked the mental capacity to create the trust at the time of creation.
Unlike will contests, Trust litigation is a separate legal action that is brought independently of the Probate Court. Fla. Stat. 736.0201 provides:
Except as provided in subsections (5) and (6) and s. 736.0206, judicial proceedings concerning trusts shall be commenced by filing a complaint and shall be governed by the Florida Rules of Civil Procedure.
This means that a dispute regarding the validity of a Trust document is a separate lawsuit brought outside of the probate administration or probate proceedings of an estate.
II. ACTIONS AGAINST A TRUSTEE FOR MISMANAGEMENT OF TRUST ASSETS
Trust assets must be managed by the trustee for the best interests of the beneficiaries. A violation of this obligation by the trustee creates a cause of action for a breach of trust. This basic concept is codified in Florida Law under Fla. Stat. 736.1001 which provides:
(1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(2) To remedy a breach of trust that has occurred or may occur, the court may:
(a) Compel the trustee to perform the trustee’s duties;
(b) Enjoin the trustee from committing a breach of trust;
(c) Compel the trustee to redress a breach of trust by paying money or restoring property or by other means;
(d) Order a trustee to account;
(e) Appoint a special fiduciary to take possession of the trust property and administer the trust;
(f) Suspend the trustee;
(g) Remove the trustee as provided in s. 736.0706;
(h) Reduce or deny compensation to the trustee;
(i) Subject to s. 736.1016, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or
(j) Order any other appropriate relief.
Damages to the successful beneficiary include a repayment of damages done to the proper trust beneficiaries and/or a disgorgement of any profits realized by the wrongdoer for the breach.