Southwest Florida's Health and Wellness Magazine Health and Wellness Articles
By James W. Mallonee
I’ve frequently been asked if a trust that becomes irrevocable be changed. The short answer is yes, but that will depend on the intent the Grantor placed into the language of their trust. The biggest example of when this arises is who is chosen as the Trustee. The beneficiaries may not like the ways and means that the Trustee is managing the estate distributions. This is especially true if the beneficiaries are put on a leash as to how much each will receive at one time or the amount paid out over time.
If the material intent of the trust has been lost because of some circumstantial change in events, then it is possible the court will grant a change. The court will not grant a change if the only reason is because the beneficiaries do not agree with the handing of the trust by the Trustee.
To prove that a material change has occurred requires an evidentiary review of the circumstances surrounding the reason for the discord among the beneficiaries. The court will first look at the language of the trust and try to determine why the Grantor chose the person or entity who would manage the trust as well as how it is to be distributed.
For example, did the Grantor chose the Trustee based on friendship, the oldest sibling or because he or she did not want one of the siblings managing the trust for fear of squandering the assets. Although selecting the Trustee based on the oldest sibling or that they are the closest in distance to the Grantor seems plausible, it is a recipe for disaster.
What if all of the beneficiaries consent to a change in Trustees? Although Florida law provides for the beneficiaries to collectively agree to a change does not mean that the Trustee has to agree. Florida law states that the Trustee must agree to any change to a trust. When this happens, the only remedy is to test out the desired change in a court of law and allow a judge to make the decision.
The courts place a great deal of attention on the Grantor’s intent when reviewing whether a material change should be made. The evidence the court will be looking at is the lawyer who prepared the trust and why certain things were placed into the verbiage of the document including why a certain Trustee was selected.
What happens if the Trustee is not performing in accordance with the intent of the trust? If it can be proven that the Trustee is in breach of managing the trust, then in such event, it is highly probable that the Court will remove the Trustee and replace with another. But this brings us back to the intent of the Grantor in selecting a Trustee. Once again testimony will be sought to try and understand what it was the Grantor wanted in his or her selection.
The Court will seek testimony as to what the purpose of the trust was intended to provide and from that evidence select a person or entity best suited to meet those intentions. The selection of a Trustee should be based on the individual’s ability to withstand criticism from the beneficiaries, manage your assets and be able to make decisions based on facts and not emotion. Sometimes this is one of the siblings, but also a third party who is independent.
If you are having difficulty deciding who should be your personal representative or Trustee, seek out the attorney of your choice and have that discussion. It may save your family’s relationship and not cause war among the siblings.
This article is intended for informational use only and is not for purposes of providing legal advice or association of a lawyer – client relationship.
James W. Mallonee (Jim Mallonee) is a graduate with a B.A. degree from the University of South Florida and a Master of Science degree from Rollins College in Winter Park, Florida. He obtained his Juris Doctorate from the University of the Pacific, McGeorge School of Law in Sacramento, California. Prior to returning to Florida to practice law, Mr. Mallonee was employed by Intel Corporation for 22 years in such locations as New Jersey, Florida and California.
In addition to being a member of the Florida Bar since 2003, Mr. Mallonee serves on the Charlotte Community Foundation Committee for asset allocation and teaches Business Law at State College of Florida. Mr. Mallonee is also on the Board of Directors for the Military Heritage Museum located in Charlotte County, Florida.
His firm practices law in the following areas: Probate, Wills & Trusts, Guardianships, and Litigation in the areas of Real Estate, Guardianships and Estates. The firm has two locations in Venice and Port Charlotte, Florida.
946 Tamiami Trail, #206
Port Charlotte, FL 33953
(941) 206-2223
Facsimile (941) 206-2224
871 Venetia Bay Blvd., #225
Venice, FL 34285
(941) 207-2223
