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Asset Protection for Fiduciaries

Under Florida asset protection law, who are considered fiduciaries?

A fiduciary is an individual or entity entrusted with the responsibility of managing the property or affairs of another person. Fiduciaries include trustees, guardians, and personal representatives of estates. These individuals are legally obligated to act in the best interests of the person or entity they represent, adhering to the highest standards of care and loyalty.

Trustees, for example, are responsible for managing the assets within a trust according to the terms set by the trust’s creator. In addition, the court appoints guardians to manage the affairs of a person who is legally incapacitated, ensuring their health, safety, and welfare. Finally, personal representatives of estates are responsible for administering the estate of a deceased person, ensuring asset distribution according to the decedent’s will or Florida law.

By understanding the roles and responsibilities of fiduciaries, individuals can effectively plan for asset protection and ensure the proper management of assets for themselves and their loved ones.

Need help with a matter relating to fiduciaries? Schedule your consultation today with a top asset protection attorney.

Which asset protection laws relate to fiduciaries in Florida?

In Florida, several statutes and regulations relate to fiduciaries and their responsibilities in asset protection matters. The Florida Trust Code guides the duties and obligations of trustees. For guardians, the Florida Guardianship Law governs their responsibilities in managing the affairs of incapacitated persons or minors. Finally, personal Representatives of Estates are subject to the Florida Probate Code, which outlines the administration and distribution of a decedent’s estates.

At the federal level, fiduciaries may be subject to laws such as the Employee Retirement Income Security Act (ERISA) if they manage assets in employee benefit plans. Additionally, fiduciaries must comply with federal tax laws, such as the Internal Revenue Code (IRC), when managing trusts, estates, or guardianships with tax implications.

What are common issues regarding fiduciaries that lead to asset protection litigation?

The following issues are among the most common in actions regarding fiduciaries in asset protection law matters

  • Breach of fiduciary duty: When a fiduciary fails to act in the beneficiary’s or estate’s best interest, they may face legal action for breaching their duties.
  • Mismanagement of assets: Fiduciaries may be accountable if they improperly invest or manage assets, resulting in losses to the trust, estate, or ward.
  • Failure to account or report: Fiduciaries are required to provide regular accountings and updates to beneficiaries or the court. Failure to do so can lead to litigation.
  • Conflicts of interest: A fiduciary must avoid conflicts of interest that could compromise their ability to act in the best interest of the trust, estate, or ward. Conflicts may result in legal action.
  • Improper distribution of assets: Personal Representatives of Estates may face litigation if they distribute assets to the wrong beneficiaries or in incorrect amounts.
  • Failure to comply with tax laws: Fiduciaries who do not adequately address tax obligations for the assets they manage may face legal challenges or penalties from tax authorities.

When a set of facts meets the requirements of asset protection litigation, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path forward to seek appropriate remedies.

To determine whether your unique situation may necessitate litigation, please contact our office to set up your initial consultation.

Frequently Asked Questions

  1. What is the primary responsibility of a fiduciary in Florida?
    A fiduciary, whether a trustee, guardian, or personal representative of an estate, manages and protects the assets under their care while acting in the best interests of the beneficiaries, wards, or estate. They must follow the applicable state and federal laws, exercise due diligence, avoid conflicts of interest, and provide regular accountings.
  2. How can beneficiaries ensure their fiduciary is meeting their obligations?
    Beneficiaries can request accountings and updates from their fiduciary to ensure compliance with their duties. If they suspect mismanagement or breach of fiduciary duties, they can consult a Florida attorney specializing in asset protection law to investigate and potentially take legal action.
  3. Can a fiduciary be held personally liable for their actions in managing assets?
    A fiduciary can be personally liable if they breach their duties, mismanage assets, or engage in actions that harm the trust, estate, or ward. In such cases, beneficiaries or interested parties can file a lawsuit to recover damages or seek removal of the fiduciary.
  4. Are there any limitations on who can serve as a fiduciary in Florida?
    Florida law imposes certain restrictions on who can serve as a fiduciary. For example, a trustee must be at least 18 and mentally competent. Personal representatives of estates must be either a Florida resident or a close relative of the decedent. Guardians must undergo background checks and complete a court-approved guardianship training course.
  5. What steps can a fiduciary take to minimize the risk of litigation?
    To minimize litigation risk, fiduciaries should maintain clear and accurate records, adhere to their duties and obligations under Florida and federal law, consult with legal and financial experts when necessary, and communicate regularly with beneficiaries or interested parties. By demonstrating transparency, competence, and compliance with legal requirements, fiduciaries can reduce the likelihood of disputes and lawsuits.

Have more questions about an asset protection-related situation?

Crucially, this overview of fiduciaries does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to set up a consultation.

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