Notify Relevant Parties

Your first responsibility is notifying interested parties about the trust and your role:

Beneficiaries: Florida law requires formal notification to beneficiaries about the trust’s existence, your role as trustee, and their rights. This communication should be clear, timely, and documented.

Creditors: Trusts don’t have a formal creditor notification process like probate, but you must still identify and pay legitimate debts from trust assets. A revocable trust is liable for the deceased’s debts and expenses just like their probate estate would be.

Financial institutions: You’ll need to provide death certificates and trust documentation to banks, investment firms, and other institutions holding trust assets.

Timely, clear communication is key to maintaining trust and avoiding disputes.

Filing the Notice of Trust

Florida Statute §736.05055 requires filing a Notice of Trust. This filing:

• Informs the probate court of the trust’s existence
• Limits the creditor claim window to three months
• Does not disclose contents or beneficiaries

Failing to file this notice can make you personally liable for creditor claims that could have been limited by proper filing. The court clerk will file the Notice, and send copies to personal representatives if a probate case exists.

Inventory and Valuation of Assets

Next, create a complete inventory of all trust assets:

1. Identify everything the trust owns
2. Determine fair market value as of the date of death
3. Document these details in a formal inventory

This often requires professional appraisers for real estate, business interests, collectibles, or other non-cash assets. The inventory serves multiple important purposes:

• Creates transparency for beneficiaries
• Establishes a tax basis for assets
• Helps you track trust property accurately
• Serves as the foundation for your trust accounting

Special situations to watch for: For business interests, especially S-corporations, you may need to make special tax elections (like ESBT or QSST status) to maintain proper tax treatment. Real estate requires careful management, and potentially outside expertise for rentals or development property.

As trustee, you must manage investments according to Florida’s Prudent Investor Act (Chapter 518). This means:

• Aligning any trust investments with the trust purpose
• Appropriately managing the risk across the trust assets and investments
• Generally diversifying investments unless circumstances warrant otherwise
• Balancing the needs of current beneficiaries against future beneficiaries

On this last point, many trusts serve multiple generations with competing needs. Consider a surviving spouse who needs steady cash flow to cover living expenses vs. the children of the deceased, who would benefit more from investments focused on long-term growth. Your investment strategy must fairly consider both parties interests while complying with the terms of the trust. 

Pay Debts and Taxes

Before you make final distributions, you must pay outstanding debts and taxes, which includes:

• Outstanding debts: Pay from trust assets.
• Final expenses: Cover funeral, medical, and related costs.
• Income taxes: File final returns.
• Estate tax: File Form 706 if applicable for estates over $13,990,000 (2025).
• Trust income taxes: File Form 1041 as needed.

Distribution of Assets

Once debts and taxes are settled, you can proceed with the distribution process

1. Review trust instructions – The trust document governs how, when, and to whom assets should be distributed. Some trusts require specific conditions to be met before distributions can occur.
2. Prepare a trust accounting – The accounting shows beneficiaries exactly how trust assets were managed, what expenses were paid, and how the final distribution amounts were calculated. Transparency here prevents future disputes.
3. Transfer assets according to the trust terms – This might involve liquidating investments to create cash distributions, or transferring specific assets directly to beneficiaries as outlined in the trust.
4. Obtain signed receipts and releases from beneficiaries – These documents confirm that beneficiaries received their distributions and release you from further liability related to trust administration.

A trust typically terminates when its purpose is fulfilled and assets are distributed. Florida law provides additional termination options:

• Small trust termination: Florida Statute §736.0414 allows you to terminate a trust with less than $50,000 in assets if administration costs are no longer justified.
• Completion of purpose: Once the trust has achieved its purpose, it can be terminated.
• Private agreement or judicial modification: In some cases, beneficiaries can agree to modify or terminate a trust, or a court can order termination.

When terminating a trust, you must proceed expeditiously but can retain reasonable reserves for final expenses and taxes.

Statutory Guidelines

Florida Statute §736.0708 provides that a trustee is entitled to “reasonable compensation” unless the trust specifies otherwise. What’s reasonable depends on:

• Trust complexity
• Skill required
• Time involved
• Customary rates in your area
• Risk and responsibility assumed

Corporate trustees typically charge 1-2% annually based on trust assets. Family member trustees might charge hourly rates or a fixed fee. If the trust specifies a fee structure, that generally controls unless it’s unreasonably high or low.

Disclosure Requirements

• Disclose fees to beneficiaries
• Include in trust accounting
• Prepare to justify fees if challenged

Self-Administration Considerations

Before you decide if you will hire an attorney to assist you with the trust administration, ask yourself the following questions:

• Do you understand the trust terms?
• Do you have time and organization skills?
• Are you comfortable with legal liability if you make a mistake?
• Is the trust complex with business interests, real estate, or tax issues?
• Are there family tensions or potential conflicts among beneficiaries?

If you answered “No” to any of those questions, you should seriously consider hiring a trust attorney to guide you through the process. 

Benefits of Hiring a Trust Attorney to Guide You Through It

Trust administration involves complex legal, tax, and family dynamics that can overwhelm even experienced individuals. Working with a qualified Florida trust attorney provides essential protection and guidance throughout the process.

• Legal protection reduces personal liability. Trust attorneys ensure your actions comply with Florida trust law and help you avoid costly mistakes that could result in personal lawsuits from beneficiaries.
• Tax compliance prevents expensive penalties. Trust taxation involves multiple tax types that create unexpected consequences. Professional guidance ensures proper filing and minimizes the overall tax burden.
• Conflict resolution preserves family relationships. Attorneys serve as neutral mediators when beneficiaries disagree about distributions or trust management. Early intervention prevents minor disputes from becoming expensive litigation.
• Administrative efficiency saves time and money. Experienced attorneys have established systems and professional relationships that expedite processes you might struggle with alone.
• Professional guidance demonstrates prudent management. Most beneficiaries appreciate trustees who seek expert advice because it shows responsible stewardship of their inheritance and protects trust assets.