What is a Trust Limitation Notice?

  1. Probate
  2. What is a Trust Limitation Notice?

Administering a trust is no easy proposition. Trustees have a significant number of duties to perform and the failure to carry out those duties can have severe consequences.

One extremely important duty of a trustee is the duty to provide beneficiaries with information regarding the trust.

This duty, known as the duty to “account,” is not only critical, but a highly complex one.

In Florida, our statutory law requires trustees to “inform and account” to beneficiaries, but it does not detail exactly what must go into a trustee’s report. Rather, it requires trustees to include all “significant” transactions in a trust disclosure document that constitutes “adequate disclosure” while still being a “reasonably understandable report.”

The result of this lack of specificity?

The fact that whether or not a trustee’s report constitutes an “adequate disclosure” can often be uncertain.  And this uncertainty can lead to litigation.

Lawsuits Against Trustees for Breach of Trust and the Statute of Limitations

If a beneficiary believes that the trustee has failed to provide an adequate disclosure or has failed in carrying out his/her fiduciary duties, he or she may consider suing the trustee for breach of trust.

As with any lawsuit, however, a breach of trust action must be brought within the applicable legal time frame—or statute of limitations.

The Intricacies of Trust Limitation Notices

A trust disclosure document is an accounting or any other written report of the trustee that “adequately discloses” enough information to allow the beneficiary to know or be able to reasonably ascertain whether or not he or she has a claim as to the matter in the document.

What, exactly, constitutes an “adequate disclosure” is a question that is changing and an analysis of that issue is beyond the scope of this post.

However, assuming for our purposes that a trustee has issued a trust disclosure document and a beneficiary believes that a breach of trust has occurred. In that case, the beneficiary may file suit against the trustee for breach of trust.

BUT…

He/she must do so within Florida’s applicable statute of limitations for filing a breach of trust action.

While this may sound like a simple thing to do, the applicable time frame for filing a lawsuit isn’t always clear.

That’s because the statute of limitations that applies to breach of trust actions imposes different limitations periods ranging from 4 years to 6 months, and a statute of repose.

Which time limitation applies depends on whether or not the trustee has issued a “trust disclosure document.”

In cases where the trustee has “adequately disclosed” a matter in the trust disclosure document, a beneficiary has 4 years to file suit.

BUT…

This time period can be drastically shortened if…

The Trustee Files a Trust Limitation Notice

As mentioned, the statute of limitations for filing a breach of trust action ranges from 4 years to 6 months.

The shorter time period will apply when several factors are present:

  1. the trust document “adequately discloses” the matter,
  2. in a “trust disclosure document,” and
  3. the trustee files a trust limitation notice.

A limitation notice is a written statement of the trustee that shortens the statute of limitations. The trust notice warns the beneficiary that he or she only has 6 months in which to file an action for breach of trust against the trustee concerning any matter that has been adequately disclosed in the disclosure document.

Trust administration is a complex area of law. It is not easy for beneficiaries or trustees to determine what constitutes “adequate disclosure” or a “trust disclosure document.” Nor is it easy for a trustee to know when to file a trust limitation notice. This is why it is never advisable for a trustee to attempt to administer a trust on his or her own. And it is also why, if you are a beneficiary or a trustee, you should always consult an experienced estate and probate lawyer.

Protecting Your Family is Just a Phone Call Away.

Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to the Law Offices of Samantha J. Fitzgerald to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well.  When you work with the estate planning attorneys at the Law Offices of Samantha J. Fitzgerald, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.

Previous Post
3 Situations When You Should Amend Your Revocable Trust, and 1 When You Should Revoke It Altogether.
Next Post
When “X” Marks the Will: Is an “X” a Valid Signature for Your Will?
Menu
Font Resize