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Florida Case Clarifies Use of Trust Protectors

Florida Case Clarifies Use of Trust ProtectorsThe use of trust protectors for irrevocable trusts is to provide some important flexibility to what used to be considered a totally inflexible way to shelter assets in trust. A trust protector is a person who has been granted specific powers by the irrevocable trust document, and usually includes the power to change or terminate the trust, remove a trustee, name a successor trustee or even change beneficiaries.

In 2008, Florida adopted the use of trust protectors in its version of the Uniform Trust Code. In a recent case -- Minassian v. Rachins -- a Florida appeals court further clarified the role of a trust protector for Florida irrevocable trusts.

Mr. Minassian created a trust that became irrevocable upon his death. When he died, the trust was to be separated into a marital trust as well as a family trust for the benefit of his wife. After she died, the family trust would terminate and the remaining assets would be distributed to his children.

When Mr. Minassian died, only the family trust went into effect since the marital trust did not contain sufficient assets to be subject to the estate tax, and was thus not necessary. Mrs. Minassian was the sole trustee for the trust. Her administration of the trust came into conflict with the wishes of Mr. Minassian's children, and they sued her for breach of trust.

Mrs. Minassian filed a motion to dismiss on the grounds that the children lacked standing since they were not beneficiaries of the family trust. She then appointed a trust protector, who modified the trust so that it created new trusts at her death instead of creating separate shares of the family trust. The trial court found this amendment to be improper since it did not conform with Mr. Minassian's wishes and did not benefit the beneficiaries as a group.

A Florida appeals court reversed the trial court's decision, finding that Florida law does allow for trust protectors to amend a trust instrument and that since the trust was ambiguous in the use of the term "share" as to whether new trusts could be created upon the wife's death, it could be amended by the trust protector.

The Dorcey Law Firm, PLC, provides effective estate planning strategies for Florida residents, including the use of trusts to protect and pass on assets. Contact our Fort Myers law firm for your free consultation.

Categories: Estate Planning, Trusts
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The Dorcey Law Firm, PLC - Fort Myers Attorney
Located at 10181 Six Mile Cypress Pkwy, Suite C, Fort Myers, FL 33966
Phone: (239) 330-6674
Local Phone: (239) 418-0169
Website: http://www.dorceylaw.com
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