Actions concerning trust accountings come in several varieties, including challenging a trust accounting received, or perhaps suing the trustee for not filing a trust accounting at all. The timelines vary depending on the type of trust accounting action you have.
How Long Do I Have To Challenge A Trust Accounting In Florida?
6 months from the receipt of a trust limitation notice. The trust limitation notice will come by certified mail or some other delivery method requiring proof of delivery.
The Florida Trust Code section 736.1008, states, in pertinent part:
(1) Except as provided in subsection (2), all claims by a beneficiary against a trustee for breach of trust are barred as provided in chapter 95 as to:
(a) All matters adequately disclosed in a trust disclosure document issued by the trustee, with the limitations period beginning on the date of receipt of adequate disclosure.
(b) All matters not adequately disclosed in a trust disclosure document if the trustee has issued a final trust accounting and has given written notice to the beneficiary of the availability of the trust records for examination and that any claims with respect to matters not adequately disclosed may be barred unless an action is commenced within the applicable limitations period provided in chapter 95. The limitations period begins on the date of receipt of the final trust accounting and notice.
(2) Unless sooner barred by adjudication, consent, or limitations, a beneficiary is barred from bringing an action against a trustee for breach of trust with respect to a matter that was adequately disclosed in a trust disclosure document unless a proceeding to assert the claim is commenced within 6 months after receipt from the trustee of the trust disclosure document or a limitation notice that applies to that disclosure document, whichever is received later.
(3) When a trustee has not issued a final trust accounting or has not given written notice to the beneficiary of the availability of the trust records for examination and that claims with respect to matters not adequately disclosed may be barred, a claim against the trustee for breach of trust based on a matter not adequately disclosed in a trust disclosure document is barred as provided in chapter 95 and accrues when the beneficiary has actual knowledge of:
(a) The facts upon which the claim is based if such actual knowledge is established by clear and convincing evidence; or (b) The trustee’s repudiation of the trust or adverse possession of trust assets.
What is The Deadline To Challenge A Florida Trust Accounting If I Don’t Receive a Limitation Notice?
4 years if you receive no accountings or receive accountings with no limitation notice. Under chapter 95 there is a four-year statute of limitations for a claim of breach of fiduciary duty. Challenges to the failure to receive a trust accounting or objectionable accountings fall under breach claims. Section 736.1008 creates an exception based upon receipt of a limitation notice, which then triggers a six-month limitation.
Florida Case Law Regarding Trust Accounting Actions
Woodward v. Woodward
Most recently, in Woodward, the court found that an action against a trustee was not barred by laches. In 1972, Mary Woodward established a trust for her grandchildren (“Mary Trust”). Mary’s son Orator was the trustee of the Mary Trust. Gregor Woodward was a beneficiary of the Mary Trust. In 1996 Gregor filed an amended complaint against Orator for breach of fiduciary duty as trustee of the Mary Trust. During the action, on May 31, 2002, Orator transferred the assets of the Mary Trust into two new trusts – the “El Bravo Trust” and the “Serena Woodward Trust,” thereby terminating the Mary Trust.
In January 2003, Orator filed a motion to strike the amended complaint and to sanction Gregor. In this motion, Orator “mentioned that he had distributed the Mary T. Woodward Trust assets into two new trusts.” The trial court dismissed Gregor’s action. Almost a decade later, on October 11, 2013, Orator served accountings for the Mary Trust, the El Bravo Trust, and the Serena Woodward Trust. The accountings all contained a limitations notice that an action for breach of trust based on matters disclosed in the accountings may be barred unless the action was commenced within six months of receipt of the accounting. The Mary Trust accounting stated:
On May 31, 2002 O.E. Woodward exercised his right of withdrawal and withdrew all assets from the O.E. Woodward Trust dated 01/14/1972. The real property interest was assigned to the El Bravo Trust dated 05/31/2002. All remaining assets of O.E. Woodward Trust dated 01/14/1972 were assigned to the Serena Mary Elizabeth Woodward Trust dated 05/31/2002.
On April 9, 2012 (within six months of receipt of the accountings), Gregor filed suit against Orator, alleging that Orator breached his fiduciary duties in terminating the Mary Trust and assigning the assets to two new trusts. Orator raised laches as one of his affirmative defenses. In a motion for summary judgment, Orator argued that laches applied because Gregor knew about the transfer of assets no later than January 2003 (when the motion to strike was filed in the 1996 action), but Gregor did not bring his claims within the four year statute of limitations. The trial court granted summary judgment and dismissed the action, finding that res judicata and laches barred the action. Gregor appealed.
The Florida appellate court found that laches did not bar the action and stated:
The four-year statute of limitations does not begin to run until a beneficiary receives an adequate trust disclosure document issued by the trustee. § 736.1008(1)(a), Fla. Stat. (2012). When a matter is adequately disclosed in a trust disclosure document, a beneficiary must bring an action against a trustee for breach of trust within six months after receipt. § 736.1008(2), Fla. Stat. (2012). If a matter is not adequately disclosed, the statute of limitations begins to run on the date of receipt of the final trust accounting and notice of the availability of the trust records for examination. § 736.1008(1)(b), Fla. Stat. (2012). When a matter is not adequately disclosed, and a trustee has not issued a final trust accounting, a claim against the trustee for breach of trust does not begin to accrue until the beneficiary has actual knowledge of the “facts upon which the claim is based if such actual knowledge is established by clear and convincing evidence.” § 736.1008(3), Fla. Stat. (2012).
In the instant case, Orator terminated the Mary T. Woodward Trust in 2002 but did not provide an accounting to Gregor until October 11, 2011. Thus, pursuant to section 736.1008(1)(a), the statute of limitations did not begin to run until October 11, 2011. In addition, the limitations notice contained in the accounting advised Gregor that he had six months to bring a cause of action. Gregor timely commenced his action within this timeframe, in accordance with section 736.1008(2).
Corya v. Sanders
In Corya, the court considered the issue of how far back accountings could be sought, rather than how long a beneficiary had to challenge a Florida trust accounting. In Corya, the court held as follows:
We thus conclude, on the facts of this case, that statutory laches under section §95.11(6) limits the right to an accounting, where no accounting has been done, to no more than four years before filing an action for an accounting against the trustee of an irrevocable trust.
Practitioners took the Corya decision to mean that beneficiaries who had not received accountings, and had not received a limitations notice, could not get accounting going back over four years. This was obviously concerning, and was interpreted as giving somewhat of a free pass to bad trustees. However, the court in Corya was careful to stress that the holding was “on the facts of this case.”
In Corya, the dispute involved four family trusts. Sanders sued his mother, the trustee, for an accounting. Sanders had never been served with a trust accounting. Sanders argued that his claim for breach of fiduciary duty did not begin to accrue until Sanders had actual knowledge that he was entitled to accountings. The issue was when Sanders had actual knowledge, to determine when the statute of limitations began to run pursuant to 736.1008(3).
In Corya, the problem was that Corya (the trustee and Sanders’ mom) had shown Sanders trust statements and discussed the trusts with Sanders, but Sanders was not interested. The court found that Sanders essentially sat on his rights, refused disclosure, and then sued for 30 years of accountings when an attorney informed him he had a right to accountings. This delayed knowledge of the law had nothing to do with his knowledge that trust accountings were not being given to him each year, and so Sanders was barred from receiving accountings more than four years from filing his action.
The take-away from Woodward and Corya is that beneficiaries should not sit on their rights. If you are a beneficiary of a trust and are not receiving accountings, do not sit around for years before deciding to take action. If you receive a limitations notice, make sure that you know how long you have to challenge a Florida trust accounting, and commence any action within the six-month period.
Can you sue a Trust in Florida?
Yes, by suing the trustee of the Trust, discussed here. An action against a trust in Florida is brought against the trustee of the Trust, not the trust itself. If you are suing the trustee for breaches of duty, you will often sue the trustee in his capacity as trustee of the trust, and individually.