Did Your Florida Trustee Hand Your Inheritance to a Financial Advisor and Walk Away?

A trustee who hands trust assets to a financial advisor and walks away isn’t just negligent — they’re in breach of Florida law. Florida Statutes §§736.0804 and 736.0807 impose ongoing personal liability on trustees who fail to supervise their investment delegations.

The Hidden Liability Every Delegating Florida Trustee Carries

Delegation of investment management is common and legally permitted under Florida law. But delegation is not abdication. When a Florida trustee delegates investment management to a financial advisor, the trustee remains personally liable for the performance of that delegation — including for losses that result from inadequate supervision of the advisor.

Florida §736.0804: Prudent Administration

Florida Statute §736.0804 requires trustees to administer the trust with the care, skill, and caution of a prudent person. This standard does not disappear when the trustee delegates investment management. The trustee is still responsible for ensuring that the delegation itself was prudent — selecting the right advisor — and that the ongoing performance of the delegation continues to be appropriate.

Florida §736.0807: The Specific Requirements for Delegation

Florida Statute §736.0807 establishes the legal requirements for valid investment delegation. A trustee who delegates must: select the agent with reasonable care (considering the agent’s qualifications and the specific needs of the trust); establish the scope and terms of the delegation clearly; and — most critically — monitor the agent’s performance on an ongoing basis. A trustee who selects a financial advisor and then stops engaging with the trust’s investment management has violated §736.0807, even if the initial selection was reasonable.

What “Monitoring” Actually Requires

Adequate monitoring under Florida law requires more than reading an occasional statement. Trustees must: review investment performance regularly against the trust’s investment objectives; evaluate whether the advisor’s approach continues to be appropriate for the trust’s specific circumstances; document each review and the conclusions reached; be willing to make changes — including replacing the advisor — when performance or approach is inadequate; and maintain a current Investment Policy Statement that guides the delegation.

The Financial Advisor Industry and What It Doesn’t Tell You

The multi-trillion dollar investment management industry benefits enormously from trustees who believe that handing assets to an advisor solves their responsibility problem. Almost no financial advisor will proactively tell a trustee that accepting a delegation does not eliminate the trustee’s personal liability — because doing so might discourage the delegation. Florida law requires trustees to know this regardless of what their advisor tells them.

Frequently Asked Questions

If I hire a financial advisor as trustee, am I responsible for their decisions?

If you hired an advisor to serve as a co-trustee, the advisor has direct fiduciary duties. If you delegated investment management to an advisor while remaining as trustee, you retain personal liability for the adequacy of the delegation — including selecting the advisor carefully, establishing clear investment guidelines, and monitoring ongoing performance.

What should be in a Florida trust Investment Policy Statement?

A Florida trust Investment Policy Statement should document: the trust’s investment objectives (growth, income, preservation); the trust’s risk tolerance; the time horizon for trust assets; any distribution requirements that affect liquidity; diversification guidelines; prohibited investments; performance benchmarks; and how often performance will be reviewed.

Can beneficiaries challenge how trust assets are being invested?

Yes. Florida trust beneficiaries have the right to demand accountings that include information about trust investments. If the accountings reveal investment decisions that appear to breach the Prudent Investor Rule or the duty of prudent administration, beneficiaries can petition the court for relief — including surcharge of the trustee for investment losses caused by the breach.