Fla. Stat. § 736.0306 - Commentary to Florida Trust Code
Legal Commentary on Fla. Stat. § 736.0306
Fla. Stat. § 736.0306 establishes when and how a trust instrument may designate representatives for trust beneficiaries. This statute section is mandatory under Fla. Stat. § 736.0105(2)(h) and thus cannot be overridden by the terms of a trust.
Generally, a trust instrument may designate a representative for a trust beneficiary. The trust instrument can also authorize a person to designate a representative for a trust beneficiary. However, there are two restrictions on the trust instrument’s ability to designate a representative.
First, no one designated can both represent a beneficiary and be trustee at the same time. Former trustees and future trustees may potentially represent a beneficiary, but a designated representative may represent or bind the beneficiary while serving as trustee. Notably, this restriction only applies to representation arising out of Fla. Stat. § 736.0306. A trustee may still represent beneficiaries—absent a conflict of interest—under the terms of Fla. Stat. § 736.0303(3).
Second, no one designated can both represent a beneficiary and be another beneficiary of the same trust, unless the designated representative was named by the settlor (most likely by name in the trust instrument itself) or the designated representative is one of the following:
the represented beneficiary’s spouse;
the represented beneficiary’s grandparent;
a descendant of the represented beneficiary’s grandparent; or
a descendant of the represented beneficiary’s beneficiary’s spouse.
Subsection (4) provides that a designated representative is not liable for any actions or omissions made in good faith. This same protection is not given to any other representative under the Florida Trust Code. Thus, there is a significant advantage to being designated as a representative in the trust instrument itself.
Text of Fla. Stat. § 736.0306
Designated representative.—
(1) If specifically nominated in the trust instrument, one or more persons may be designated to represent and bind a beneficiary and receive any notice, information, accounting, or report. The trust instrument may also authorize any person or persons, other than a trustee of the trust, to designate one or more persons to represent and bind a beneficiary and receive any notice, information, accounting, or report.
(2) Except as otherwise provided in this code, a person designated, as provided in subsection (1) may not represent and bind a beneficiary while that person is serving as trustee.
(3) Except as otherwise provided in this code, a person designated, as provided in subsection (1) may not represent and bind another beneficiary if the person designated also is a beneficiary, unless:
(a) That person was named by the settlor; or
(b) That person is the beneficiary’s spouse or a grandparent or descendant of a grandparent of the beneficiary or the beneficiary’s spouse.
(4) No person designated, as provided in subsection (1), is liable to the beneficiary whose interests are represented, or to anyone claiming through that beneficiary, for any actions or omissions to act made in good faith.
History of Fla. Stat. § 736.0306
Fla. Stat. § 736.0306 became law in 2007. In2009, subsection (1) was updated to the current text. Prior to this update, subsection (1) read:
(1) If authorized in the trust instrument, one or more persons may be designated to represent and bind a beneficiary and receive any notice, information, accounting, or report.
The text of Fla. Stat. § 736.0306 is original to the Florida Trust Code. The text is found nowhere in the Uniform Trust Code.
This article is part of the PTM Legal Commentary to the Florida Trust Code. Click here to navigate through the entire commentary.