Designated Representatives and Staggered Disclosure Provisions: A Powerful Combination in Florida Trusts

When creating a trust in Florida, you may want to protect your privacy and control when and how a beneficiary learns about the trust you created. This can be especially important when a family has young beneficiaries or complicated relationships. If you release information too soon, it could create unintended consequences. Often parents would prefer that children and grandchildren do not have access to trust information. Their concern is that those individuals will not, for example, know that they have a trust fund, work as hard as the parent or grandparent desires to each of them to achieve for themselves.

Florida law does not allow a trust to stay completely “silent.” Trustees have a duty to keep certain beneficiaries reasonably informed about the trust and how it is being administered. For example, a trustee must notify qualified beneficiaries of the trust’s existence and the trustee’s identity within 60 days of the trustee’s acceptance of their role. In short, if privacy matters, the estate plan should be drafted with that goal in mind.

Fortunately, for the above concerns, Florida has adopted Designated Representative statutes and staggered disclosure provisions. This combination of tools may help Florida families balance privacy with Florida’s trust laws.

What is a designated representative?

A designated representative is a person named in the trust to receive information on behalf of a beneficiary. They may act as a substitute for a beneficiary. Instead of sending every notice, accounting, or report directly to the beneficiary, the trustee may provide that information to the designated representative. The trust may name the designated representative directly or provide that power to someone other than the trustee. In some cases, multiple people may serve in this role.

This can be helpful in real-life situations. For example, a parent may not want a young adult child to receive detailed trust information before that child is mature enough to understand it. Another example could be if a family wants to avoid unnecessary tension amongst beneficiaries, they could choose one trusted person to receive and review the trust information, prior to the beneficiary.

Florida law places limits on who can serve in this role. The trustee generally cannot simultaneously serve as the designated representative. And if the designated representative is also a beneficiary, the person must fit within certain exceptions, such as being named by the person who creates the trust(settlor) or being a close family member described under Florida law.

It is also important to note that naming a designated representative does not automatically prevent the trustee from giving information directly to the beneficiary. If the goal is to limit direct disclosure to the beneficiary, the settlor should specifically restrict their ability in the trust. 

What is a staggered disclosure provision?

A staggered disclosure provision is an added layer of protection and privacy to a trust. It means the trust does not have to provide all the information to a beneficiary at once. Instead, the trust can specify when certain information will be shared. For example, a beneficiary might receive information at set intervals, such as, when reaching a certain age, after the death of a family member, or after another milestone described in the trust.

This type of provision can be especially useful when there are strained or complicated family relationships. It allows the settlor to tailor when the designated representative serves on behalf of the beneficiary and when the beneficiary receives information directly.

When you combine both tools, a designated representative and a staggered disclosure provision can provide families with the ability to tailor the timing of the beneficiaries’ receipt of information relating to the trust. The designated representative can receive required information now, while the beneficiary may receive information later.

The trust should clearly explain who may serve as the designated representative, when information may be shared with the beneficiary, and whether any confidentiality protections are needed. This will help the trustee, and the family understand the reason behind this specific structure in the trust and reduce the risk of conflict.

Trust planning is not only about deciding who receives assets. It is also about deciding how information is shared, when it is shared, and who should receive it. For Florida families who value privacy but still want to comply with the law, designated representatives and staggered disclosure provisions can be a useful combination of tools to discuss with an estate planning attorney.

If you would like to discuss how your trust can better protect your family’s privacy or whether designated representatives and staggered disclosure provisions are appropriate for your estate plan, please contact our office at (561) 626-2101.