PROS AND CONS IN CHOOSING A CORPORATE FIDUCIARY:
PROS
Expert Management: Corporate fiduciaries are highly trained at what they do. They’ll have multiple staff members with many years of experience in dealing with administration issues.
Neutrality: With no immediate ties to your beneficiaries, corporate fiduciaries won’t have the emotional stress and strain that a family member or friend could be subject to when serving. A corporate fiduciary won’t be biased by a beneficiary’s past choices or present lifestyle and will simply administer the estate, trust, or guardianship as provided by the explicit terms of the existing estate planning documents and Florida law.
One-Stop-Shop: A bank or independent trust company acting as a fiduciary will have all of the resources they need under one roof. This could include investment services, brokerage services, estate or trust accounting services, and business and real estate management services.
High Standard of Care: Corporate fiduciaries are required to be licensed, bonded, and insured. They are subject to strict state and federal regulations and held to a very high standard of care above and beyond the average person when managing an estate, trust, or guardianship.
CONS
Lack of Flexibility: Corporate fiduciaries can be extremely rigid and set in their ways when it comes to investing, managing, and spending the assets of an estate, trust, or guardianship. This lack of flexibility can lead to unhappy beneficiaries who will be forced to go to court to resolve disputes between them and the institution.
Expensive: In order to provide all of its professional services, a corporate fiduciary will generally cost more than an individual fiduciary.
Committee Approach: Corporate fiduciaries use committees to make many of their decisions, which can lead to slow responses to a beneficiary’s questions or concerns as well as prolonged administration.
Bureaucracy: Corporate fiduciaries are corporations made up of multiple departments and offices located in different buildings and, perhaps, various cities. Finding someone who can help on short notice can be a daunting task.
ARE THERE LIMITATIONS ON WHO CAN BE A CORPORATE FIDUCIARY IN FLORIDA? YES
Not all corporations can act in a fiduciary capacity. Sec. 660.41, F.S. entitled “Corporations; certain fiduciary functions prohibited” reads:
All corporations are prohibited from exercising any of the powers or duties and from acting in any of the capacities, within this state, as follows:
(1) As personal representative of the estate of any decedent, whether such decedent was a resident of this state or not, and whether the administration of the estate of such decedent is original or ancillary; however, if the personal representative of the estate of a nonresident decedent is a corporation duly authorized, qualified, and acting as such personal representative in the jurisdiction of the domicile of the decedent, it may as a foreign personal representative perform such duties and exercise such powers and privileges as are required, authorized, or permitted by s. 734.101.
(2) As receiver or trustee under appointment of any court in this state.
(3) As assignee, receiver, or trustee of any insolvent person or corporation or under any assignment for the benefit of creditors.
(4) As fiscal agent, transfer agent, or registrar of any municipal or private corporation, except that this prohibition shall not be so construed as to prevent banks, associations, and trust companies not located in this state from acting within the state where located as fiscal agent, transfer agent, or registrar of municipal or private corporations of this state. Nothing herein shall prevent any Florida corporation that is not a bank, association, or trust company and that does not have trust powers from being its own fiscal agent, transfer agent, or registrar concerning its own affairs, stock, or securities. Nothing herein shall prevent any Florida corporation or corporation having its principal place of business in Florida registered as a transfer agent with the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, or the Securities and Exchange Commission from acting as a transfer agent for any other private corporation. Nothing in this section or in any other law of this state shall be construed to prohibit a foreign bank, foreign association, or foreign trust company as trustee of any charitable foundation or endowment, employees’ pension, retirement or profit-sharing trust, alone or together with a cotrustee, from: making loans or committing to make loans to any other person; contracting, in this state or elsewhere, with any person to acquire from such person a part or the entire interest in a loan which such person proposes to make, has heretofore made, or hereafter makes, together with a like interest in any security instrument covering real or personal property in the state proposed to be given or hereafter or heretofore given to such person to secure or evidence such loan; servicing directly or entering into servicing contracts with persons, and enforcing in this state the loans made by it or obligations heretofore or hereafter acquired by it in the transaction of business outside this state or in the transaction of any business authorized or permitted hereby; or acquiring, holding, leasing, mortgaging, contracting with respect to, or otherwise protecting, managing, or conveying property in this state which has heretofore or may hereafter be assigned, transferred, mortgaged, or conveyed to it as security for, or in whole or in part in satisfaction of, a loan or loans made by it or obligations acquired by it in the transaction of any business authorized or permitted hereby. However, no such foreign bank, foreign association, or foreign trust company shall be deemed to be transacting business in this state, shall be required to qualify so to do, or shall be deemed to be unlawfully exercising powers or duties, acting in an unlawful or prohibited capacity, or violating any of the provisions of this section or of any other law of this state solely by reason of the performance of any of the acts or business hereinbefore permitted or authorized hereby; further, nothing herein shall be construed as authorizing or permitting any foreign bank, association, or trust company to maintain an office within this state. This section does not apply to banks or associations and trust companies incorporated under the laws of this state and having trust powers, banks or associations and trust companies resulting from an interstate merger transaction with a Florida bank pursuant to s. 658.2953 and having trust powers, or national banking associations or federal associations authorized and qualified to exercise trust powers in Florida. [Emphasis added]
ESTATES: Sec. 733.305(1), F.S. provides that “[a]ll trust companies incorporated under the laws of Florida, all state banking corporations and state savings associations authorized and qualified to exercise fiduciary powers in Florida, and all national banking associations and federal savings and loan associations authorized and qualified to exercise fiduciary powers in Florida shall be entitled to act as personal representatives and curators of estates.” Accord §660.41(4), F.S. In the event an unqualified corporation should be appointed, its actions while serving in such capacity are voidable. Under such circumstances, the corporation would be entitled to no compensation from the estate while acting under colorable appointment. See DiDiego v. Crockett, Franklin & Chasen, P.A. (In re Estate of Montanez), 687 So. 2d 943 (Fla. 3rd DCA 1997).
TRUSTS: Sec. 617.2101, F.S. provides that “[a]ny corporation, organized under this act [the Florida Not For Profit Corporation Act] may act as trustee of property whenever the corporation has either a beneficial, contingent, or remainder interest in such property. Any corporation may accept and hold the legal title to property, the beneficial interest of which is owned by any other eleemosynary institution or nonprofit corporation or fraternal, benevolent, charitable, or religious society or association.” In addition, §736.0112, F.S. provides that “[u]nless otherwise doing business in this state, local qualification by a foreign trustee is not required for the trustee to receive distribution from a local estate. Nothing in this chapter shall affect the provisions of s. 660.41.” Compare §660.41(2), (4), F.S
GUARDIANSHIPS: Sec. 744.309, F.S. titled “Who may be appointed guardian of a resident ward”, reads in relevant part:…(4) TRUST COMPANY, STATE BANK OR SAVINGS ASSOCIATION, OR NATIONAL BANK OR FEDERAL SAVINGS AND LOAN ASSOCIATION. A trust company, a state banking corporation or state savings association authorized and qualified to exercise fiduciary powers in this state, or a national banking association or federal savings and loan association authorized and qualified to exercise fiduciary powers in this state may act as guardian of the property of the ward. (5) NONPROFIT CORPORATE GUARDIAN. A nonprofit corporation organized for religious or charitable purposes and existing under the laws of this state may be appointed guardian for a ward. If the nonprofit corporate guardian charges fees against the assets or property of the ward for its services, the corporation must employ at least one professional guardian….(7) FOR-PROFIT CORPORATE GUARDIAN. A for-profit corporate guardian existing under the laws of this state is qualified to act as guardian of a ward if the entity is qualified to do business in the state, is wholly owned by the person who is the circuit’s public guardian in the circuit where the corporate guardian is appointed, has met the registration requirements of s. 744.2002, and posts and maintains a bond or insurance policy under paragraph (a). [The for-profit corporate guardian must meet one of the requirements referenced in paragraph (7)(a)]