## Facts

- A husband executed a 2008 restatement of a revocable trust that became irrevocable at his death.
- The trust directed that, because no federal estate tax applied at the husband’s death in 2010, remaining trust property be distributed into a Family Trust.
- The husband’s surviving spouse, Paula, served as trustee and was authorized to distribute Family Trust income and principal to herself, in her sole discretion, for her health, education, and maintenance.
- Upon Paula’s death, the Family Trust was to terminate and the remaining property was to be divided for the benefit of the husband’s adult children, Rebecca Rachins and Richard Minassian, through separate trust shares.
- After prior litigation involving the same estate plan, a trust protector amended the instruments to clarify that, at Paula’s death, the existing trust would terminate and the remaining corpus would be transferred to newly created trusts for the children’s benefit.
- The children alleged Paula mismanaged or dissipated Family Trust assets and sued regarding her administration of the trust.
- The trial court dismissed claims against Paula on the ground that the children lacked standing because they were not beneficiaries of the Family Trust.

## Issues

1. Whether the children had a “future beneficial interest” making them “beneficiaries” of the Family Trust under Fla. Stat. § 736.0103(4).
2. Whether the children were “qualified beneficiaries” under Fla. Stat. § 736.0103(16) when their interests would be realized only upon termination of Paula’s trust and transfer of remaining assets to new trusts.
3. Whether Paula’s broad discretion to distribute principal to herself defeated the children’s standing to challenge her administration of the Family Trust.

## Decision

- The appellate court reversed the partial final order dismissing the children’s claims against Paula for lack of standing and remanded.
- The court held the children were “beneficiaries” because they held a future beneficial interest in the Family Trust, even though any remainder would pass into new trusts for their benefit.
- The court held the children were “qualified beneficiaries” despite (a) termination of the Family Trust upon Paula’s death, (b) distribution to newly created trusts rather than outright, and (c) Paula’s broad power to invade principal during her lifetime.

## Legal Principles

- A person is a trust “beneficiary” under Fla. Stat. § 736.0103(4) if the person has a present or future beneficial interest, vested or contingent, including an interest realized through a subsequent trust created at termination of the current trust.
- A remainder interest is not negated merely because the current trust terminates and remaining assets are transferred into new trusts for the remainder beneficiaries.
- “Qualified beneficiary” status under Fla. Stat. § 736.0103(16) can include beneficiaries whose entitlement arises upon termination of a current beneficiary’s interest or upon termination of the trust, even if the remainder is held in a new trust.
- A current beneficiary’s broad discretionary power to distribute income or principal to herself does not, by itself, eliminate remainder beneficiaries’ standing to seek enforcement of fiduciary duties owed in administering the trust.

## Conclusion

The court held that the decedent’s adult children had standing to challenge the surviving spouse’s administration of the Family Trust because they were both beneficiaries and qualified beneficiaries under the Florida Trust Code, notwithstanding that their interests were contingent, realized through new trusts, and subject to the spouse’s broad power to invade trust principal.


Rachins v. Minassian, 251 So. 3d 919 (Fla. 4th DCA 2018)