## Facts

- Milton Wallace and his wife, Patricia, created and funded an irrevocable trust with their assets.
- Milton served as trustee and remained a major lifetime beneficiary of the trust; their sons, Mark Wallace and Hardy Wallace, were also beneficiaries.
- After Patricia’s death, Milton allegedly made large and improper gifts using trust funds, including transfers to new friends who were not beneficiaries.
- Hardy, through his guardian, Comprehensive Personal Care Services, Inc. (CPCS), filed litigation to compel Milton’s compliance with the marital agreement and trust.
- Mark joined the case and filed an amended crossclaim against Milton; Count IX sought Milton’s removal as trustee based on Milton’s alleged mental condition and alleged misuse of trust assets.
- The trust instrument contained provisions addressing trustee disability and removal, including a definition of “disabled” (unable to manage personal affairs or assets due to mental or physical impairment) and procedures for making that determination, including a committee-of-physicians process and a court-capacity determination provision.
- Mark did not pursue removal through the trust’s internal disability procedures; instead, he sought removal under statutory provisions of the Florida Trust Code (including the trustee-removal statute and statutory remedies for breach).
- Milton moved to dismiss Count IX, arguing that the trust’s disability provisions controlled and that removing him based on mental incapacity would effectively deprive him of control over property he contributed to the trust; he claimed removal should require the same type of incapacity determination and safeguards used in Florida guardianship proceedings.
- The trial court dismissed Count IX for failure to state a claim, reasoning Mark could not seek relief contrary to the trust terms and contrary to the procedural protections for establishing incapacity in guardianship proceedings.
- Mark appealed the dismissal of Count IX.

## Issues

1. Whether a beneficiary states a cause of action to remove a trustee under the Florida Trust Code when the trust instrument provides specific disability/removal procedures that the beneficiary did not use.
2. Whether removal of a settlor-trustee based on alleged mental impairment requires a guardianship-style incapacity determination as a prerequisite to pleading a statutory trustee-removal claim.

## Decision

- The Third District Court of Appeal reversed the order dismissing Count IX and remanded.
- The court held that Mark’s allegations were sufficient at the motion-to-dismiss stage to state a claim for removal of Milton as trustee under the Florida Trust Code.
- The court rejected the trial court’s requirement that Mark first use the trust’s internal disability procedures or obtain a guardianship-level incapacity determination before pursuing statutory trustee removal.

## Legal Principles

- Florida’s Trust Code provides statutory grounds and remedies for trustee removal (including removal as a remedy for breach) that may be invoked in court when properly pled.
- A trust’s internal process for determining trustee disability does not eliminate the court’s statutory authority to remove a trustee under the Trust Code’s mandatory provisions.
- Trustee removal focuses on whether the trustee is fit to administer the trust and whether administration is being carried out in a manner consistent with the trust’s purposes and the beneficiaries’ interests; it is not the same proceeding as declaring a person incapacitated and appointing a guardian.
- At the pleading stage, a court must treat well-pled allegations as true; allegations of mental impairment coupled with alleged improper transfers and mismanagement of trust assets can be sufficient to proceed on a statutory removal claim.
- A trustee’s status as the settlor and a major beneficiary does not, by itself, bar application of statutory removal provisions when the complaint alleges facts that fit statutory removal grounds.

## Conclusion

Wallace held that a beneficiary adequately pled a statutory claim to remove a settlor-trustee by alleging mental impairment and improper gifting of trust assets, and that the trial court erred by dismissing the claim based on the trust’s disability procedures and guardianship-style incapacity safeguards; the dismissal was reversed and the case remanded for further proceedings.


Wallace v. Comprehensive Personal Care, 306 So. 3d 207 (2020)