The whole section
If the happening of an event, including marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee’s lack of knowledge.
Section 736.1010, Florida Statutes. Enacted in 2006 and never amended since.
The situations it is written for are ordinary ones. A trust pays support to a former spouse until they remarry, and they remarry without telling anyone. A distribution is conditioned on finishing a degree, and the beneficiary finished two years ago. A share passes to the next generation on a beneficiary’s death, and the trustee kept paying the deceased beneficiary’s account for months. In each case money went to the wrong place, and the question is whether the trustee has to make it good.
The list is introduced with including, so it illustrates rather than limits. The real boundary is that the event must affect the administration or distribution of the trust.
The condition is the whole provision
Read the sentence again and notice that the protection is not given to a trustee who did not know. It is given to a trustee who has exercised reasonable care to ascertain the happening of the event.
That is an active requirement. It contemplates a trustee who took steps and still did not find out, which is a very different person from a trustee who never enquired. On the face of the statute, a trustee who has paid the same distribution for a decade without ever asking whether the conditions attached to it still hold has not exercised reasonable care to ascertain anything, and the safe harbour is not theirs.
Nothing in the section says what care is reasonable, and no Florida decision has filled that in. Sensibly it will depend on how much turns on the event, how easily the trustee could have checked, and what the trustee already had reason to suspect. A trustee administering a remarriage condition who has annual contact with the beneficiary is differently placed from one administering a trust for a beneficiary they have never met.
What this section is not
It is worth being blunt about the limits, because the section is easy to over read. We initially expected from its number and neighbours that it would be a general limitation on a trustee’s personal liability. It is not.
The protection reaches one thing only, a loss resulting from the trustee’s lack of knowledge of a triggering event. It has nothing to say about a trustee who invested imprudently, who commingled trust money with their own, who never produced an accounting, who paid themselves too much, or who preferred one beneficiary over another. Those questions live in section 736.0801, section 736.0802, section 736.0810 and their neighbours, and the remedies live in section 736.1001.
Nor does it decide who bears the loss. It says the trustee is not liable for it. Where the money went to the wrong beneficiary, the question of recovering it from the person who received it is a separate one the section does not address.
No Florida court has construed this section
Our review found no decision citing section 736.1010 anywhere in the Florida state courts, the Florida federal district and bankruptcy courts, or the Eleventh Circuit, searching every precedential status. We confirmed the search was working by running the same query against a section that does return results, because a zero that comes from a broken query is worth nothing.
So the questions that would decide a real dispute are open. What reasonable care to ascertain requires, and whether it implies any periodic duty to check. Whether a trustee can discharge it by putting the obligation on beneficiaries to report changes, which is what many trust instruments try to do. Whether the protection survives where the trustee could have discovered the event from public records, a question our page on section 736.1008 shows Florida courts have answered restrictively in the limitations context. And whether the trustee or the beneficiary bears the burden of proving that reasonable care was or was not exercised.