The bargain the section strikes
A directed trust splits the job. Someone who is not the trustee, called a trust director, holds power over some part of the trust, and the trustee carries out what the director decides. This section says what the trustee owes when that happens.
Subject to subsection (2), a directed trustee shall take reasonable action to comply with a trust director’s exercise or nonexercise of a power of direction or further power under s. 736.1406(3)(a) ... and the trustee is not liable for such reasonable action.
Section 736.1409(1), Florida Statutes. The omitted words are a cross-reference gloss the statute repeats throughout the Part.
Two halves. A duty to take reasonable action to comply, and immunity for that reasonable action. The trustee is answerable for how it carries out the direction, not for whether the direction was a good idea.
The uniform act’s official comments, quoted in the article written by the Act’s Florida drafting chair, put it plainly.
The duty to take reasonable action under subsection [(1)] does not, however, impose a duty to ensure that the substance of the direction is reasonable. To the contrary, subject to subsection [(2)], a trustee that takes reasonable action to comply with a power of direction is not liable for so acting even if the substance of the direction is unreasonable.
Comment to the Uniform Directed Trust Act, as quoted in the Florida Bar Journal article cited below. The bracketed subsection numbers are the article’s, altered to match the Florida numbering.
The floor, and it is high
A directed trustee may not comply with a trust director’s exercise or nonexercise of a power of direction ... to the extent that by complying the trustee would engage in willful misconduct.
Section 736.1409(2), Florida Statutes.
Willful misconduct is a demanding standard, well above negligence and above bad faith as ordinarily understood. For a beneficiary hoping to hold a directed trustee responsible, this is the wall.
It is also undefined, and that was a choice.
Neither the uniform act nor the FUDTA defines “willful misconduct.” Nor does the Florida Trust Code. Some states, such as Delaware, do provide a definition in their statutes. The draftspersons determined that such a definition was outside of the scope and purpose of implementing FUDTA, and may have a collateral impact on other areas of Florida statutory law that employ the term “willful misconduct” without a statutory definition, even if the definition was statutorily limited to the Florida Trust Code or the FUDTA provisions.
Rubin and Rubin, The Florida Bar Journal, March/April 2022.
This changed the law in 2021, and by how much
Before the Act, the governing provision was former section 736.0808(2). The article describes it.
It provided that if the terms of a trust conferred on a person other than the settlor of a revocable trust the power to direct certain actions of the trustee, the trustee was required to act in accordance with the direction unless the attempted exercise was manifestly contrary to the terms of the trust or the trustee knew that the attempted exercise would constitute a serious breach of fiduciary duty that the person holding the power owed to the beneficiaries of the trust.
Rubin and Rubin, describing former section 736.0808(2).
So the old law gave a trustee two grounds to refuse. One was a direction manifestly contrary to the trust, the other a direction known to be a serious breach of the director’s own fiduciary duty. Both are lower bars than willful misconduct, and the second looked outward at the director’s conduct rather than inward at the trustee’s.
The article states the consequence in one sentence, and we quote it because it comes from the person who chaired the drafting committee.
The standard is a departure from the standard described above under prior law.
Rubin and Rubin, The Florida Bar Journal, March/April 2022.
The justification offered is consistency. Willful misconduct was already the standard when one cotrustee directed another, and once a trust director carries the same fiduciary duties as a trustee, the drafters saw no reason to treat the two situations differently. The article adds that no compelling policy reason could be discerned for a different limitation depending on whether the person directing is a cotrustee or a trust director.
Both the article and our own reading agree on one further point about the old provision. There was little case law interpreting it. The section it replaced was barely tested, and the section that replaced it has not been tested at all.
The one check the trustee must actually make
Before complying with a trust director’s exercise of a power of direction, the directed trustee shall determine whether or not the exercise is within the scope of the trust director’s power of direction. The exercise of a power of direction is not outside the scope of a trust director’s power of direction merely because the exercise constitutes or may constitute a breach of trust.
Section 736.1409(3), Florida Statutes.
Read the second sentence twice. A direction that may itself be a breach of trust is still within scope, and the trustee still has to follow it unless complying would be the trustee’s own willful misconduct.
That sentence does not appear in the uniform act. It is a Florida addition, and the article explains exactly why it was added.
A concern exists that this commentary on the trustee’s duty to act in accordance with the trust terms may be interpreted to support a claim that a director’s breach of trust in giving a direction is per se a direction that is outside of the scope of the granted power of direction or further powers, and, thus, following the direction would be a breach of trust by the directed trustee.
Thus, subsection (3) was added to clarify that such an interpretation by reason of the uniform act comments would be improper.
Rubin and Rubin, The Florida Bar Journal, March/April 2022.
Nothing in the statute reveals that, and it is the kind of thing only the drafters could tell you. The uniform act’s own comments say a trustee should not comply with a direction outside the director’s power. Florida’s drafters worried a court might read that to mean any improper direction is automatically outside the power, which would have collapsed the protection the section is built to give. Subsection (3) forecloses that reading.
Releases, and when they fail
Subsection (4) stops a director signing away a trustee’s liability too easily. An exercise of a power of direction releasing a trustee or another director from liability for breach of trust is not effective in three situations. Those are where the breach involved willful misconduct, where the release was induced by improper conduct in procuring it, or where the director did not know the material facts relating to the breach.
The three are independent, and the last is the one most likely to be usable. A release given by a director who was not told what happened is no release at all.
What a trustee should actually do
A trustee that thinks a direction is unwise, but not willful misconduct, is in a genuinely difficult position. It must comply, and complying may harm the beneficiaries. The statute supplies an answer.
A directed trustee that has reasonable doubt about its duty under this section may apply to the court for instructions, with attorney fees and costs to be paid from assets of the trust as provided in this code.
Section 736.1409(5), Florida Statutes.
The threshold is reasonable doubt, not certainty of wrongdoing, and the fees come from the trust. For a professional trustee facing a direction it dislikes, that is the practical route, and it is the one this section is built to push you toward.
Finally, subsection (6) allows the terms of the trust to impose duties or liabilities on a directed trustee in addition to those in the Part. The willful misconduct floor is a default, not a ceiling, and a settlor who wants a directed trustee held to more can say so.
No court has construed any of this
Our review found no decision citing this section, searched with a Florida court filter and again nationwide, at every precedential status. The Part is five years old and untested.
So the questions that will decide real cases are all open. What willful misconduct means when nobody has defined it. How far the scope check in subsection (3) requires a trustee to go. And whether a trustee who complies with a direction it privately believes improper, without applying for instructions, has taken reasonable action within subsection (1).