{"id":358836,"date":"2026-07-30T18:35:45","date_gmt":"2026-07-30T18:35:45","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/legal\/how-much-is-a-reasonable-reserve-for-a-former-trustee\/"},"modified":"2026-07-30T18:35:45","modified_gmt":"2026-07-30T18:35:45","slug":"how-much-is-a-reasonable-reserve-for-a-former-trustee","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=358836","title":{"rendered":"How Much is a Reasonable Reserve for a Former Trustee"},"content":{"rendered":"


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When a trustee resigns or is removed in Florida, they cannot simply walk away leaving the trust to fend for itself. Florida Statutes \u00a7 736.0707 grants departing trustees the right to retain a \u201creasonable reserve\u201d for payment of debts, expenses, and taxes. But how much is reasonable? The recent decision in\u00a0Mastriana v. Brown Brothers Harriman Trust Company, N.A.<\/em><\/a>, No. 4D2024-0950 (Fla. 4th DCA May 14, 2025), provides essential guidance for trust practitioners navigating this complex issue.\u200b<\/p>\n

The Statutory Framework: F.S. \u00a7 736.0707<\/h2>\n

Florida\u2019s Trust Code imposes continuing obligations on trustees even after their removal. The statute provides:<\/p>\n

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\u00a7 736.0707(2), Fla. Stat.:<\/strong>\u00a0\u201c[A] trustee who has resigned or been removed shall within a reasonable time deliver the trust property within the trustee\u2019s possession to the cotrustee, successor trustee, or other person entitled to the property,\u00a0subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.<\/strong>\u201c\u200b<\/p>\n<\/blockquote>\n

Until trust property is delivered to a successor trustee, the former trustee retains fiduciary duties and \u201cthe powers necessary to protect the trust property\u201d. This statutory framework creates a delicate balance: trustees must transfer assets promptly while ensuring adequate funds remain to cover legitimate administrative expenses.\u200b<\/p>\n

Case Study: The $8.9 Million Reserve<\/h2>\n

Background<\/h2>\n

The\u00a0Mastriana<\/em>\u00a0case involved the James M. Salah Trust\u2014a charitable trust valued at approximately $111.6 million. Brown Brothers Harriman Trust Company, N.A., served as trustee until its removal in September 2016. Upon removal, Brown Brothers transferred approximately $111.6 million to the successor trustee but retained $8,910,829.44\u2014roughly 7.98% of the total trust\u2014as a reserve.\u200b<\/p>\n

The successor trustee sued, alleging that Brown Brothers breached its fiduciary duties by retaining an \u201cexcessive and unreasonable reserve\u201d and by imprudently investing the reserved funds.\u200b<\/p>\n

The Trial Court\u2019s Analysis<\/h2>\n

After a non-jury trial in March 2023, Judge Kenneth Gillespie of the 17th Judicial Circuit entered judgment in favor of Brown Brothers<\/a>. The trial court\u2019s analysis offers practitioners a roadmap for justifying reserve amounts:<\/p>\n

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\u201cThe Defendant established that it was the company\u2019s standard practice to hold a reserve of 10% of the total funds. On this point, Defendant provided three reasons which it found prudent to maintain a 10% percent reserve: (1) the fear that it would be sued or brought in as a party to an ongoing Massachusetts malpractice lawsuit, (commonly known as the Sally & Fitch litigation), which it determined that its potential liability exposure could be as high or greater than $20,000,000.00); (2) the need to complete a complex final accounting of the Trust and as personal representative of James Salah\u2019s Estate; and (3) the need to potentially address any objections to its Trust and Estate accountings (in light of the then successor trustee\u2019s unwillingness to sign a consent and waiver).\u201d\u200b<\/p>\n<\/blockquote>\n

Factors Justifying the Reserve<\/h2>\n

The trial court credited several events that validated Brown Brothers\u2019 concerns:\u200b<\/p>\n