How to Protect Your Trust Fund from Mismanagement: Lessons from the Govoni Scandal

What if the professional you’ve entrusted to safeguard your child’s special‑needs inheritance is secretly draining it dry… right under your nose, while you’re living under a different state’s laws? This isn’t fiction; it happened in Florida, and it should terrify every California parent preparing a trust.

I’ve been in this profession long enough to know how easily trust funds can be abused, but I’ve never seen a case as egregious as Leo Govoni’s. As a seasoned estate‑planning attorney, I’m enraged that someone could exploit Florida’s weaker oversight and murky industry standards to swindle over $100 million from 1,500 families. And the kicker? Many of those families live in, or drafted their trusts under, California law; the state with significantly stronger consumer safeguards.

What Went Down in Florida and Why it Matters to California Families

Govoni, known for running the Center for Special Needs Trust Administration in Florida, is now facing charges from the FBI for allegedly orchestrating a massive Ponzi-like scheme: diverting trust funds, meant for medical care, therapy, daily support, etc… to pay for his own lavish lifestyle: private jets, brewery shares, sports suites, massive political donations, all the rackets. These trusts include those created in California or by California-based families who moved later, banking on Florida’s favorable tax or living conditions.

Two Crucial Differences Between California and Florida Trust Laws

1. Rule Against Perpetuities (Trust Duration)

• In California, trusts must generally terminate within 90 years due to USRAP
• Florida, by contrast, permits trusts to last up to 360 years, effectively allowing dynasty trusts. That extended lifespan makes Florida a beacon for long-term wealth, but it also reduces oversight frequency. This potentially shelters bad actors like Govoni for generations.

2. Spendthrift & Creditor Protection

• Both states permit spendthrift trust provisions, shielding assets from beneficiaries’ creditors
• However, Florida’s statutes allow some creditor claims to bypass these protections, notably for child support or alimony. Additionally, Florida still lacks asset‑protection statutes for settlor‑funded trusts, meaning settlor’s creditors may reach assets, even while recipient-beneficiary protections remain intact. California provides stronger protections, and its community property laws disallow hiding assets through private trusts as easily.

Why These Differences Empower Predators

Florida’s longer trust terms mean fewer check-ins. This allows mismanagement to go undetected for decades. Its weaker protections for settlor-funded trusts and nuanced creditor carve-outs also offer chaotic legal cover for ill-intentioned trustees. Combine that with Florida’s nearly unregulated trust service providers, and you have the perfect breeding ground for exploitation.

Now, imagine a California family relocating to Florida, tempted by no state income or estate taxes and drafting a new trust or moving an existing one without legal review. They might be setting themselves up for decades of vulnerability, trusting a person or institution with minimal accountability.

A Stark Warning to California Parents (and Adult Children Planning for Elderly Parents)

1. Don’t assume state-to-state validity covers safety

• Even though a California trust is technically valid in Florida, that doesn’t protect your assets from trust-law loopholes. Trusts should be reviewed by a qualified estate lawyer when crossing jurisdictional lines.

2. Choose trustees with utmost prudence.

• Anything less than a reliable, ethical, independently audited trustee, especially for special-needs trusts, is asking for trouble. Govoni leveraged victims’ trust expertly, but not legally.

3. Heighten oversight and transparency

• Include mandatory audits and annual accounting by independent CPAs.
• Appoint a trust protector with the power to review, replace, or enforce terms.
• Proactively mandate state‑law analytics: Does your trust’s governing law align with protection levels in Florida or California?

4. Be proactive when relocating

• California’s community property rules mean trusts may need adjustments, especially for married couples, as Florida’s new community property statutes are optional and structured differently.
• If you revoke a California trust to create a Florida one, don’t neglect specialist clauses for special-needs beneficiaries.

5. Enable red flags and swift action

• Govoni delayed document production, ignored subpoenas, and incurred court fines for stonewalling. But the families that work with him waited too long . If a trustee resists transparency, act fast.

Govoni’s alleged theft is not just a Florida issue. It’s a red alert for every Californian sitting on a trust or considering drafting one while living out-of-state. The loopholes in Florida’s laws, extending trust durations, limiting creditor protections, and offering less regulatory scrutiny, create dangerously fertile ground for abuse.

If you are:

• A California parent setting up special-needs trust for your child, or
• An adult child preparing an elder-parent’s estate plan in Florida now or in the future,

Do not delay: review your trust documents now, with an estate attorney well-versed in both California and Florida law. Ensure your trustee is beyond reproach, your oversight structures are bulletproof, and your trust’s governing law aligns with your protections, not those of predatory advisors.

For more background on Leo Govoni’s shocking arrest, read the full article here: Click Here

Trusts can secure your loved ones for decades. But in the wrong hands, and under the wrong laws, they can become financial time bombs. Stay enraged. Stay vigilant. And above all, choose wisely.