Estate Planning and Tax Lawyer Blog

What are rules of construction in the first place you may ask? Rules of construction are the generally rules you must use when reading a trust. Think of them as the reading glasses you must use when reading a trust. Each state has its own set of rules. Florida Statutes 736.1101 – 736.1108 encompass Florida’s rules of construction.

The first basic rule of construction is that the intent of the settlor expressed in the terms of the trust control the dispositions made from the trust. So if it is the settlor’s intent that the trust money be used for education, then the Trustee shall only distribute trust assets for educational purposes. If the settlor’s intent is to pay for the beneficiaries health, education and maintenance, then the Trustee shall only pay for those ascertainable standards.

In determining who may be a beneficiary if the beneficiaries are the children or “issue” of the settlor, the rules of construction in determining paternity and relationships for the purposes of intestate succession apply in determining the settlor’s children or “issue”, including but not limited to adopted persons and persons born out of wedlock. The rules may be found in my blogs from October 26, November 1 and November 28, 2011.

Generally, if you insert in your trust language such as a gift to “my descendants” but do not say anything else, that gift will be read as to say a gift to “my descendants, per stirpes”. Remember, per stirpes means that the children of any predeceased beneficiary within a generation step up and take their parent’s share of the gift. The rules of per stirpes and per capita may be found in my blog from October 15, 2011.

Just as in a probate estate, a killer (who is a beneficiary of a trust) is not entitled to receive property from the trust by reason of their involvement in the settlor’s death. The rules relating to Florida’s ‘’slayer statute” may be found in my blog from December 26, 2011.

Say you create a trust while you are married and your trust provides for your spouse upon your death. Then the unfortunately event occurs that you and your spouse get divorced a year later and you never change your estate planning documents to remove your ex-spouse. A year later, you pass away. Florida’s rules of construction come to the rescue…a bit. Your trust will read as if your spouse predeceased you and your assets will pass accordingly. However, this rule of construction only applies to your estate plan and not to any life insurance or retirement plan beneficiary designations. If your ex-spouse is still named on any beneficiary designation upon your death, the assets will pass according to your beneficiary designation and not your estate plan. Moral of the story – if you get divorced, change your beneficiary designations and estate plan!

Florida’s antilapse statute also applies to future interest within a trust. The general antilapse rules in Florida may be found in my blog from December 23, 2011. However, the antilapse statute may also be voided if a clear intent is shown in the trust that the antilapse statute is to not apply.

Finally, Florida’s construction rules are the same as the probate rules when it comes to no contest clauses within an estate plan. In Florida, a no contest clause, no matter what type of an estate plan you have, is unenforceable.