Estate Planning and Tax Lawyer Blog

A few years back, the Florida Legislature passed a new trust code to oversee the administration of trusts. Florida Statute 736.0105 lays out in detail what rules must be within a Florida trust under the Florida Trust Code.

These are some of trust provisions that must be within a Florida trust:

1. The requirements for creating a trust (there must be a Trustee, a beneficiary and property owned by the trust).
2. The duty of the Trustee to act in good faith, in the interests of the beneficiaries and according to the terms of the trust document. (A Trustee must always be thinking of the beneficiaries and not their own interests)
3. The purpose of the trust must be lawful and possible to achieve. (A trust cannot be created for a criminal purpose)
4. The formalities for executing a trust (the same for executing a Will in Florida).
5. The power of a court to modify or terminate a trust. (The court can always modify or terminate a trust)
6. The ability of the settlor/grantor to modify the trust (for revocable trusts).
7. The Trustee’s duty to pay expenses and obligations of the settlor’s estate. (The Trustee must pay for the expenses of the settlor’s estate if the estate does not have enough assets of its own.)
8. The Trustee’s duty to file a notice of trust at the settlor’s death. (The notice of trust tells any and all creditors of the setttlor’s estate to go and see the Trustee to have the claim satisfied.)
9. The right of a Trustee to decline to serve as Trustee or resign as Trustee. (A named Trustee cannot be forced to serve.)
10. The power of the court to modify the Trustee’s compensation based upon the Trustee’s specific duties. (A Trustee is entitled to be compensated for their services and may receive additional compensation depending on the assets owned by the trust.)
11. The duty to notify qualified beneficiaries of an irrevocable trust’s existence, who the Trustee is and the rights to information regarding the trust. (A “qualified beneficiary” is defined as any living beneficiary who is currently receiving trust income or principal or is entitled to receive trust income or principal if the current beneficiary’s interest terminated. An example would be if dad created a trust with mom as the beneficiary after dad’s death and the 2 kids to receive the remainder after mom’s death, the qualified beneficiaries would be mom and the 2 kids.)
12. The duty to provide a complete copy of the trust instrument and to account to qualified beneficiaries. (The Trustee must provide a copy of the trust to qualified beneficiaries and account for the assets of the trust.)
13. The duty to respond to inquiries from a qualified beneficiary. (The Trustee cannot ignore qualified beneficiaries questions.)
14. The effect of a penalty clause for contesting a trust (no contest clauses are not valid in Florida).

Theses are just a very few of the requirements of a trust under the Florida Trust Code. Besides what is required under 736.0105, a trust is very flexible and can say almost anything else.