Amending a Florida Trust

By David Carnes

A trust is an instrument that allows one party, known as the settlor, to contribute assets to the trust and to name another party, known as the trustee, to administer them for the benefit of named beneficiaries. Trusts are governed by state law, and Florida's trust code can be found in Chapter 736 of the Florida Statutes. The procedure for amending a trust depends on whether the trust is revocable or irrevocable.

Revocability

The settlor can revoke a revocable trust at any time and for any reason. By contrast, the legal grounds for revoking an irrevocable trust are limited. Under Florida law, a trust is automatically treated as revocable unless it is created by the terms of a will, or unless the trust deed that established the terms of the trust specifically states that it is irrevocable.

Amending a Revocable Living Trust

The settlor may amend a revocable living trust unless the terms of the trust deed specifically forbid it. If the trust deed specifies a method for amending the trust, the settlor must either use that method or revoke the trust and create a new trust containing the amended terms. If the trust deed does not specify a method for amending the trust, the settlor may amend the trust by any method "manifesting clear and convincing evidence of the settlor’s intent," such as by sending an amendment letter to the trustee or appending an amendment statement to the trust deed.

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Amending an Irrevocable Living Trust

There are two main ways to amend an irrevocable living trust: judicial and non-judicial. A court may issue an order amending an irrevocable living trust based on certain legal grounds such as a term in the trust deed that does not reflect the settlor's true intentions, or the occurrence of circumstances not foreseen by the settlor. If the trust deed sets out a method for amending the trust, such as the consent of a majority of the beneficiaries, that method may be used even over the settlor's objections.

Testamentary Trusts

A testamentary trust is created by the terms of a will. Since the trust isn't created until the settlor dies, a testamentary trust is irrevocable by definition. The settlor can modify his will at any time before he dies; however, this isn't considered a modification of the trust because the trust hasn't been created yet. After the settlor dies, the trustee and the "qualified" beneficiaries may unanimously agree to amend a testamentary trust. The term "qualified beneficiary" excludes certain types of contingent beneficiaries, such as beneficiaries who have not been born yet -- "Helen's first-born child", for example, if Helen is childless when the settlor dies -- so that their failure to consent will not stop the living beneficiaries from amending the trust. The definition of "qualified beneficiary" can be found in the definitions section of the Florida Trust Code.

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Does an Irrevocable Trust Automatically Terminate Upon a Certain Date?
 

References

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Rights of the Beneficiary of a Family Trust

A family trust is a trust in which the beneficiaries are family relations of the grantor. Since the assets of a revocable trust legally belong to the grantor, beneficiaries have no rights in trust assets that are not subordinate to the grantor's right to unilaterally revoke the trust. The assets of an irrevocable trust, by contrast, legally belong to the beneficiaries subject to the trustee's fiduciary authority. Trust beneficiaries enjoy certain rights under state law.

Amending an Irrevocable Trust Agreement & Uniform Trust Code

Trust law varies based on the state where the trust is located. The Uniform Trust Code (UTC) is a proposed law meant to be enacted across the country to promote legal consistency regarding trusts. The UTC has been enacted in 23 states and covers most trust issues, including how to amend an irrevocable trust agreement. Under the UTC, an irrevocable trust agreement can be amended when the beneficiaries and creator agree to an amendment or when there is a significant change in circumstances surrounding the trust. When attempting to amend an irrevocable trust agreement, consider consulting with a licensed attorney.

How to Change Beneficiaries of an Irrevocable Living Trust in California

Irrevocable trusts can play an important role in estate planning. However, with increased tax advantages comes a reduced flexibility in modifying the trust's terms. In California, your ability to change the beneficiaries of an irrevocable trust depends greatly on the provisions contained in the trust document, and whether all beneficiaries and the settlor consent to the modification.

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