Judicial Modification of Trusts

Trusts are created for a variety of reasons.  Whether it is for tax and creditor protection or because the beneficiary is still a minor, there may be myriad reasons for their preparation.  Nevertheless, the initial purpose behind the execution of a trust may get lost or become impractical as time passes or the circumstances that were present at the time of its execution are no longer present or have changed making judicial modification of trusts necessary.

In contemplation of such changing of circumstances, the Florida legislature enacted Fla. Stat. §736.04113 which allows a trustee or a qualified beneficiary to petition the court for an order to modify or terminate a trust in the event that settlor’s purpose behind executing the trust is no longer being satisfied.    The statute states, in relevant part, as follows:

(1)    Upon application of a trustee of the trust or any qualified beneficiary, a court at any time may modify the terms of a trust that is not then revocable in the manner provided in subsection (2), if:

  1. The purposes of the trust have been fulfilled or have become illegal, impossible, wasteful, or impracticable to fulfill;
  2. Because of circumstances not anticipated by the settlor, compliance with the terms of the trust would defeat or substantially impair the accomplishment of a material purpose of the trust; or
  3. A material purpose of the trust no longer exists.

The courts have extensive leeway and discretion to modify, terminate, direct or permit some action if they believe that that such action is required and necessary under Fla. Stat. §736.04113.  Although the settlor’s purpose and intent behind executing a trust is paramount and will always be taken into consideration, the legislature understood that circumstances change and judicial modification of a trust may be necessary and appropriate.  If the settlor is no longer able to make changes to his or her trust then the court may be used to amend or terminate the trust.

If you have a question about judicial modification of a trust in Florida, call the attorneys at Adrian Philip Thomas, P.A. for a free consultation.

 

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