Florida Trust Termination Attorneys

Ethical & Aggressive Legal Representation

While most individuals who create a trust can generally terminate or revoke it while they are alive, if it is not an irrevocable trust, trust termination is a type of modification to an otherwise irrevocable trust. Most litigation regarding trust terminations occurs when the settlor is deceased, the trust is irrevocable, and beneficiaries want to terminate the trust to receive their shares. A trust can also be terminated if it contains property that was destroyed or if the grantor specifies an end date or certain conditions are met.

Common examples of when trusts can be terminated include:

• The creator of the trust was not of sound mind when the trust was established, rendering the trust invalid
• The trust was created under duress, undue influence, mistake, or fraud
• The trust was established for an illegal purpose
• The trustee violated their duties
• Disputes arising between multiple beneficiaries

Who Can Terminate a Trust?

While the settlor of a trust is usually the only party who can terminate the trust, the following parties can also terminate a trust:

• Beneficiaries contesting or disputing the trust
• Parties negatively impacted by the trust
• Law enforcement agencies prosecuting illegal conduct

What Factors Does the Court Consider When Terminating a Trust in Florida?

Courts consider the terms and purposes of the trust, the facts and circumstances surrounding the creation of the trust, and extrinsic evidence relevant to the proposed modification or termination. While courts should consider spendthrift provisions as a factor in making decisions, the court is not precluded from modifying a trust because it contains spendthrift provisions.

What Are the Tax Implications Associated With the Termination of a Trust in Florida?  

The tax implications associated with the termination of a trust in Florida can be significant and should be carefully considered. 

• Estate Tax: The beginning estate tax rate in Florida is 37 percent, which means that terminating a trust, even one of relatively modest value, can result in substantial tax consequences.
• Income Tax: Terminating a trust can trigger income taxes, capital gains taxes, and potentially estate taxes, especially in the case of irrevocable trusts.
• Tax Filings: After the termination of a trust, there may be requirements to file tax returns in accordance with federal law, particularly if the trust earned income exceeding a certain threshold.
• Complexity: Trust termination involves navigating complex trust and tax laws, which can have implications for both the trust itself and its beneficiaries.

It's crucial for trustees and beneficiaries to seek professional guidance from legal experts to fully understand and address the tax implications specific to their trust termination in Florida.

We Can Help You Terminate a Trust in Florida

Our attorneys at Adrian Philip Thomas, P.A. are here to discuss your situation and review all of your legal options so you can make informed decisions. Our legal probate and guardianship team measures success by how satisfied our clients are with our services and representation, so you can count on us to use our full resources to pursue your case goals. We have reputation for being aggressive and confident legal advocates, so please do not hesitate to reach out to our legal team today.

To set up your free case consultation with one of our Florida trust termination lawyers, please give us a call today at (954) 764-7273.