Judicial Modification Of Trust Barred By Trust Terms [Florida]

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More often than not, the resolution of a trust dispute involves a settlement agreement with changes made to a trust instrument. Such modifications may be accomplished under provisions of Florida’s Trust Code (Fla.Stats. Chapter 736) that allow the trustee and beneficiaries, or the courts, to modify a trust agreement because it is in the best interests of the beneficiary, to accomplish a grantor’s intent, or for other appropriate purposes.

What if the trust instrument contains a provision that bars a court from modifying the trust terms - can this be used to bar a court modification?

In a recent Florida court case, the answer was yes. In that case, the court reversed a trial court that had approved a settlement agreement modifying a trust instrument when the the trust included a clause that read to “the extent permitted by law, I prohibit a court from modifying the terms of this Trust Agreement.”

Does this mean that such a clause will always function to divest a court (or the trustee and beneficiaries) of the ability to modify the terms of a trust? The answer to that is no.

Chapter 736 has numerous provisions relating to the ability of a court or interested parties to modify a trust. The provisions are fairly specific about when the terms of a trust that prohibit a modification will be given effect, and when it will be ignored. Many of these provisions turn on when the trust instrument was created.

The provisions are too many and detailed to describe in depth here. Interested readers should examine Fla.Stats. §§736.0105(2), 736.04115(3)(b), 736.0413, 736,0415, 736.0416, and 736.0412(4)(b).

Bellamy v. Langfitt, McMerty, and Northern Trust N.A., 37 Fla.L.Weekly D360 (3rd DCA, February 8, 2012)

 

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Charles (Chuck) Rubin
Gutter Chaves Josepher Rubin Forman Fleisher P.A.

A tax and business attorney who assists clients in preserving & enhancing individual, family &... View Profile »


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