Determining whether it is possible to close a Florida trust depends on different factors, such as how the trust was originally structured, the language used in the trust instrument, and whether the trustor is still alive.
Without proper legal guidance, closing a trust may become a herculean task. Keep reading to find out how to close a trust in Florida.
Closing a Florida Trust – Understanding the Concept
Before identifying whether a trust may be closed, it is crucial to review the trust instrument. There are two types of trusts in Florida – revocable trusts and irrevocable trusts.
As implied by the term itself, revocable trusts may be modified, amended, or even terminated during the lifetime of the trust creator (referred to as trustor or settlor). Therefore, as long as the trustor is still alive, he or she has the authority to close the trust at any given time.
Contrarily, irrevocable trusts have a stricter nature, not permitting modifications or amendments in the trust instrument. Therefore, a trustor may not terminate an irrevocable trust without a proper justification.
Once the trustor of a revocable (living) trust passes away, the trust automatically becomes irrevocable. Hence, regardless of how it was originally designed, the same irrevocable trust rules are applied to revocable trusts upon the trustor’s death.
How Do You Close a Trust in Florida? – Non-Judicial Termination
The first way to close an irrevocable trust upon the trustor’s death is solving the matter out of the court. Florida Statutes §736.0412 (1) states that “after the settlor’s death, a trust may be modified at any time as provided in s. 736.04113 (2) upon the unanimous agreement of the trustee and all qualified beneficiaries.”
Nonetheless, Florida Statutes §736.0412 (4) provide that the statute does not apply to
- Any trust created prior to January 1, 2001
- Any trust created after December 31, 2000, if, under the terms of the trust, all beneficial interests in the trust must vest or terminate within the period prescribed by law (…), unless the terms of the trust expressly authorize nonjudicial modification
How Do You Close a Trust in Florida? – Judicial Termination
Under Florida law, it is not possible to file in court to modify or terminate an irrevocable trust during the trustor’s lifetime – regardless of the plaintiff’s interest in the trust. Conversely, upon the trustor’s death, it is possible to file for the judicial termination of a trust.
Florida Statutes §736.04113 (1) provide that “upon the 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:
- The purposes of the trust have been fulfilled or have become illegal, impossible, wasteful, or impracticable to fulfill
- 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
- A material purpose of the trust no longer exists”
Specifically, Florida Statutes §736.04113 (2)(b) states that “in modifying a trust under this section, a court may (…) terminate the trust in whole or in part.”
Do You Need to Close a Trust? – Immediately Contact You Florida Probate Lawyer
Closing a Florida trust requires expert legal guidance. Waste no time – call Attorneys Romy B. Jurado and Diana C. Collazos at (305) 921-0976 or email Romy@juradolawfirm.com to schedule a consultation.