Fla. Stat. § 736.0602 - Commentary to Florida Trust Code
Legal Commentary on Fla. Stat. § 736.0602
Fla. Stat. § 736.0602 establishes when, how, and to what extent a trust settlor may revoke or amend a trust. The statute section also explains the effect of such an action.
Importantly, any part of Fla. Stat. § 736.0602 may be overridden by a trust’s terms; there is no mention of Fla. Stat. § 736.0602 in Fla. Stat. §736.0105. However, the terms of a trust may not override the various statute sections referenced by Fla. Stat. § 736.0602.
Revocable By Default
Fla. Stat. § 736.0602(1) establishes that a trust is revocable by default, assuming that the trust was created after July 1, 2007 (the effective date of the Florida Trust Code). The default state of revocability does not apply to trusts created prior to July 1, 2007. For trusts created prior to July 1, 2007, a trust is irrevocable unless a right to revoke is reserved in the terms of the trust. See Fla. Nat. Bank of Palm Beach Cty. v. Genova, 460 So. 2d 895, 896 (Fla. 1985) quoting Restatement (Second) of Trusts § 330 (“The settlor has power to revoke the trust if and to the extent that by the terms of the trust he reserved such a power”).
Revocation or Amendment of a Trust with Multiple Settlors
Under Fla. Stat. § 736.0602(2), a revocable trust may be created by multiple settlors.
Fla. Stat. § 736.0602(2)(a) addresses a revocable trust created by two spouses containing community property. A community property trust established under Fla. Stat. § 736.1503 would fall under § 736.0602(2)(a), as would a trust containing community property from a different jurisdiction. To the extent that the trust contains community property, each spouse has the authority to revoke the trust. However, as to the community property in the trust, the trust may only be amended by both spouses acting together. This is a simple rule when a trust contains only community property. However, if a trust contains both community property and non-community property, then any amendment by a single spouse will only affect the non-community property.
Fla. Stat. § 736.0602(2)(b) addresses a revocable trust that has multiple settlors and holds property other than community property. This includes all trusts created by multiple settlors who are not married to each other. It also includes spouse-settlors who create a trust which contains non-community property. Because Florida does not generally have community property (absent a community property trust or property from another jurisdiction), most Florida trusts with multiple settlors fall under Fla. Stat. § 736.0602(2)(b). To the extent that the trust contains non-community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that the settlor’s contribution. Thus, if Frank contributes $10 to a joint trust and Myrtle contributes $90 to that same joint trust, Frank can only amend or revoke the trust as to his $10.
If a trust created by multiple settlors is amended or revoked by anything less than all the trust settlors, then the trustee must notify the other settlors of the amendment/revocation. The notification is required to be “prompt”.
How to Amend/Revoke a Revocable Trust
Subsection (3) explains that a settlor may revoke/amend a trust by complying with the method of revocation/amendment provided in the terms of the trust. If the trust provides a method of revocation/amendment, then that method must be followed. However, if a trust provides no method for revocation/amendment, then the settlor may revoke/amend a trust via any method manifesting clear and convincing evidence of the settlor’s intent, including by means of a later-executed will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust.
Importantly, no method of trust amendment/revocation can contradict Fla. Stat. § 736.0403(2), which states:
(a) No trust or confidence of or in any messuages, lands, tenements, or hereditaments shall arise or result unless the trust complies with the provisions of s. 689.05.
(b) The testamentary aspects of a revocable trust, executed by a settlor who is a domiciliary of this state at the time of execution, are invalid unless the trust instrument is executed by the settlor with the formalities required for the execution of a will in this state. For purposes of this subsection, the term “testamentary aspects” means those provisions of the trust instrument that dispose of the trust property on or after the death of the settlor other than to the settlor’s estate.
First, any trust amendment/revocation must comply with Florida’s statute of frauds regarding trusts found in Fla. Stat. § 689.05. No trust dealing with real property may be oral. Thus, a trust amendment/revocation cannot result in an oral trust for real property.
However, the biggest potential pitfall here is probably Fla. Stat. § 736.0403(2)(b), which forbids the execution of testamentary aspects of a trust unless will formalities are followed during the execution. Those formalities are found in Fla. Stat. § 732.502(1):
(1)(a) Testator’s signature.—
1. The testator must sign the will at the end; or
2. The testator’s name must be subscribed at the end of the will by some other person in the testator’s presence and by the testator’s direction.
(b) Witnesses.—The testator’s:
1. Signing, or
2. Acknowledgment:
a. That he or she has previously signed the will, or
b. That another person has subscribed the testator’s name to it,
must be in the presence of at least two attesting witnesses.
(c) Witnesses’ signatures.—The attesting witnesses must sign the will in the presence of the testator and in the presence of each other.
These formalities must also be followed whenever the testamentary aspects of a trust are amended. Kelly v. Lindenau, 223 So. 3d 1074, 1076-77 (Fla. 2d DCA 2017) (“[A] trust—or an amendment thereto—must be signed by the settlor in the presence of two attesting witnesses and those witnesses must also sign the trust or any amendments in the presence of the settlor and of each other. These requirements are strictly construed.”) Because the formality requirements under Fla. Stat. § 736.0403(2) are mandatory under 736.0105(2)(i), even trust amendments that conform with the method of amendment laid out in the trust instrument must also comply with will formalities.
Procedure After Trust Revocation
According to subsection (4), a trustee is required to deliver all trust property “as the settlor directs” upon the revocation of a revocable trust. Typically, this would mean a return of assets to the settlor. However, the settlor could direct that the assets go to a third party. If so, the trustee would be obligated to follow that direction.
Following the settlor’s direction after revocation can get complicated when a trust has multiple settlors who each contributed separate property into the trust. To return to the example above, if Frank contributes $10 to a joint trust and Myrtle contributes $90 to that same joint trust, Frank can only amend or revoke the trust as to his $10. If Frank revokes the trust as to his $10, then the only Settlor of that $10 is Frank (unless the trust terms require otherwise). To understand this, one need only look at the definition of “settlor.” Alternatively, if both Frank and Myrtle revoke the trust, then Frank is in charge of the $10 and Myrtle is in charge of the $90. Thus, a trustee would need to be careful to treat each settlor as the distinct owner of each portion of the trust assets and to deliver each portion according to the directions of the correct settlor.
Actions Made by Settlor’s Agent Under Power of Attorney or Guardian
Under subsection (5), a settlor’s agent-in-fact may revoke, amend, or distribute a trust so long as such revocation, amendment, or distribution is authorized under Fla. Stat. § 709.2202. This is a reference to Fla. Stat. § 709.2202(1)(b), under which a separate initial or signature is required next to any specific enumeration on a power of attorney instrument regarding the ability to amend, modify, revoke, or terminate the trust. In addition, under Fla. Stat. § 709.2201, an agent under a power of attorney would only have the ability to distribute trust assets if that power is specifically enumerated in the power of attorney instrument.
Under subsection (6), a settlor’s guardian of the property may only revoke, amend, or distribute a trust “as provided in s. 744.441”. Fla. Stat. § 744.441 requires guardians to seek court approval before creating or amending revocable trusts and before exercising any “power that the ward might have lawfully exercised,” which likely includes the power to revoke a trust or distribute trust property. Thus, a guardian over property should generally seek court approval before attempting to revoke, amend, or distribute a trust.
No Liability When Trustee Not Informed of Amendment of Revocation
Subsection (7) protects trustees who have not been informed of revocation. Thus, in order for a trustee to incur the duty under Fla. Stat. § 736.0602(4) to deliver trust property as the settlor directs after trust revocation, the trustee must be informed of that revocation. Similarly, if a settlor amends a trust, then the trustee would need to be informed of that amendment before the trustee could be held liable for not following the terms of that amendment.
Text of Fla. Stat. § 736.0602
Revocation or amendment of revocable trust.—
(1) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection does not apply to a trust created under an instrument executed before the effective date of this code.
(2) If a revocable trust is created or funded by more than one settlor:
(a) To the extent the trust consists of community property, the trust may be revoked by either spouse acting alone but may be amended only by joint action of both spouses.
(b) To the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor’s contribution.
(c) Upon the revocation or amendment of the trust by fewer than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.
(3) Subject to s. 736.0403(2), the settlor may revoke or amend a revocable trust:
(a) By substantial compliance with a method provided in the terms of the trust; or
(b) If the terms of the trust do not provide a method, by:
1. A later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust; or
2. Any other method manifesting clear and convincing evidence of the settlor’s intent.
(4) Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.
(5) A settlor’s powers with respect to revocation, amendment, or distribution of trust property may be exercised by an agent under a power of attorney only as authorized by s. 709.2202.
(6) A guardian of the property of the settlor may exercise a settlor’s powers with respect to revocation, amendment, or distribution of trust property only as provided in s. 744.441.
(7) A trustee who does not know that a trust has been revoked or amended is not liable for distributions made and other actions taken on the assumption that the trust had not been amended or revoked.
History of Fla. Stat. § 736.0602
Fla. Stat. § 736.0602 became law in 2007 as part of the broader Florida Trust Code. Fla. Stat. § 736.0602(5) originally referenced Fla. Stat. § 709.08. However, in 2011, Fla. Stat. § 709.2202 replaced Fla. Stat. § 709.08 as the primary statute section governing power of attorney instruments. Fla. Stat. § 736.0602(5) was updated accordingly at that time. Otherwise, Fla. Stat. § 736.0602 has remained unchanged since its initial enactment.
Fla. Stat. § 736.0602 was based on § 602 of the Uniform Trust Code, with a few revisions made to reference other portions of the Florida Statutes.
This article is part of the PTM Legal Commentary to the Florida Trust Code. Click here to navigate through the entire commentary.