Fla. Stat. § 736.1503 - Commentary to Florida Trust Code

Legal Commentary on Fla. Stat. § 736.1503

Fla. Stat. § 736.1503 lists the four main requirements of a community property trust. However, these are not the sole requirements of a community property trust because such a trust must also conform with Fla. Stat. § 736.0402, Fla. Stat. § 736.0403, and Fla. Stat. § 736.1502(2).

To meet the first requirement under Fla. Stat. § 736.1503(1), the trust instrument must simply assert somewhere in its text that the trust is a community property trust. To be safe, one might also explicitly state that the trust is a community property trust “within the meaning of the Community Property Trust Act in Florida.”

The second requirement is to have a qualified trustee, as defined in Fla. Stat. § 736.1502(6).

The third requirement is that the trust must be signed by both settlor spouses “consistent with the formalities required for the execution of a trust under this chapter.” This means Fla. Stat. § 736.0503(2)(b) will need to be followed, requiring that the trust be executed in accordance with will formalities. Put differently, the trust will be need to be signed at the end of the trust instrument by both settlors in the presence of two witnesses, who also sign in the presence of the settlors and in the presence of each other. Fla. Stat. § 732.502.

Finally, the the trust instrument need to contain certain language in capital letters at the beginning of the trust instrument. This language warns the settlors of the potential downsides of a community property trust, including a recommendation that each spouse obtain separate counsel before signing.

Text of Fla. Stat. § 736.1503

Requirements for community property trust.—An arrangement is a community property trust if one or both settlor spouses transfer property to a trust that:

(1) Expressly declares that the trust is a community property trust within the meaning of this part.

(2) Has at least one trustee who is a qualified trustee, provided that both spouses or either spouse also may be a trustee.

(3) Is signed by both settlor spouses consistent with the formalities required for the execution of a trust under this chapter.

(4) Contains substantially the following language in capital letters at the beginning of the community property trust agreement:

THE CONSEQUENCES OF THIS COMMUNITY PROPERTY TRUST MAY BE VERY EXTENSIVE, INCLUDING, BUT NOT LIMITED TO, YOUR RIGHTS WITH RESPECT TO CREDITORS AND OTHER THIRD PARTIES, AND YOUR RIGHTS WITH YOUR SPOUSE DURING THE COURSE OF YOUR MARRIAGE, AT THE TIME OF A DIVORCE, AND UPON THE DEATH OF YOU OR YOUR SPOUSE. ACCORDINGLY, THIS TRUST AGREEMENT SHOULD BE SIGNED ONLY AFTER CAREFUL CONSIDERATION. IF YOU HAVE ANY QUESTIONS ABOUT THIS TRUST AGREEMENT, YOU SHOULD SEEK COMPETENT AND INDEPENDENT LEGAL ADVICE. ALTHOUGH NOT A REQUIREMENT, IT IS STRONGLY ADVISABLE THAT EACH SPOUSE OBTAIN THEIR OWN SEPARATE LEGAL COUNSEL PRIOR TO THE EXECUTION OF THIS TRUST.

History of Fla. Stat. § 736.1503

Fla. Stat. § 736.1503 became law on July 1, 2021 as part of the Community Property Trust Act. It has not been amended or revised since that date.

Fla. Stat. § 736.1503 appears to be heavily influenced by Tenn. Code Ann. § 35-17-103. Indeed, at the time Florida’s Community Property Act was enacted, Tenn. Code Ann. § 35-17-103 listed four requirements for a community property trust, each of which is similar to Florida’s four requirements. Florida’s requirement have been partially lifted from Tennessee’s code. For example, every single word in Tennessee’s fourth requirement can be found in Florida’s version of that requirement, except for the word “both.”

This article is part of the PTM Legal Commentary to the Florida Trust Code. Click here to navigate through the entire commentary.