How “Settlor” is Defined - Commentary to Florida Trust Code

Legal Commentary on the Definition of “Settlor”

Fla. Stat. § 736.0103(21) defines the term “settlor.” The text of the subsection reads:

“Settlor” means a person, including a testator, who creates or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion.

Generally, the identity of a settlor is not in dispute. Most settlors identify themselves on the trust instrument itself. However, there are instances in which the identity of a settlor could be counterintuitive. The commentary to the Uniform Trust Code points to the following example:

For example, the person who executes the trust instrument may be acting as the agent for the person who will be funding the trust. In that case, the person funding the trust, and not the person signing the trust instrument, will be the settlor.

A more common settlor ambiguity is when two people are listed on the trust instrument as settlors but only one actually contributes any property to the trust. In this situation, only the contributing person is actually a trust settlor.

If multiple people contribute property to a trust, then they are all generally settlors “of the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion.” This is a reference to Fla. Stat. § 736.0602(2)(b), which states:

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.

Notably, Fla. Stat. § 736.0602(2)(b) is not a mandatory rule under Fla. Stat. § 736.0105. Thus, the terms of the trust may overrule Fla. Stat. § 736.0602(2)(b). Therefore, under the default rule, a person is only a settlor with regard to any trust property attributable to that settlor’s contribution. However, if the terms of the trust allow any settlor to revoke or amend the entire trust, then all settlors are settlors over the entire trust, not just over the portion that individual contributed.

History of the Definition of “Settlor”

The term “settlor” has been consistently defined since the Florida Trust Code took effect in 2007. However, the placement of the definition within § 736.0103 has changed multiple times. For example, the term was originally in Fla. Stat. § 736.0103(16).

The definition was taken from § 103(15) of the Uniform Trust Code.

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