A Primer for Trust Termination

If life didn’t evolve and change so often we may be able to make better plans. However, it is only natural that life circumstances shift, and when they do, we have to make changes with them.

Such is true with Trusts. In Florida, all Trusts are revocable unless stated otherwise. Most Trusts will also include specific language on how the Trust should be dissolved. If such language exists, you must comply with the instructions stated in the Trust.

However even if verbiage exists stating that the Trust is irrevocable, there are a few specific circumstances that allow it to be terminated:

  • The purpose of the Trust has been satisfied
  • The Trust has illegal or impractical elements
  • The Trust assets have dipped below $50,000 in value
  • The Trust was created under fraud, duress, or undue influence
  • Both legal and equitable assets of the Trust have combined. For instance, if the sole asset in the Trust is a home of which one person is the sole beneficiary and trustee, and that person transfers the deed to the home to themself, then the Trust terminates.

Irrevocable Trusts will almost always require court intervention and the permission of the Trust beneficiaries.

If the Trust is not specified as irrevocable, and no language is included in the Trust on how to terminate it, you can typically follow these steps to have it dissolved:

  • Determine what, if any, property exists within the Trust. Any beneficiaries of the included property would have to state their wish to revoke it.
  • Draft a letter to the Trustee detailing your intentions to have the Trust revoked
  • Have the letter notarized. Florida law does not require a notary; however, it is an effective safeguard against any questioning down the line
  • Transfer the assets to the proper owner.

Florida law is one of few that allows Trusts to be dissolved outside of the courtroom. If your Trust was created after January 1, 2001, then the Trust may be terminated non-judiciously with the consent of any beneficiaries and the trustee.

Alternative Methods

Terminating a Trust doesn’t always have to be the only option. Trustees and beneficiaries may also consider:

  • Modifying the Trust
  • Decanting (taking assets out of one trust and placing them in another)
  • Having the Trustee removed

A Trust exists to serve its beneficiaries. When that no longer happens, it’s time to consider terminating the Trust. Florida trust and tax law can make termination a difficult, confusing, and overwhelming process. Sometimes it can even lead to litigating the matter in the courtroom. The attorneys at Luis E. Barreto & Associates have years of experience in estate litigation and probate. We’re here to assist you through any and all of your estate law questions and issues. Give us a call today for a free, confidential consultation at (305) 358-1771.

Written by Luis E. Barreto

Luis E. Barreto

Luis is a probate and guardianship litigator with over 23 years of experience in the field. Determination of heirs, will contests, breaches of fiduciary duty, removal of personal representatives, guardians and trustees are just some of the types of litigation he addresses. In addition, he administers non-contested estates and guardianships.