Florida Trusts

Answer 1

A private express trust is created when: (i) a settlor, (ii) who has capacity to create a trust, (iii) clearly expresses a present intent to transfer ownership of, (iv) property to, (v) a trustee who has duties to perform, (vi) for the benefit of one or more definite or ascertainable beneficiaries, (vii) for a valid purpose.

Question 2

Spendthrift Clause

Answer 2

A spendthrift clause expressly restricts the beneficiary’s power to transfer his/her trust interest. If a spendthrift clause exists, most of the beneficiary’s creditors are prevented from attaching the interest or demanding a distribution from the trustee. But a spendthrift clause does not preclude claims by certain “exception creditors,” including:

• support claims by a spouse, an ex-spouse, or a child of a beneficiary
• claims by a judgment creditor who has provided services for the protection of a beneficiary’s trust or
• claims of the federal government or the State of Florida.

A court may order attachment of present and future distributions only as a last resort if the creditor establishes that traditional methods of enforcing the claim are insufficient (i.e., beneficiary has no other assets). Consequently, if the beneficiary has other assets, the claimant must first seek to satisfy the claim from those assets.