Trust Decanting Requirements in Florida
At a glance
| Governing law and available decanting route | Fla. Stat. § 736.04117, current through 2025 ch. 159; calls power “invade principal.” Authorized trustee may modify first-trust terms or appoint all/ part of principal to trustee of ≥1 second trusts. Comprehensive single- section route includes absolute, limited, and supplemental-needs branches; common-law/other statutory further-trust rights preserved (§ 736.04117(2)- (4), (11)) |
|---|---|
| First-trust scope, state connection, retroactivity, and opt-out | Applies to all trusts governed by Florida law or with principal place of administration in Florida; no creation-date/retroactivity cutoff stated. Each power branch applies unless trust instrument expressly provides otherwise. Spendthrift or general no-amendment/no-revocation clause does not bar exercise; other-law/common-law rights preserved (§ 736.04117(2)-(4), (9), (11)-(12)) |
| Authorized fiduciary and required distribution power | Authorized trustee is current trustee other than settlor or beneficiary with power to invade principal. Absolute branch needs current principal- distribution power not limited to ascertainable/specific purpose; limited branch covers any other invasion power; disability branch needs invasion power for current benefit of beneficiary trustee believes may qualify for government disability benefits (§ 736.04117(1)(a)-(c), (2)-(4)) |
| Expanded, limited, mandatory, and ascertainable-standard branches | Absolute includes best-interests, welfare, comfort, or happiness and excludes health/education/maintenance/support or other ascertainable-purpose limit. Nonabsolute branch requires aggregate second-trust interests and distribution power substantially similar to first, same appointment power/class, and no absolute power in second trust; disability branch permits supplemental-needs trust if it furthers first-trust purposes (§ 736.04117(1)(a),(i), (2)-(4)) |
| Beneficiary, vested-interest, and power-of-appointment changes | Absolute: second-trust beneficiaries only first-trust beneficiaries, with no vested-interest reduction; may retain/omit non-present-general appointment power, create/modify powers for named current/future beneficiaries, and alter appointee class. Limited: aggregate interests substantially similar and same first-trust appointment powers/classes; later class members preserved. Disability branch protects disabled beneficiary and substantially similar interests for others (§ 736.04117(2)-(4)) |
| Second-trust terms, duration, governing law, and administration | One/multiple second trusts under same or different instrument, including one created for exercise; may modify first trust. Absolute branch may extend term; all branches may use second trust created/administered under any jurisdiction but remain subject to first trust's perpetuities starting time/ law. Limited aggregate terms/powers remain substantially similar; full or partial principal appointment allowed (§ 736.04117(2)-(4), (7)(b)-(c)) |
| Tax, charitable, special-needs, compensation, and other guardrails | Preserve claimed/claimable federal exclusions, marital/charitable deductions, direct-skip and other tax benefits; S-corporation stock must retain permitted- shareholder/QSST eligibility; grantor status may differ only within stated limit; retirement interest cannot shorten maximum distribution period. Supplemental-needs branch for disability. Cannot increase exercising trustee's compensation or enlarge exculpation/indemnification, though powers may be reallocated within law (§ 736.04117(4)-(7)) |
| Notice, recipients, consent, waiver, objection, and representation | ≥60 days' written notice to all first-trust qualified beneficiaries; settlor if grantor-status exception applies; all first-trust trustees; and anyone with removal/replacement power. Provide proposed exercise instrument and both trust instruments. All recipients may waive period by signed writing delivered to trustee, making power immediately exercisable. Statute states no beneficiary consent or ordinary court-approval prerequisite; notice does not cut off objection or start limitations as trust disclosure (§ 736.04117(8)) |
| Exercise instrument, court review, effectiveness, and remedies | Exercise by written instrument signed/acknowledged by authorized trustee and filed with first-trust records; no second-trust-record filing stated. Section states no mandatory petition, special fiduciary, statutory effective- date formula beyond notice, or defect cure. Notice is not trust disclosure; limitations do not start unless post-effect disclosure given. No duty to exercise and no impropriety inference from nonexercise; common-law rights preserved. General Trust Code court jurisdiction/remedies remain separate (§ 736.04117(6), (8)(d), (10)-(11)) |
Requirements one by one
The trustee and state connection come first
Current § 736.04117 applies when Florida law governs the trust or its principal place of administration is in Florida. The authorized trustee cannot be the settlor or a beneficiary and must hold power to invade principal.
Each branch yields to an express contrary trust term. A spendthrift or general no-amendment/no-revocation clause is not enough to prohibit the exercise, and the section preserves authority arising under the instrument, other law, or common law.
Absolute power permits the broadest changes
Absolute power is not limited to a specific or ascertainable purpose; best interests, welfare, comfort, or happiness qualify. The trustee may modify the first trust or appoint principal to one or more second trusts whose beneficiaries come only from the first trust and whose terms do not reduce a vested interest.
The second trust may retain or omit appointment powers other than a presently exercisable general power, create or modify powers for qualifying first-trust beneficiaries, change the permissible appointee class, and extend the trust term. Fla. Stat. § 736.04117(2).
Limited power preserves substantially similar interests
When the power is not absolute, the second trusts in the aggregate must provide each first-trust beneficiary substantially similar interests. They preserve an existing appointment power and its permissible class and ordinarily may not add one. The current statute contains a further-purpose exception allowing an absolute distribution power when the first trust's standard-limited power and the trustee's determination satisfy subsection (3)(d).
The separate disability branch permits a supplemental-needs trust for a beneficiary the trustee believes may qualify for government disability benefits, while preserving substantially similar interests for other beneficiaries.
The exercise instrument follows notice
The trustee gives at least 60 days' written notice to qualified beneficiaries, the settlor when the grantor-status paragraph applies, all first-trust trustees, and anyone who may remove or replace the authorized trustee. Copies of the proposed exercise, first trust, and proposed second trust satisfy the notice content rule.
If every recipient waives the period in a signed writing delivered to the trustee, the power becomes immediately exercisable. Otherwise the exercise uses a written instrument signed and acknowledged by the authorized trustee and filed with the first trust's records. Fla. Stat. § 736.04117(6), (8).
Tax and fiduciary limits remain statutory conditions
The section protects originally claimed or claimable federal tax benefits, S-corporation shareholder status, stated grantor-owner limits, and retirement minimum-distribution periods. These are constraints, not a promise of tax treatment.
The exercise also cannot increase the authorized trustee's compensation beyond the first instrument or enlarge exculpation or indemnification, though fiduciary powers may be divided and reallocated as other law permits. A second trust may be created or administered under any jurisdiction, subject to the first trust's perpetuities starting time and governing law.
What trips people up
Notice is not a trust disclosure document and does not itself start the limitations period. A qualifying disclosure must be given after the exercise's effective date. The notice also does not eliminate a beneficiary's objection rights. Fla. Stat. § 736.04117(8)(d).
The statute creates no duty to exercise the power, and failure to decant does not support an inference of impropriety. Fla. Stat. § 736.04117(10).
Common questions
Must the trustee file a court petition?
Section 736.04117 does not make a petition a condition of the statutory exercise. A trustee may separately seek judicial instructions or confirmation under the Trust Code when appropriate.
Can the second trust last longer?
Under the absolute-power branch, yes. The exercise still remains subject to the first trust's perpetuities starting time and governing law.
Can one notice recipient waive for everyone?
No. Immediate exercise under subsection (8)(c) requires all persons who must be notified to waive the period by signed written instrument delivered to the authorized trustee.
Statutes and sources
- Fla. Stat. § 736.04117 — complete invasion/decanting scheme, including authority, absolute/limited/supplemental-needs branches, tax and fiduciary limits, acknowledged instrument, notice, waiver, state connection, and no-duty rule; official current text (accessed September 12, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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