Florida Statute 736.0414
“Modification or termination of uneconomic trust”
What it means
Some trusts hold so little that the cost of running them eats the beneficiaries' money. §736.0414 gives two ways out. First, after notice to the qualified beneficiaries, a trustee may terminate a trust worth less than $50,000 without going to court, if the amount no longer justifies the cost of administration.
Second, on the application of a trustee or a qualified beneficiary, a court may modify or terminate a trust, or remove the trustee and appoint a different one, when the value is insufficient to justify the cost of administration — with no dollar cap on the court's version. On termination, the property is distributed as the trust's purposes suggest.
- A trustee may terminate a trust under $50,000 without court approval, after notice to the qualified beneficiaries, if it is too small to justify administration costs.
- A court may modify or terminate a trust — any size — when its value is insufficient to justify the cost of administration.
- The court may also remove the trustee and appoint a different one as an alternative to termination.
- A spendthrift clause does not prevent it, unless the trust expressly prohibits termination under this section.
- Does not apply to an easement held for conservation or preservation.
How it plays out
The honest name for this is small-trust cleanup. A trust set up decades ago, whittled down by distributions, now holds a few thousand dollars and still owes annual accountings, tax filings, and a trustee's fee — administration that can cost more than a year's income. §736.0414 lets the trustee wind it up and hand the money to the beneficiaries instead of to the paperwork, on notice and without a court, under the $50,000 line. Above that, or where someone objects, a court can do the same. We use it to close out the trusts that have quietly outlived their point.
Where this shows up
Pages on this site where § 736.0414 does real work:
Related sections
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