Florida Statute 736.0505
“Creditors' claims against settlor”
What it means
The trust code's shields protect beneficiaries — never the person who funded the trust. A revocable trust leaves its property subject to the settlor's creditors during the settlor's lifetime, except property that would be exempt anyway if owned outright. For an irrevocable trust, a settlor's creditors reach the maximum amount that could be distributed to or for the settlor's benefit. Florida does not recognize self-settled asset-protection trusts.
The section adds carve-outs: a trustee's power to pay the settlor's income tax on trust earnings does not by itself expose the trust; lapsed withdrawal powers are excused up to the federal 5-and-5 and annual-exclusion amounts; and qualifying spousal trusts are treated, after the beneficiary spouse dies, as contributed by that spouse rather than by the settlor.
- Revocable trust: property is subject to the settlor's creditors during the settlor's lifetime, to the extent it would not be exempt if owned directly.
- Irrevocable self-settled trust: creditors reach the maximum amount distributable to or for the settlor's benefit.
- Multiple settlors: a creditor reaches only the debtor-settlor's share of the portion attributable to that settlor's contribution.
- A tax-reimbursement power — paying the settlor's income tax on trust income — does not by itself open the trust to the settlor's creditors.
- A power-of-withdrawal holder is treated as a settlor while the power lasts; lapses are excused up to the §2041(b)(2)/§2514(e) and §2503(b) amounts.
- Qualifying spousal trusts (inter vivos QTIP and similar, subject to §726.105) are deemed contributed by the settlor's spouse after that spouse's death.
How it plays out
We spend a lot of time un-teaching one idea: that a revocable living trust protects assets. It does not — §736.0505 hands the settlor's creditors everything in it, and at death §733.707(3) makes the same trust the backstop for the estate's unpaid claims. What a revocable trust buys is probate avoidance, privacy, and incapacity management. Real creditor planning means a trust someone else creates for you, or an irrevocable structure built before any claim exists — with §726.105 policing the timing.
Where this shows up
Pages on this site where § 736.0505 does real work: