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The Florida Statutes

The 2009 Florida Statutes

Title XLII
Chapter 736
View Entire Chapter
Section 736.0505, Florida Statutes 2009

736.0505  Creditors' claims against settlor.--

(1)  Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:

(a)  The property of a revocable trust is subject to the claims of the settlor's creditors during the settlor's lifetime to the extent the property would not otherwise be exempt by law if owned directly by the settlor.

(b)  With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.

(c)  Notwithstanding the provisions of paragraph (b), the assets of an irrevocable trust may not be subject to the claims of an existing or subsequent creditor or assignee of the settlor, in whole or in part, solely because of the existence of a discretionary power granted to the trustee by the terms of the trust, or any other provision of law, to pay directly to the taxing authorities or to reimburse the settlor for any tax on trust income or principal which is payable by the settlor under the law imposing such tax.

(2)  For purposes of this section:

(a)  During the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power.

(b)  Upon the lapse, release, or waiver of the power, the holder is treated as the settlor of the trust only to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of the amount specified in:

1.  Section 2041(b)(2) or s. 2514(e); or

2.  Section 2503(b),

of the Internal Revenue Code of 1986, as amended.

History.--s. 5, ch. 2006-217.

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