Based on Florida’s statutory scheme, it would seem that a Florida court, given the same underlying facts, would reach the same result as the Massachusetts court in Marsman. If a life beneficiary-on the verge of being destitute-requested a distribution from a trust with a clause that directed the trustee to make distributions that the trustee, in his or her discretion, deems necessary for the life beneficiary’s support, taking into account the life beneficiary’s income from all sources known to the trustee, a trustee under Florida law would presumably be duty-bound to make a distribution. Because the trustee would be required to “administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries,” it would seem that a failure to distribute funds would be an abuse of the trustee’s discretion. Clearly the trustee would be required to look at the financial situation of the life beneficiary to ascertain whether a disbursement was needed in order to “support” the life beneficiary. Upon discovering that the life beneficiary was destitute, a failure to invade the corpus and disburse funds would likely violate § 736.0803, Fla. Stat. Many settlors incorporate language into the applicable “support clause” that states something to the effect of “even to the exhaustion of the trust,” in order to ensure that the trustee has the discretion to completely disburse the trust’s assets if needed to support the life beneficiary.
Based on the foregoing analysis, it would appear that in cases less clear than Marsman, a trustee, at a minimum, is required to evaluate the needs of a life beneficiary seeking a disbursement of funds from a support trust, as well as the other assets available to the life beneficiary. Once this evaluation is completed, however, it is still unclear as to exactly what standards a trustee should use in determining whether a distribution is required, permissible, or prohibited. Given that the standard of review is abuse of discretion, it would have to be a fairly egregious decision, regardless of whether it is a case of an improper distribution or improper denial, for the Court to find that the trustee abused his or her discretion. That being said, finding an abuse of discretion will be more apparent when a trustee (1) completely fails to evaluate the needs of the life beneficiary, (2) refuses to make a distribution where it is clearly needed for the “health, education, support, or maintenance” of the life beneficiary, or (3) where the distribution is clearly not needed for the “health, education, support, or maintenance” of the life beneficiary.
Given the complexity involved with creating an effective support trust, and ambiguity that exists within Florida’s statutory scheme, it is critical that a party that wants to help provide for a loved one for the rest of their life, but ultimately leave their estate to someone else, to consult with an attorney experienced in trust and estate planning. Further, it is important when planning such an estate plan that the party conveys exactly what his or her intent is to the drafting attorney, as properly memorializing this intent can mean the difference between a failed and an effective trust.
If you or someone you know would like to create or has questions about a support trust, please do not hesitate to contact the experienced estate planning attorneys at Chepenik Trushin LLP.