It has long been established Florida law that a “spendthift provision” in a trust does not protect the trust beneficiary’s interest from claims for alimony or child support. This exception to trust protection was announced by the Florida Supreme Court in a 1985 decision. The principle was expressly included in Florida most recent trust code revision in 2006.
The 2006 trust code created some confusion as to trust protection from alimony and support obligations. The trust code provided two ways that a trust may protect its beneficiaries from creditors. The first protection tool is the spendthrift clause which state that a beneficiary’s interest may not be alienated voluntarily or involuntarily (by a creditor). Spendthrift protection is found in Section 736.0502 of the code. The other protection tool is a “discretionary distribution” clause which give the trustee discretion on amount and timing of all distributions to beneficiaries. This is found in Section 736.0504 of the code.
The spendthrift protection in the Florida code contains an exception for alimony and support claims; the discretionary protection provision in the Florida code includes no such exception.
In a recent Florida appellate case a court a husband argued that his beneficial interest in a discretionary trust was protected from claims by his ex-wife for alimony and support because the new trust code included no express exception for alimony and support creditors.
The court held that the discretionary trust are not immune from claims for alimony and support. The court said that although the ex-spouse could not compel the trustee of the husband’s trust to make distributions to either the ex-spouse or to the husband, the ex-wife could impose a continuing writ of garnishment on any distributions the trustee did make to the husband/beneficiary. If the trustee did make a distribution, the distribution would first be applied through the garnishment to satisfy the marital and support obligation.