Spendthrift Trusts in Florida

A spendthrift trust in Florida is an irrevocable trust containing a clause that prevents a beneficiary’s creditors from reaching the trust assets before the trustee distributes them. Florida Statutes § 736.0502 recognizes spendthrift provisions as enforceable creditor protection, blocking both voluntary and involuntary transfers of the beneficiary’s interest.

Spendthrift protection works alongside a second, separate mechanism: discretionary distribution authority under § 736.0504. A trust that combines both provisions creates the strongest creditor protection available under Florida trust law. The distinction between the two determines how much protection a beneficiary actually receives.

How Does a Spendthrift Provision Work in Florida?

A spendthrift provision prohibits the beneficiary from voluntarily assigning, pledging, or transferring their trust interest to anyone. Because the beneficiary cannot voluntarily transfer the interest, creditors cannot involuntarily attach it either. A creditor’s rights against a trust interest cannot exceed the beneficiary’s own rights.

Florida law requires the provision to restrain both voluntary and involuntary transfers. A clause that restricts only one type does not qualify as a valid spendthrift provision under § 736.0502. Both restrictions must appear in the trust document, though the provision does not need to use the word “spendthrift.” The dual restriction must be clear from the trust language.

Standard spendthrift language states that no beneficiary may voluntarily or involuntarily assign, alienate, pledge, encumber, or otherwise transfer their interest, and that no creditor or third party may attach, levy upon, or otherwise reach the beneficiary’s interest. Variations in phrasing are acceptable as long as both restrictions are present.

A spendthrift provision protects only the beneficiary’s interest while assets remain inside the trust. Once the trustee distributes money or property to the beneficiary, the distributed assets become the beneficiary’s personal property. A creditor can garnish a beneficiary’s bank account after a trust distribution has been deposited, even though the funds originated from a protected trust.

Which Creditors Can Override a Spendthrift Clause in Florida?

Florida law identifies three categories of creditors whose claims survive a spendthrift provision. A beneficiary’s child, spouse, or former spouse with a support or maintenance judgment can obtain a court order attaching present or future distributions. A judgment creditor who provided services protecting the beneficiary’s trust interest (typically an attorney in trust litigation) can reach distributions. Federal and state tax liens override spendthrift provisions to the extent provided by statute. These exception creditors are defined in § 736.0503(2).

Exception creditor relief is a last resort. Section 736.0503(3) requires the claimant to make an initial showing that traditional collection methods are insufficient before a court will order attachment of trust distributions. The legislature designed this threshold to keep spendthrift protection as the rule and creditor override as the exception.

The third category, covering claims by the state of Florida or the United States, remains unsettled. No Florida court has defined its full scope. Federal tax liens fall within it, but whether other government claims qualify is an open question.

What Is the Difference Between a Spendthrift Trust and a Discretionary Trust?

A spendthrift clause and discretionary distribution authority are separate protections that address different creditor strategies. A spendthrift clause prevents creditors from attaching the beneficiary’s interest in the trust. Discretionary distribution authority under § 736.0504(2) prevents creditors from compelling the trustee to make distributions. The two protections work independently, and a trust can have one without the other.

A trust with a spendthrift clause but mandatory distributions is vulnerable to exception creditors. If the trust requires the trustee to distribute all income quarterly, the beneficiary has an enforceable right to that income. Exception creditors under § 736.0503 can obtain a court order attaching those mandatory payments despite the spendthrift clause.

A trust that combines a spendthrift clause with fully discretionary distribution authority removes both avenues. The creditor cannot attach the beneficiary’s interest and cannot compel the trustee to distribute. Section 736.0504(2) bars creditors from compelling distributions or reaching a beneficiary’s discretionary interest, and the statute specifies that this protection extends to exception creditors listed in § 736.0503(2).

Protection Type	Statutory Basis	What It Prevents	Limitation
Spendthrift	§ 736.0502	Creditor attachment of beneficiary’s trust interest	Exception creditors can reach mandatory distributions
Discretionary	§ 736.0504(2)	Creditor compelling trustee to distribute	Trustee must genuinely exercise discretion
Combined	Both statutes	Both attachment and compelled distributions	Strongest protection available under Florida trust law

The Berlinger v. Casselberry Problem

The statutory text suggests discretionary trusts are immune from exception creditors, but Florida case law complicates the picture. In Berlinger v. Casselberry, 133 So. 3d 961 (Fla. 2d DCA 2013), the Second District Court of Appeal held that a former spouse with an alimony judgment could garnish present and future distributions from a discretionary trust. The court ruled that when a valid exception makes the spendthrift provision unenforceable, discretionary distributions become subject to garnishment regardless of § 736.0504(2)’s protective language.

The holding in Berlinger creates tension with the statute’s plain text. Section 736.0504(2) says its protections apply whether or not the trust contains a spendthrift provision, and explicitly covers exception creditors under § 736.0503(2). The 2007 legislative staff analysis of amendments to §§ 736.0501–736.0504 confirms that the legislature intended discretionary trust protections to outrank exception creditor rights. The Second DCA appeared to reach the opposite conclusion, at least for support-based exceptions.

Whether Berlinger applies beyond alimony remains unclear. The decision may reflect a public policy favoring support obligations over trust protection rather than a broad rule eroding discretionary trust immunity. Until the Florida Supreme Court resolves the conflict, a discretionary spendthrift trust provides the strongest available protection, though a beneficiary with an outstanding support judgment faces uncertainty about whether the trustee’s discretionary authority will hold.

The Florida Supreme Court’s foundational case on this tension is Bacardi v. White, 463 So. 2d 218 (Fla. 1985), which held that a former spouse with a support judgment could reach a beneficiary’s interest in a spendthrift trust. The Florida Trust Code created separate statutory treatment for spendthrift trusts (§ 736.0502–0503) and discretionary trusts (§ 736.0504) partly to address Bacardi by establishing distinct rules for each trust type. The Berlinger decision raises the question of whether those distinct rules achieved their purpose.

Can a Settlor Create a Spendthrift Trust for Themselves?

Florida law does not allow a person to shield their own assets through a self-settled spendthrift trust. Under § 736.0505(1)(b), a settlor’s creditors can reach the maximum amount distributable from a trust to the extent the settlor is a beneficiary. The spendthrift clause, the discretionary distribution language, and every other trust design feature are irrelevant when the same person created and benefits from the trust.

Spendthrift provisions protect beneficiaries of trusts created by someone else. A parent’s trust for children or a grandparent’s trust for grandchildren are the structures spendthrift clauses were designed for. A person who creates an irrevocable trust and names themselves as a beneficiary receives no creditor protection from the spendthrift provision against their own creditors.

A small number of states, including Nevada, South Dakota, Delaware, and roughly a dozen others, have enacted domestic asset protection trust statutes that override this rule. Florida has not. A Florida resident who creates a DAPT in another state faces the risk that Florida courts will apply Florida’s self-settled trust prohibition rather than the DAPT state’s protective statute.

Does a Spendthrift Clause Work in a Revocable Trust?

A revocable trust can include spendthrift language, but the provision provides no creditor protection during the settlor’s lifetime. Under § 736.0505(1)(a), a settlor’s creditors can reach all assets in a revocable trust because the settlor retains the power to revoke the trust and reclaim the assets at any time. Florida courts treat revocable trust assets as the settlor’s own property for creditor purposes.

The spendthrift clause in a revocable trust activates only after the settlor dies and the trust becomes irrevocable by its terms. At that point, the spendthrift provision protects the successor beneficiaries, typically children or grandchildren, from their own creditors in the same way it would in any third-party irrevocable trust.

When Does Spendthrift Protection End?

Spendthrift protection ends the moment assets leave the trust. Once the trustee distributes cash, securities, or other property to the beneficiary, creditors can garnish bank accounts, levy on investments, and execute against anything the beneficiary personally owns.

The practical consequence is that a spendthrift trust provides maximum protection when assets remain inside the trust for as long as possible. Dynasty trusts are built around this principle, holding assets across multiple generations rather than distributing them outright. Florida permits trust durations up to 1,000 years under § 689.225(2)(f). A properly structured dynasty trust can protect assets across successive generations, shielding each generation’s beneficiaries from their own creditors.

Trustees can also limit exposure by making small periodic discretionary distributions rather than large lump-sum payments. A trustee who purchases a residence or vehicle in the trust’s name keeps the asset protected by the spendthrift provision while still allowing the beneficiary to use it.

The strongest protective structure under Florida law combines spendthrift provisions, fully discretionary distribution authority, and an independent trustee who exercises genuine discretion over every distribution decision. Florida’s trust-based creditor protection statutes provide multiple layers that work together, but each layer requires careful drafting and proper administration to hold up under creditor challenge.