Revocable vs Irrevocable Trust in Florida: Florida Trust Code, Homestead, No State Estate Tax (2026)

The Florida Trust Code: Chapter 736

Florida adopted a modified version of the Uniform Trust Code as Chapter 736 of the Florida Statutes, effective 1 July 2007. The Florida Trust Code covers the creation, modification, and termination of trusts (FL Stat. §§736.0401-736.0417), trustee duties (§§736.0801-736.0817), beneficiary rights (§§736.0813), creditor claims (§§736.0501-736.0508), and trust accounting and reporting requirements.

Florida's version of the UTC includes provisions that differ from the uniform act. Florida requires more detailed annual accountings to qualified beneficiaries (F.S. §736.0813(1)(c)) than the uniform act would mandate. Florida also has specific spendthrift trust provisions (F.S. §736.0502) that interact with the homestead and the state's creditor-protection statutes. The Florida Trust Code applies to all Florida trusts and to trusts of other states administered in Florida or with Florida-resident beneficiaries.

Florida Has No State Estate Tax or Income Tax

Florida has no state estate tax, no state inheritance tax, no state gift tax, and no state personal income tax. The Florida Constitution Article VII §5 prohibits a state income tax on natural persons. The pick-up estate tax (which formerly piggy-backed on the federal estate tax credit under F.S. §198.02) was rendered inoperative when EGTRRA eliminated the federal pick-up tax credit in 2005.

For Florida residents, only federal estate tax applies (40% above the $15,000,000 unified exemption per person for 2026 under OBBBA, $30,000,000 per married couple via portability). Florida is one of the most tax-friendly states for estate planning, which is one of the drivers of the state's significant retirement-age population and the proliferation of Florida-domiciled trusts.

Florida-resident trusts pay no Florida fiduciary income tax. A non-grantor trust governed by Florida law pays only federal income tax under the IRC §641 trust tax framework. This is a meaningful advantage over residents of high-tax states (California 13.3% top rate, New York 10.9% top rate) whose trust income is subject to state taxation. Florida residence and Florida trust situs are sometimes used by non-Florida residents to reduce state income tax on accumulated trust income, but the strategy must navigate residency and trust-situs rules of the grantor's home state.

The Florida Constitutional Homestead Exemption

Florida Constitution Article X §4 provides three distinct homestead protections: (a) protection from forced sale by creditors (with exceptions for mortgages, mechanics liens, and tax debts), (b) descent and devise restrictions that protect a surviving spouse and minor children from disinheritance of the homestead, and (c) the homestead property tax exemption. The creditor protection and devise restrictions apply to homestead property regardless of value; the property tax exemption is capped.

For a Florida resident who dies leaving a surviving spouse and a minor child, the homestead cannot be devised at all if there is a minor child (it passes by operation of law: a life estate to the surviving spouse with the remainder to descendants per stirpes, or under recent reforms, the surviving spouse can elect a 50% TIC interest with descendants taking the other 50%). For a Florida resident with a surviving spouse but no minor child, the homestead can be devised but only to the surviving spouse (with limited exceptions for elective share).

Holding homestead in a revocable trust is permissible under Florida law and does not destroy the creditor protection or property tax exemption, provided the trust grants the homestead owner an equivalent of a beneficial life estate or fee interest. Florida case law (Engelke v. Estate of Engelke, Snyder v. Davis, and others) has generally upheld the homestead character of trust-held homestead property. Drafting must be careful: the trust must vest the homestead owner with beneficial use during life, and the descent and devise restrictions must be honored in the trust terms (no devise of homestead to non-spouse if there is a surviving spouse, no devise at all if there is a minor child).

Florida Probate Costs: F.S. §733.6171

Florida probate is administered under Chapter 733 of the Florida Statutes. F.S. §733.6171 establishes a presumptively reasonable attorney fee schedule for ordinary probate services: 3% of the first $1 million, 2.5% of the next $4 million, 2% of the next $5 million, 1.5% of the next $10 million, and 1% above $20 million. The schedule is presumptive (rebuttable on application to the court) but is the de facto standard.

On a $1,000,000 gross estate, the presumptive attorney fee under §733.6171 is $30,000. Personal representative compensation under F.S. §733.617 follows a separate schedule and adds an additional $30,000 on the same estate. Total presumptive probate fees on a $1M Florida estate are therefore approximately $60,000 before filing fees, bond premiums, and any extraordinary services compensation. These fees apply to the gross probatable estate, not just the net distributable estate.

For an estate of $300,000 or more, the savings from avoiding probate via a revocable trust generally exceed the trust setup cost (typically $2,000 to $4,500 for a Florida revocable trust package). For very large estates, the savings can run to hundreds of thousands of dollars. This drives most Florida retirees to use revocable trusts as their primary estate planning vehicle.

Florida Asset Protection: Strong Creditor Protections

Florida is widely regarded as one of the strongest US asset-protection jurisdictions. The combination of (a) the unlimited homestead creditor protection under Article X §4, (b) unlimited annuity and life insurance cash-value creditor protection under F.S. §222.13 and §222.14, (c) wage exemption for heads of household under F.S. §222.11, and (d) tenancy by the entirety protection for jointly-titled marital property creates a strong framework for natural-person asset protection without needing a trust at all.

Florida is not a Domestic Asset Protection Trust (DAPT) state. Florida does not authorize self-settled spendthrift trusts to shield the grantor's assets from the grantor's own creditors. A Florida resident seeking DAPT protection must establish the trust in a DAPT state (see our DAPT page) and navigate the choice-of-law and fraudulent-transfer rules of Florida and the DAPT state.

Florida does recognize traditional spendthrift trusts that protect beneficiaries from the beneficiaries' own creditors under F.S. §736.0502. These are non-self-settled trusts (third-party-funded trusts for the benefit of others). A Florida parent funding a spendthrift trust for an adult child receives strong creditor protection for the child under Florida law. See our spendthrift trust page for the broader framework.

The Florida Community Property Trust Act

Florida is historically a common-law (separate property) state. F.S. §§736.1501-736.1512 (the Florida Community Property Trust Act, effective 1 July 2021) allow married couples to elect community property treatment for assets held in a Florida community property trust. The election is voluntary and prospective only.

The principal federal tax benefit of the community property trust election is the double step-up in basis under IRC §1014(b)(6). When the first spouse dies, both halves of the community property receive a step-up in basis to fair market value as of the date of death, eliminating any unrealized capital gain in the entire community property estate. In a common-law state, only the deceased spouse's half steps up; the survivor's half retains the original basis. For an appreciated asset, the double step-up can save substantial capital gains tax on a later sale by the surviving spouse.

The Florida community property trust is irrevocable as to the community property character (the spouses cannot unilaterally convert it back to separate property) but is revocable as to all other terms during the joint lifetimes. The IRS recognizes properly-structured Tennessee and Alaska community property trust statutes (which are similar to Florida's) for the §1014(b)(6) double step-up. The Florida statute is too recent for significant IRS guidance, but practitioners generally apply the same analysis.

Common Florida Trust Funding Steps

A Florida revocable trust is typically funded by: (1) executing a quitclaim or warranty deed transferring real property (including the homestead, with careful drafting to preserve homestead protections) to the trustee, (2) re-titling bank and brokerage accounts to the trust, (3) updating beneficiary designations on retirement accounts and life insurance (with the trust as primary or contingent beneficiary as planning requires), (4) executing a pour-over will for any assets not transferred to the trust during life, and (5) coordinating with a Florida durable power of attorney for incapacity management.

Florida-specific funding considerations include: (a) the deed transferring homestead to the trust should be recorded with the county clerk and the homestead exemption application should be confirmed not to lapse, (b) automobile titles can transfer to a Florida revocable trust but practical considerations (insurance, registration) often weigh against it, (c) Florida domestic partnerships and other non-traditional arrangements may need specific attention because Florida law does not recognize same-sex common-law marriage from other states without specific registration.

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