Can Creditors Reach a Revocable Trust after the Settlor Dies in Florida?

The rule reaches any portion of a trust over which the settlor held a right of revocation at death, alone or together with another person. A right of revocation is a retained power to amend or revoke the trust and revest the principal in the settlor, or to withdraw or appoint principal to or for the settlor's own benefit.

The trust is reached only when the estate falls short. If, after statutory entitlements and all devises other than residuary devises are provided for, the estate cannot pay its expenses and obligations, the personal representative is entitled to payment from the trustee in the amount certified in writing.

Limits apply. Payments come from trust property included in the settlor's gross estate for federal estate tax purposes. Trusts that are part of certain retirement plans and individual retirement accounts are not treated as revocable trusts for this rule, and certain death benefits are excluded unless the trust instrument expressly says otherwise. The trustee also pays trust administration expenses, including trustee and attorney compensation, before the estate's expenses and obligations.

Unless the settlor directed otherwise, payments come first from the trust residue, then from general gifts, and last from gifts of specific property. During the settlor's lifetime, revocable trust property is subject to the settlor's creditors to the extent it would not be exempt if owned directly. Probate filing deadlines for creditors are covered in Florida estate creditor claim deadlines.