Trusts and Florida Divorce — How Beneficial Interests Are Actually Treated

By Nadia Pazos, Family Law Attorney, Pazos Law Group · May 2026  ·  ← All blog posts

Trusts are everywhere in HNW Florida divorce. Family trusts, dynasty trusts, asset-protection trusts, marital trusts, spendthrift trusts, and foreign trusts each carry their own divorce implications. The headline question is always the same: is the trust’s value reachable in equitable distribution, and what about distributions received during the marriage?

Types of Trusts in Florida Divorce

Revocable Trusts (Living Trusts)

A revocable trust is essentially a probate-avoidance vehicle. The settlor retains the right to revoke, amend, or distribute trust assets. For divorce purposes, Florida courts generally treat assets in the settlor’s own revocable trust as directly owned by the settlor — the trust does not provide divorce protection.

If the divorcing spouse is the settlor and the assets in the trust are marital (acquired during the marriage), they are subject to equitable distribution like any other marital property.

Irrevocable Trusts

Once an asset is transferred to an irrevocable trust, the settlor has parted with ownership. The asset belongs to the trust, managed by the trustee for the beneficiaries. For divorce:

• If the divorcing spouse created the irrevocable trust during the marriage with marital funds, the transfer itself may be analyzed for dissipation or fraudulent conveyance.
• If the divorcing spouse is a beneficiary of an irrevocable trust created by someone else (typically a parent or grandparent), the beneficial interest is generally non-marital. But distributions received during the marriage may be marital.

Discretionary vs. Mandatory Distribution Trusts

This distinction is critical:

• Discretionary trust: The trustee decides whether and when to distribute. The beneficiary has no enforceable right to specific distributions. Florida courts generally cannot order the trustee to make distributions, but the beneficial interest still has value.
• Mandatory trust: The trustee must distribute according to a fixed formula or schedule. The beneficiary has an enforceable right, and the value is more easily quantifiable.

Spendthrift Provisions

A spendthrift clause prevents the beneficiary from assigning or transferring their interest and prevents creditors from reaching it. Florida law gives spendthrift trusts significant protection. However, spendthrift clauses do not protect against:

• Distributions actually received (which can be reached if commingled or used for marital purposes)
• Child support enforcement, in some circumstances

Foreign Trusts

Trusts established offshore (Bahamas, Cayman, Cook Islands, Liechtenstein) add complexity. The trust itself is governed by foreign law; the beneficiary’s rights are analyzed under that jurisdiction’s law. Florida courts can order distribution of the beneficiary’s interest if they have personal jurisdiction, but enforcement abroad depends on local law.

Marital vs. Non-Marital: The Core Analysis

For each trust position, two questions:

Question 1: Is the beneficial interest itself marital?

If the divorcing spouse received the beneficial interest from a third party (parent, grandparent) as a gift or bequest, the interest is generally non-marital under Fla. Stat. § 61.075(6)(b).

If the divorcing spouse created the trust during the marriage with marital funds, the trust property may still be marital, depending on the structure and purpose.

Question 2: What about distributions received during the marriage?

Even if the beneficial interest is non-marital, distributions received and used during the marriage may become marital. The analysis depends on:

• Whether the distributions were deposited into a joint account (commingling)
• Whether the distributions funded marital purposes (joint home, joint vacation property, shared expenses)
• Whether the distributions remained separate and traceable

Tracing Trust Distributions

Tracing is the technical work of following trust distributions through accounts and transactions to determine what is marital vs. non-marital. Common tracing problems:

• Multiple distributions over years, mixed with earned income
• Distributions used to fund joint real estate purchases
• Distributions invested into joint brokerage accounts
• Distributions used for family expenses (vacations, education, lifestyle)

Forensic accountants are typically retained to perform tracing. Without contemporaneous records and clear separation, tracing becomes much harder and the non-marital classification can be lost.

Trust Protection Strategies in Florida

• Pre-marital trust planning. Wealth transferred into an irrevocable trust before marriage is generally protected from equitable distribution. A properly drafted prenup adds further protection.
• Discretionary structure. Discretionary trusts provide stronger divorce protection than mandatory trusts because the beneficiary has no enforceable right to specific distributions.
• Third-party trustees. Independent (non-family) trustees insulate the trust from claims that the beneficiary effectively controls the trust.
• Spendthrift clauses. Standard practice in modern Florida trust drafting.
• Avoid commingling. If distributions are received, segregate them from marital accounts.

Frequently Asked Questions

Can my spouse get my trust in a Florida divorce?

Generally no — the trust itself is not divided. What may be at issue is the beneficial interest, which is non-marital if the trust was created by a third party (parent, grandparent) for your benefit. Distributions received during the marriage may be marital if they were commingled or used for marital purposes.

What's the difference between a discretionary and mandatory trust for divorce purposes?

A discretionary trust gives the trustee complete discretion over distributions, and the beneficiary has no enforceable right to specific distributions. A mandatory trust requires the trustee to distribute according to a fixed formula. Discretionary trusts provide stronger divorce protection.

Are distributions I received from a family trust during my marriage marital property?

It depends. If you kept the distributions separate and traceable, they remain non-marital. If you deposited them into joint accounts or used them for marital purposes (joint home, family expenses, joint investments), they may have become marital through commingling.

My spouse moved assets into an irrevocable trust during our marriage. Can I challenge that?

Yes. Transfers of marital assets into an irrevocable trust during the marriage may be analyzed for dissipation or fraudulent conveyance, particularly if the transfer was made within 2 years of filing. Florida courts can credit dissipated amounts back to the innocent spouse's side of equitable distribution.

Are offshore trusts protected from Florida divorce?

Less than you might think. Florida courts can order distribution of a Florida resident's beneficial interest if they have personal jurisdiction over the spouse. Actual enforcement abroad depends on the trust jurisdiction's law. Modern asset-protection trusts have become more difficult to defend against well-prepared divorce claims.

Related Reading

• High-Net-Worth Divorce in Florida
• Florida Equitable Distribution Explained
• Hidden Assets in a Florida Divorce
• International Divorce in Florida
• Manalapan & Gulf Stream Divorce Attorney
• Palm Beach Divorce Attorney

The information on this page is for general informational purposes only and does not constitute legal advice. Florida family law is fact-specific. Reading this article does not create an attorney-client relationship with Pazos Law Group.