Flexibility of the Florida Uniform Principal and Income Act

Most of the time, people find that the Florida Statutes serve to act as a constraint or limitation on their plans. However, the Florida Uniform Principal and Income Act (UPIA) does just the opposite. The UPIA is a set of statutes that governs how trustees and personal representatives allocate receipts of principal and income for the benefit of the beneficiaries of trusts and estates. When an allocation issue arises, the UPIA governs in the absence of specific instructions found in the trust document itself. Section 738.103 of the Florida Statutes outlines the governing order:

1. First, the trustee or personal representative shall administer the trust or estate in accordance with the terms of the trust or the will, even if there is a provision in the trust document or will that reaches a completely different result than the provisions found in the UPIA itself;

2. Second, the trustee or personal representative may administer the trust or estate by the exercise of a discretionary power of administration granted by the terms of the trust or the will, even if the exercise of this power produces a result different from what would be required or permitted by following the UPIA alone;

3. Third, the trustee or personal representative shall administer the trust or estate in accordance with the UPIA, only if the terms of the trust or the will do not contain a different provision or do not grant a discretionary power of administration.

Under Florida law, the person establishing a trust or a will has the power to write the provisions that will govern their trust or estate and the fiduciary who is responsible for administration is duty-bound to follow these provisions. Oftentimes, we find that people are genuinely surprised by the amount of power they have over how their trust or estate will be administered. This is especially true in regards to trusts, as I have found that most individuals tend to think broadly of trusts in terms of barriers and restrictions, not freedom and discretion. In fact, well-drafted trusts remain an established method for preserving the family business, protecting the family assets, or establishing a family legacy long after the initial grantor has passed, due in large part to the flexibility they allow.

An experienced Florida attorney can assist you in crafting the exact trust or will you need to fulfill your wishes and achieve your goals. If you are interesting in establishing a trust or estate plan please contact us today.