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Florida Statute 736.0504: Discretionary Trusts and What a Creditor Can Reach

A judgment creditor proved the beneficiary was running the trust himself and the trustee was rubber-stamping him. A Florida appellate court still would not let him touch a dollar of it.

Here is the whole section in plain English, the case that decides most Florida creditor fights over a trust, and the one claimant this protection does not stop.

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Quick Overview

Florida law says that if a trustee has discretion over distributions, a creditor of the beneficiary cannot compel a distribution and cannot attach the beneficiary’s interest before one is made. That protection holds even when the trustee has abused the discretion, and in the leading Florida case it held for a beneficiary who was running the trust in every practical sense against a judgment of more than one million dollars. There is one class of claimant the section does not stop, and which side of that line your situation falls on comes down to the sections below.

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Below we walk through what the statute says, the case Florida courts decide these fights with, where the protection stops, and what it means whether you are drafting or collecting. Jump to any section:

  1. What Section 736.0504 Says Four subsections. One of them protects a trustee who has abused the discretion, which reads like a typo until you see why the Legislature wrote it.
  2. The Case That Decides Most Creditor Fights A trial judge called the trustee a legal veneer and let the creditor execute. The appellate court reversed anyway, and the reason is the whole rule.
  3. Express Control Is the Line Not who really runs the trust. What the document lets the beneficiary demand. Cross that line and a creditor reaches exactly as far as the line goes.
  4. The Claimant This Section Does Not Stop One Florida court read this section and found the gap in it. Paying a beneficiary’s bills instead of paying him made no difference at all.
  5. When the Beneficiary Is Also the Trustee Subsection (3) quietly decides whether the family member you named as trustee just handed their own creditors a key to the trust.
  6. What This Means if You Are Drafting Every protective feature in this statute is a drafting choice somebody made years earlier. Four of them decide almost everything, and one is a single word.
  7. What This Means if You Are Collecting The statute closes the front door and leaves two others open. Neither one requires you to prove the trustee did anything wrong.

That’s the rule in one paragraph. What decides your situation is the language in the trust document itself, which is where the sections below get specific.

What Section 736.0504 Says

People arrive at this section from two opposite directions. One is a parent who wants to leave money to a son with a bankruptcy, a lawsuit, or a marriage that is coming apart, and who wants to know whether the inheritance can be taken away from him. The other is somebody holding a judgment against a person who seems to live very well on money that is never technically his.

The same four subsections answer both, and they answer more decisively than almost anything else in the Florida Trust Code.

Fla. Stat. §736.0504, in full

736.0504 Discretionary trusts; effect of standard.

  1. As used in this section, the term “discretionary distribution” means a distribution that is subject to the trustee’s discretion whether or not the discretion is expressed in the form of a standard of distribution and whether or not the trustee has abused the discretion.
  2. Whether or not a trust contains a spendthrift provision, if a trustee may make discretionary distributions to or for the benefit of a beneficiary, a creditor of the beneficiary, including a creditor as described in s. 736.0503(2), may not:
    1. Compel a distribution that is subject to the trustee’s discretion; or
    2. Attach or otherwise reach the interest, if any, which the beneficiary might have as a result of the trustee’s authority to make discretionary distributions to or for the benefit of the beneficiary.
  3. If the trustee’s discretion to make distributions for the trustee’s own benefit is limited by an ascertainable standard, a creditor may not reach or compel distribution of the beneficial interest except to the extent the interest would be subject to the creditor’s claim were the beneficiary not acting as trustee.
  4. This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution.

That is the entire section, quoted as it appears in the official Florida Statutes at Online Sunshine, §736.0504 (retrieved August 13, 2026). History: s. 5, ch. 2006-217; s. 14, ch. 2007-153.

Three phrases in there are doing almost all of the work, and each one is easy to read past.

“Whether or not a trust contains a spendthrift provision.” This protection does not depend on the spendthrift clause. A trust with genuine discretionary distributions carries it even if the drafter left the spendthrift language out, and a properly drafted Florida trust carries both. If you want the clause itself explained, that is our Florida spendthrift trust page.

“Whether or not the trustee has abused the discretion.” Read that twice, because it looks backwards. The Legislature is saying that a creditor cannot get anywhere by arguing that a fair trustee would have paid the beneficiary more than this one did. The abuse does not convert the interest into something reachable. It stays where it is, and subsection (4) keeps the remedy for it in the beneficiary’s own hands.

“Including a creditor as described in s. 736.0503(2).” That is a cross-reference to the three classes of claimant a spendthrift provision cannot be enforced against, which includes a child or a former spouse holding a support order. Subsection (2) says even those claimants cannot compel a distribution or attach the interest. It is also the exact phrase a Florida court has read narrowly, which is the subject of a later section on this page. The section sits inside the broader Florida Trust Code.

The Case That Decides Most Creditor Fights

In 2010 the Fourth District decided a case that is still the most important Florida authority on this section, and the facts are about as unhelpful to the beneficiary as facts get.

A mother created an irrevocable trust for one son and named her other son as sole trustee, with absolute discretion over distributions and a separate power to end the trust by handing over the whole principal. A judgment creditor then obtained a judgment against the beneficiary son for $1,019,095.82, could not collect, and went after the trust in proceedings supplementary.

The trial court held a trial and made findings that would make any planning lawyer wince. The trustee had turned over day to day management of the trust to the beneficiary. The beneficiary controlled all of the important decisions, including the investments. The trustee never independently checked any of them, and some turned out badly. In the trial judge’s words, reproduced by the appellate court, the trustee simply

“serve[d] as the legal veneer to disguise [James’s] exclusive dominion and control of the Trust assets.”

Miller v. Kresser, 34 So. 3d 172, 175 (Fla. 4th DCA 2010), quoting the trial court’s written final judgment. This is the trial court’s language, reproduced in the appellate opinion.

On those findings the trial court terminated the spendthrift provision, let the creditor reach the trust assets, and directed a writ of execution against the trust’s interest in a Florida Keys property.

The Fourth District reversed. Not because it disagreed about the facts. It called them perhaps the most egregious example of a trustee abdicating his responsibilities that it had seen. It reversed because the statute does not ask that question.

“the law requires that the focus must be on the terms of the trust and not the actions of the trustee or beneficiary.”

Miller v. Kresser, 34 So. 3d at 176.

Then the court applied section 736.0504 directly.

“When a trust document provides the trustee with complete discretion over distributions, a creditor may only reach those distributions the trustee chooses to make.”

“There is no law in Florida suggesting that a beneficiary’s creditors may reach trust assets in a discretionary trust simply because the trustee allows the beneficiary to exercise significant control over the trust.”

Miller v. Kresser, 34 So. 3d at 176.

And it drew the line that a Florida lawyer reaches for first in almost every one of these disputes.

“It is only when a beneficiary has received distributions from the trust, or has the express right to receive distributions from the trust, that the creditor may reach those distributions.”

Miller v. Kresser, 34 So. 3d at 176.

The court closed that part of the opinion by saying where the fix belongs if anyone wants one.

“It is the legislature’s function to carve out any exceptions to the protections afforded by discretionary and spendthrift trusts.”

Miller v. Kresser, 34 So. 3d at 176.

Sixteen years later the Legislature has not carved out a general one, and no Florida appellate decision we located has narrowed the rule.

Two honest cautions before you use this case as a mirror. It is a published decision in another family’s case, not a matter this firm handled, and it does not predict anything about yours. And it is a decision about a third party trust, meaning somebody else’s money, set aside for the beneficiary. A trust you funded for your own benefit is governed by a different section entirely, and it does not work like this.

Express Control Is the Line

If the focus is the terms of the trust, then the practical question becomes narrow and answerable. What does the document let the beneficiary demand?

The Fourth District worked through the older Florida cases and the federal bankruptcy decisions applying Florida law, and the pattern in them is consistent. Where the trust gives the beneficiary an express right to control the property, courts let the creditor reach it, and the reach is measured by the size of the right. If the beneficiary can terminate the trust or demand the entire principal, a creditor can reach the entire principal. If the beneficiary can demand only a portion, the creditor gets that portion. If the beneficiary can demand nothing, and has to ask, a creditor takes nothing until the trustee actually pays.

So the features that quietly decide the case are all in the document.

Notice what is not on that list, which is how the family actually behaves. A beneficiary who calls the trustee weekly, who is never refused, and who effectively decides everything is in a strong position under Florida law, so long as the document does not say he can. That is a strange result to explain at a kitchen table, and it is the law the Fourth District applied.

There is a warning inside it for trustees, though, and it is not a small one. Miller was decided in the creditor’s case. It says nothing about what the beneficiaries of that trust could have done to a trustee who abdicated like that, and subsection (4) expressly preserves a beneficiary’s right to sue a trustee for an abuse of discretion. A rubber-stamping trustee is protected from the creditor and exposed to the family. If that is the situation you are in, the relevant pages are the duty to inform and account and removing a trustee.

Wondering whether your trust actually has this protection?

It is answered from four or five specific paragraphs of the document, not from the cover page. Bring the trust and every amendment to a free 30-minute consult and we will read them with you.

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The Claimant This Section Does Not Stop

Read subsection (2) again and it looks airtight even against a former spouse, because it says a creditor may not compel or attach including a creditor as described in s. 736.0503(2), which is the support class. In 2013 the Second District read that same sentence and found the gap in it.

The case involved a thirty-year marriage, a $16,000 a month permanent alimony obligation, and a former husband who stopped paying while four family discretionary trusts paid for his mortgage, his property taxes, his insurance, his utilities, his lawn and pool care, his travel, and his current wife’s credit card bills. When garnishment loomed, the trustees stopped paying him directly and paid his creditors instead.

The Second District affirmed a continuing writ of garnishment against the discretionary distributions.

“The section does not expressly prohibit a former spouse from obtaining a writ of garnishment against discretionary disbursements made by a trustee exercising its discretion. As a result, it makes no difference that the instant trusts are discretionary.”

Berlinger v. Casselberry, 133 So. 3d 961, 966 (Fla. 2d DCA 2013).

“Neither section protects a discretionary trust from garnishment by a former spouse with a valid order of support.”

Berlinger, 133 So. 3d at 966.

The distinction the court drew is precise and it is worth holding onto. A support claimant still cannot compel a distribution, and still cannot attach the interest sitting inside the trust. Those are the two things subsection (2) forbids. What the claimant can do is stand in the path of the distributions the trustee decides to make, and take them as they come out. In 2019 the same court applied that to payments made to third parties for a beneficiary’s benefit, holding it made no difference that the beneficiary never touched the money himself.

How that exception works, who qualifies for it, and the last resort condition the Legislature attached to it are the subject of the companion page on Fla. Stat. 736.0503, the exceptions to a spendthrift provision.

When the Beneficiary Is Also the Trustee

Subsection (3) is short, it is written in the driest sentence in the section, and it decides an enormous amount of ordinary Florida estate planning. It applies whenever the same person is both trustee and beneficiary, which is exactly what happens when a parent names a child as trustee of that child’s own share.

Here is the idea in plain English. If a beneficiary serving as trustee could simply pay themselves whatever they wanted, their creditors would have a strong argument that the interest is really theirs. Florida’s answer is to limit that power with an ascertainable standard, meaning language confining distributions to something like health, education, maintenance, and support. Where the trustee’s discretion to distribute to themselves is limited that way, subsection (3) provides that a creditor may not reach or compel distribution of the beneficial interest except to the extent the interest would have been reachable if the beneficiary were not serving as trustee.

In other words, the standard puts the beneficiary back where they would have been with an independent trustee. Without it, a beneficiary trustee with unlimited discretion over their own distributions is holding something that looks a great deal like ownership.

That is why an experienced drafter does one of two things when a child is going to serve as trustee of their own trust. Either confine the child’s power over distributions to themselves within an ascertainable standard, or require an independent cotrustee for any distribution to a trustee who is also a beneficiary. Both are ordinary. Neither is automatic, and a trust that skipped both has a weaker position than the family assumes. We have found no Florida appellate decision construing subsection (3), so what a court does with a marginal standard is not something anyone can promise you from a web page.

What This Means if You Are Drafting

Everything above comes back to a handful of paragraphs that somebody typed years before any of the trouble started. If you are the one deciding how to leave money to a child, here is what actually carries the weight.

That is planning work, it is quoted flat at the consult, and the quote is honored. Our posted fees are on the pricing page, and government costs such as recording fees are additional and passed through at cost. If a child has a genuine disability, the trust to ask about is a special needs trust, which is a different instrument with different rules. If you are thinking about protecting your own assets rather than a child’s inheritance, start with Florida asset protection trusts, because this section will not do that job and it is important to know why before you spend money on the wrong structure.

What This Means if You Are Collecting

If you hold a judgment against someone who lives on a trust, the honest picture is this. Under Florida law the front door is closed. You will not compel a distribution, and arguing that the beneficiary really runs the trust has already been tried on far better facts than yours and failed.

What is left is narrower and does not require proving anyone did anything wrong.

And a boundary worth stating plainly, because it flips the whole analysis. If the person you are chasing created and funded the trust themselves, this section is not the one that governs. Claims against a settlor run under section 736.0505, and its rules are far less friendly to the trust. No Florida appellate court has construed that section, but Florida’s federal courts have, and in 2019 one of them held that a Cook Islands trust that had moved to Belize was not protected from execution under Florida law at all. That page is where a self-settled trust gets analyzed, from either side.

We take both sides of these matters. Trust disputes are quoted after we have read the documents, because the work depends entirely on what the instrument says and what has actually happened. The consult is a free 30 minutes, and there is no charge for hearing that we do not think the case is there. Book a free consult →

Frequently Asked Questions

Can a Creditor Reach a Discretionary Trust in Florida?

Generally no, and the rule is stated in section 736.0504(2). If a trustee may make discretionary distributions to or for the benefit of a beneficiary, a creditor of that beneficiary may not compel a distribution that is subject to the trustee’s discretion, and may not attach or otherwise reach whatever interest the beneficiary might have as a result of the trustee’s authority to make those distributions. In 2010 Florida’s Fourth District applied that rule in favor of a beneficiary whose judgment creditor held a judgment of more than one million dollars, even though the trial court had found the beneficiary exercised complete practical control over the trust and the trustee simply rubber-stamped his decisions. Once a distribution is actually made and received, it is fair game. The protection is over the interest inside the trust, not over money in the beneficiary’s hand.

Does It Matter That the Trustee Is Abusing the Discretion?

Not for the creditor. The definition in subsection (1) is deliberate. A discretionary distribution is one subject to the trustee’s discretion whether or not the discretion is expressed as a standard, and whether or not the trustee has abused the discretion. So a creditor cannot bootstrap a claim by arguing that a reasonable trustee would have paid the beneficiary more. It matters enormously for the beneficiary, though. Subsection (4) preserves the beneficiary’s own right to sue the trustee for an abuse of discretion or a failure to comply with a distribution standard. That is a claim the beneficiary owns, and a creditor does not get to bring it for them.

What if the Beneficiary Really Controls the Trust?

Under Florida law that is not the question a court asks. In the leading case the trial court found that the beneficiary made all the important decisions, including investment decisions, and that the trustee never independently reviewed any of them. The appellate court agreed the facts were extreme and reversed anyway, because the statute directs a court to the terms of the trust rather than to how the people involved have behaved. What would have changed the result is an express right in the document itself, meaning language letting the beneficiary demand a distribution, withdraw principal, or terminate the trust and take the assets. Practical influence over a compliant trustee is not the same thing, and the difference is worth real money.

Can Child Support or Alimony Reach a Discretionary Trust?

That is the significant exception, and the answer is different. Section 736.0503 makes a spendthrift provision unenforceable against a beneficiary’s child, spouse, or former spouse who holds a judgment or court order for support or maintenance. In 2013 Florida’s Second District held that section 736.0504 does not stop a former spouse in that position from garnishing distributions the trustee actually chooses to make, and in 2019 the same court applied that to a special needs trust and a child support arrearage. A court still cannot order the trustee to make a distribution. It can attach the ones the trustee makes, including payments made to third parties for the beneficiary’s benefit. See our page on Fla. Stat. 736.0503 for how that works.

Does a Spendthrift Clause Do the Same Thing as This Section?

They work together, and they are not the same. A spendthrift provision under section 736.0502 keeps a beneficiary from transferring an interest and keeps a creditor from reaching an interest or a distribution before the beneficiary receives it. Section 736.0504 addresses something narrower and stronger. Whether or not the trust contains a spendthrift provision, a discretionary interest cannot be compelled or attached. That opening phrase matters. A trust with discretionary distributions carries this protection even if the drafter forgot the spendthrift language, and a well-drafted Florida trust carries both. Our Florida spendthrift trust page covers the clause itself.

What About the Beneficiary’s Own Creditors After a Distribution?

Once the trustee distributes and the beneficiary receives, the money is the beneficiary’s and it is exposed like any other asset they own, subject to whatever Florida exemptions apply to the form it takes. This is why the timing and the size of distributions to a beneficiary in trouble is a real decision rather than an administrative one, and why a trustee facing that situation should get advice before writing the check rather than after. There is also a separate rule worth knowing. Under section 736.0506, a creditor can reach a distribution the trust required the trustee to make if the trustee has not made it within a reasonable time after the designated date. A mandatory distribution sitting unpaid is not protected by the same shield.

Common Situations

The son with a lawsuit and an inheritance coming. A widow in Sarasota is updating her plan and her middle son is a defendant in a business case that could go badly. Her current will leaves everything outright, in thirds. The change that matters is not complicated and it is not expensive. His third goes into a discretionary trust with a spendthrift clause, and someone other than him decides what comes out. Done before the judgment, that is ordinary estate planning. Done after, it is a very different conversation about transfers, which is a reason to have the conversation early.

The trustee who never says no. Two brothers, one the trustee of the other’s trust, and the trustee has approved every request for eleven years without ever looking at the investments. Under Florida law that pattern is protected against the beneficiary’s creditors, since the courts look at the document rather than the behavior. It is not protected against the remainder beneficiaries, who are watching the trust shrink. Those are the people with the real claim here, and the sections that govern it are the duty to account and the removal statute.

The judgment holder who has read the file. A creditor with a $400,000 judgment has spent a year documenting that the debtor controls his family trust in every practical sense. Honestly read, that year did not buy much under this section. What is worth thirty minutes is a careful read of the trust instrument for a withdrawal right, a termination power, or a mandatory distribution nobody has been paying, because that is where these cases are actually won and it is a question of paper rather than proof.

Sources of Law

Updated on August 13, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. General information about Florida law and published court decisions, not legal advice, and no attorney-client relationship is created. Whether section 736.0504 protects a particular trust depends on that trust’s own language and the facts, which we review at a free consult. Please do not send confidential details until we have connected.

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