The standard, in one sentence
The capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
Section 736.0601, Florida Statutes. Enacted by s. 6, ch. 2006-217, effective July 1, 2007, and never amended since.
That is the entire section. It does three useful things in one line. It fixes the standard by reference to will capacity rather than inventing a new one. It applies that standard not only to creating a trust but to amending it, revoking it, adding property to it, and directing the trustee, so each of those acts is tested separately and on its own date. And it settles that trust capacity is not some higher commercial or contractual threshold.
The practical consequence of the last point surprises people. Will capacity in Florida is a comparatively low bar. Someone can be forgetful, physically frail, dependent on others for daily care, and still have capacity. A challenge that rests on the settlor having been old and unwell is not yet a capacity case.
Why researching this section number finds almost nothing
No Florida appellate decision construes section 736.0601. We say that as our own review rather than as a certainty, and with an unusual caveat set out at the end of this page about how we checked.
The reason is not that Florida has no law on trust capacity. It is that the law is filed elsewhere. Because the statute borrows the will standard, the cases answering a trust capacity question are the testamentary capacity cases, decided under section 732.501 and its predecessors and reaching back well over a century. Those opinions do not cite section 736.0601, because they are not about trusts and most predate the Florida Trust Code entirely.
So anyone researching this by section number will conclude, wrongly, that Florida has said nothing about who can sign a trust. The answer is that Florida has said a great deal, under a different heading.
One Florida appellate decision does cite the section. In Gossett v. Gossett the number appears once, in the sentence recording what the plaintiff had asked for.
The son filed a second amended complaint seeking to invalidate the Fourth and Fifth Amended Trusts. The Trust and all of the Amended Trusts were attached to the second amended complaint. That complaint requested: the removal of the surviving spouse as trustee and appointment of a successor trustee; to set aside the Fourth and Fifth Amended Trusts for improper execution, invalidity under sections 736.0601 and 736.0402(1)(a), Florida Statutes, undue influence, duress, and tortious interference; and an accounting.
Gossett v. Gossett, 182 So. 3d 694 (Fla. 4th DCA 2015).
That is a court reciting a pleading, not construing a statute, and we are not going to present it as more. It is still worth reading, because it shows how these claims are actually framed. Improper execution, incapacity, undue influence and duress are pleaded together, in the alternative, because they turn on overlapping facts. The complaint in that case put the allegation this way.
The son alleged that the Fourth and Fifth Amended Trusts were ‘executed at a time when [the settlor’s] physical, mental, and emotional state were such that he lacked capacity or was unusually susceptible to undue influence.’
Gossett v. Gossett, 182 So. 3d 694 (Fla. 4th DCA 2015), quoting the second amended complaint.
Taking money from the trust, and contesting it anyway
Gossett does have a holding, and it answers the question a capacity client asks before any other. I already cashed the cheques the trustee sent me, have I given up my right to fight?
Florida has a renunciation rule, inherited from the English ecclesiastical courts, under which a person who has taken a benefit under an instrument must generally give it back before contesting that instrument. The Supreme Court of Florida stated it in 1950 in these terms, quoted by the Fourth District.
[B]efore the plaintiff will be permitted to contest the trust agreement through which he has derived this interest he must do equity . . . by renouncing his interest by some method or means sufficient in law to operate as a divestiture.
There are three rationales underlying the rule: renunciation 1) protects the trustee if the trust is invalidated, 2) shows that the suit is sincere and not vexatious, and 3) ensures the property is available for disposition and free from third-party claims.
Gossett v. Gossett, 182 So. 3d 694 (Fla. 4th DCA 2015), quoting and describing Barnett National Bank of Jacksonville v. Murrey, 49 So. 2d 535 (Fla. 1950).
The Fourth District then asked whether any of those three purposes was actually served on the facts, and concluded that none was.
The Trust in this case is not a self-settled trust, but the son is in a similar situation as the settlor in Fintak. He will receive more than the distributed amounts under any version of the Trust. Applying the three rationales underlying the renunciation rule, the son prevails. First, the trustee is protected because the son is entitled to more than the distributions made under any of the Amended Trusts. Second, the risk of vexatious and insincere claims is present in any case, but no more so here. Third, the distribution to the son is free from third-party claims as he is entitled to more than the distributed amount. ‘[A]n individual cannot be estopped from challenging an instrument by accepting that which he or she is legally entitled to receive regardless of whether the instrument is sustained or overthrown.’ Id. at 185.
The trial court erred in dismissing the first five counts of the second amended complaint with prejudice. Although the son did not restore the monies received, the renunciation rule is inapplicable where none of the three rationales support its application.
Gossett v. Gossett, 182 So. 3d 694 (Fla. 4th DCA 2015).
Read the reasoning rather than the result, because the result is fact bound. What carried the day was that the son would take at least as much under every competing version of the trust. He had received nothing he was not entitled to regardless of who won. A challenger in the opposite posture, who received more than they would take under any rival version, is not in Gossett’s position and the rule may still bar them until they give the money back.
The court also expressly declined to decide whether renunciation is an affirmative defence or a condition precedent, so that question remains open.
Why these fights arrive all at once
Capacity disputes about a trust rarely happen while the settlor is alive, and that is structural rather than accidental. Under section 736.0207, an action to contest the validity of all or part of a revocable trust may not be commenced until the trust becomes irrevocable by its terms or by the settlor’s death.
So a family that watched a series of amendments being signed over several years, each one moving more away from them, generally cannot do anything at the time. The whole sequence becomes contestable at once, at the death, and each amendment has to be assessed against the settlor’s capacity on the day it was signed. That is why the evidence that matters is contemporaneous. It is the medical records for that week, the drafting attorney’s file and notes, who arranged the appointment, and who was present.