The rule, and how wide it is
A provision in a trust instrument purporting to penalize any interested person for contesting the trust instrument or instituting other proceedings relating to a trust estate or trust assets is unenforceable.
Section 736.1108(1), Florida Statutes.
Florida does not enforce no-contest clauses in trusts. A great many Florida trusts contain one anyway, often carried across from a form or drafted by someone working from another state’s law, and a beneficiary reading such a clause is usually reading a threat the law will not back.
Note the two limbs. The first covers contesting the trust instrument. The second covers instituting other proceedings relating to a trust estate or trust assets, which is materially wider. A clause that purports to punish a beneficiary for petitioning about an accounting, or for seeking a trustee’s removal, is within the second limb even though nobody is attacking the trust’s validity.
Two further points. It applies to any interested person, not only to beneficiaries. And the section says such a clause is unenforceable rather than void, so the surrounding instrument is unaffected.
The date is not the one you would expect
This section applies to trusts created on or after October 1, 1993. For purposes of this subsection, a revocable trust shall be treated as created when the right of revocation terminates.
Section 736.1108(2), Florida Statutes.
Almost every section of chapter 736 runs from July 1, 2007. This one runs from October 1, 1993, because it carried forward a rule that predated the Trust Code. So the reach is far longer than the rest of the chapter, and anyone checking an older trust against the Code’s general effective date will get this one wrong.
Why old revocable trusts are covered anyway
The second sentence of subsection (2) is doing more work than its length suggests, and it closes most of the gap the 1993 date would otherwise leave.
For this purpose a revocable trust is treated as created when the right of revocation terminates. For an ordinary revocable living trust that is the settlor’s death. So a trust signed in 1985, amended over decades, whose settlor died in 2015, is created in 2015 for the purposes of this section, comfortably after October 1, 1993, and its no-contest clause is unenforceable.
The clause that may survive is therefore the one in an irrevocable trust created before October 1, 1993, where there was no right of revocation to terminate. That is a narrow and shrinking category, and it is the only place a Florida no-contest clause in a trust is likely to have teeth.
The Code reinforces the rule elsewhere. Section 736.0105(2)(w) lists the effect of a penalty clause among the provisions the terms of a trust cannot override, which is belt and braces given the clause is already unenforceable.
Where the line actually falls
Because outright penalties do not work, the drafting has moved, and the real question in practice is whether a given clause is a penalty at all. The Fifth District addressed exactly that.
Florida law invalidates penalty clauses in trusts, declaring: “A provision in a trust instrument purporting to penalize any interested person for contesting the trust instrument or instituting other proceedings relating to a trust estate or trust assets is unenforceable.” § 736.1108(1), Fla. Stat. (2010).
this public policy is codified in section 736.1108(1) and its probate analogue, section 732.517.
Dinkins v. Dinkins, 120 So. 3d 601 (Fla. 5th DCA 2013).
The clause in that case was not a no-contest clause. It was a conditional bequest. The widow would receive $5 million if she waived her elective share. Both parties accepted that a true no-contest clause would be unenforceable. The court held this was something different and enforced it, concluding that such a provision "does not penalize the beneficiary for purposes of section 736.1108(1)."
That is the distinction to carry away. Taking something away because a beneficiary sues is a penalty and will not be enforced. Offering something extra on condition that a beneficiary gives up a separate statutory right is a bargain, and may be. A settlor who wants to discourage litigation drafts the second, not the first.
One live question remains, and a Florida court has flagged it without answering. In a 2021 Third District case a trust required a beneficiary to post a $200,000 bond before bringing certain proceedings. The beneficiary sought a declaration that the requirement was unenforceable under this section. The court reinstated that claim, having found it had been wrongly dismissed, and added in terms that it expressed no opinion on the merits of the issue. So whether a bond condition is a penalty within the second limb of subsection (1) is undecided in Florida, and it is the obvious next battleground given that outright forfeitures do not work.