The power, and who can give it up
Many charitable trusts leave the trustee to decide which charities actually receive money, either from a wide class or from a named group. This section allows that discretion to be surrendered.
The trustee of a trust, all of the unexpired interests in which are devoted to one or more charitable purposes, may release a power to select charitable donees unless the creating instrument provides otherwise.
Section 736.1208(1), Florida Statutes.
Two limits sit in that sentence. All of the unexpired interests must be devoted to charitable purposes, which excludes a split interest trust while an individual beneficiary is still taking. And the creating instrument can forbid it.
Why would a trustee want to give up a discretion? Usually for tax reasons. A foundation’s federal classification, and the deductions available to donors, can turn on how tightly the charitable beneficiaries are identified. Releasing the selection power is one way to change that picture without going to court.
Two ways to do it, and they are not equivalent
Subsection (2) allows a release to apply to all or any part of the property subject to the power, and to reduce or limit the organizations or classes in whose favour it is exercisable. So this is not all or nothing; a trustee can narrow the field without eliminating the discretion.
The section then distinguishes two kinds of release by how they must be delivered, and the distinction tells you how seriously it takes each.
- Specifying charities as beneficiaries. A copy of the release goes to each designated charitable organization. The recipients are the ones who gained.
- Reducing the class of permissible charities. Notice of the release, including a copy, goes to the Attorney General.
The logic is that when a class is narrowed, the charities that were removed from it may not be identifiable and cannot be told. The Attorney General, whose role in Florida charitable trusts appears throughout the chapter and in section 736.0110(3), receives the notice on behalf of the charitable interest generally.
The formalities
A release must be effected by a duly acknowledged written instrument signed by the trustee, and delivered as the section requires. Duly acknowledged means before a notary or other authorised officer, which is a heavier formality than the Code imposes on most trustee acts.
That is appropriate, because a release permanently reduces the trustee’s own powers and, in one form, changes who supervises the trust.
The subsection that only goes one way
If a release is accomplished by specifying a public charitable organization or organizations as beneficiary or beneficiaries of the trust, the trust at all times thereafter shall be operated exclusively for the benefit of, and be supervised by, the specified public charitable organization or organizations.
Section 736.1208(5), Florida Statutes.
Read at all times thereafter, and read supervised by.
This is not merely a narrowing of who benefits. Specifying a public charity in a release means the trust must from then on be operated exclusively for that charity, and the charity supervises it. The trustee has handed over both the beneficial interest and the oversight.
Nothing in the section provides a route back. There is no revocation provision, no mechanism for the charity to consent to a change, and no time limit on the words at all times thereafter. Whether the general modification provisions elsewhere in the Code could reach such a trust is not addressed here, and with no case law on the section, it is not addressed anywhere.
The practical advice writes itself. A release under subsection (5) is a decision to make once and not to make quickly. Narrowing a class under subsection (2) is a materially different and less final act.
No Florida court has cited this section
A search returns no citing documents at any precedential status in any court we searched. That was true of every section of this Part, so we verified the search itself, including by confirming that the identical query returns hits for sections known to have case law.
A release is a unilateral act with defined formalities, taken for tax reasons and delivered to people who benefit from it. There is rarely anyone with both the standing and the motive to litigate it, which is the likeliest explanation for the silence.
The open questions are the ones you would expect. Whether a defectively delivered release is void or merely ineffective until delivery is completed. Whether subsection (5) can ever be undone. And what supervised by requires of a charity that may not want the role.