A Florida community property trust is a trust signed by both spouses that declares the property in it to be community property under the Community Property Trust Act (§ 736.1501–§ 736.1512). The main reason couples consider one is federal income tax: on the first spouse’s death, community property can receive a new tax basis on both halves, not just the half that belonged to the spouse who died (26 U.S.C. § 1014(b)(6)).
Whether federal tax law will honor this elective Florida arrangement has not been settled, and the trust changes how creditors, divorce, and inheritance work for the property in it. It is a significant property-rights decision, not a different name for a joint revocable trust.
How Florida’s statute works
- Who can create one. A married couple, whether both, one, or neither spouse lives in Florida (§ 736.1505). Only trusts created, amended, restated, or modified on or after July 1, 2021 qualify (§ 736.1502).
- Formal requirements. The trust must expressly say it is a community property trust under the Act, have at least one qualified trustee (a Florida resident or a company authorized to act as trustee in Florida; either spouse may also serve), be signed by both spouses with the formalities required for trusts, and begin with a statutory warning printed in capital letters (§ 736.1503).
- Character of the property. Everything the trust owns is community property during the marriage. Property distributed out of the trust stops being community property under the Act (§ 736.1505).
- Revocability. The trust can be amended or revoked by both spouses unless it says it is irrevocable. After the first death, the surviving spouse may change how their own half passes, even if the trust says it is irrevocable (§ 736.1504).
What happens at the first death
One-half of the trust’s value belongs to the surviving spouse and is not controlled by the deceased spouse’s will. The other half passes under the deceased spouse’s will or trust terms, or by intestacy. The deceased spouse’s half is not included in the elective estate used to calculate a surviving spouse’s elective share (§ 736.1507).
The federal tax objective, and its limits
Under 26 U.S.C. § 1014(b)(6), when community property held under the community property laws of any state passes at death, the surviving spouse’s half can also receive a basis equal to its value at death, if at least half of the community interest is included in the deceased spouse’s gross estate. For assets that have gained value, that can reduce capital-gains tax when the survivor later sells. Florida’s statute says a community property trust is considered a trust established under Florida’s community property laws for purposes of that section (§ 736.1511).
There are real limits:
- A state statute cannot bind the IRS or a federal court. In Commissioner v. Harmon (1944), the Supreme Court refused to treat income under Oklahoma’s optional community property law as community income for federal income tax purposes. That case concerned income-splitting, not basis at death, but it is why the federal treatment of elective systems like Florida’s is uncertain.
- The basis adjustment works in both directions. Assets that have lost value get a lower basis.
- Retirement accounts, the home, and assets with little gain may gain nothing from the trust.
Do not create a community property trust on the expectation of a guaranteed “double step-up.” The tax result should be analyzed for your specific assets by a CPA or tax attorney before the trust is signed, and that analysis should be repeated if the law or guidance changes.
Creditors and tenancy by the entireties
An obligation incurred by one spouse alone may be satisfied from that spouse’s one-half share of the trust. An obligation incurred by both spouses during the marriage may be satisfied from the trust (§ 736.1506). Both rules are subject to Florida’s constitutional homestead protection (Art. X, § 4, Fla. Const.).
Many Florida couples hold their home and accounts as tenants by the entireties, a form of joint ownership that Florida law generally protects from creditors of only one spouse. Moving that property into a community property trust can give up that protection for half of it. For a spouse with professional or business liability risk, this may outweigh any tax benefit.
Divorce, control, and inheritance
- Divorce. When the marriage is dissolved, the trust ends and each spouse receives one-half of the trust assets. Florida’s ordinary equitable-distribution statute does not apply to those assets. If a divorce case stays pending for 180 days, the trust automatically terminates unless a spouse objects within that time, the court orders otherwise, the spouses agree in writing, or the trust says otherwise (§ 736.1508).
- Control. The trust agreement sets who manages the property (§ 736.1505). Spouses should agree on this deliberately, especially in second marriages.
- Inheritance. Each spouse controls only their own half at death. A spouse cannot use the trust to leave the survivor’s half to someone else.
- Child support. The trust does not reduce either spouse’s obligation to support a child (§ 736.1509).
The home
Property in a community property trust can continue to qualify, or newly qualify, as the couple’s homestead for constitutional and statutory purposes, if it would qualify were it titled in their own names. The spouses are treated as having beneficial title for the property-tax exemption, and moving the homestead into the trust is not treated as a change of ownership that triggers reassessment (§ 736.151). The constitutional limits on leaving a homestead when a spouse or minor child survives still need to be considered in drafting (Art. X, § 4, Fla. Const.).
When a trust can be set aside
A community property trust signed during marriage can be held unenforceable if the challenging spouse proves it was unconscionable when made, was not signed voluntarily, resulted from fraud, duress, coercion, or overreaching, or was signed without fair disclosure of the other spouse’s property and debts (absent a written waiver or actual knowledge) (§ 736.1512). The statute recommends, but does not require, that each spouse have separate counsel (§ 736.1503).
How it compares with a joint revocable trust
| Question | Joint revocable trust | Community property trust |
|---|---|---|
| Ownership character | Usually keeps the spouses’ existing ownership (separate or joint) | All trust property is community property during the marriage |
| Basis at first death | Generally only the deceased spouse’s share is adjusted | Potentially both halves, subject to the federal uncertainty above |
| One spouse’s creditors | Depends on how the property was held before | Can reach that spouse’s one-half share |
| Divorce | Ordinary equitable distribution | Trust ends; one-half of the assets to each spouse |
| Trustee | Spouses can serve alone | At least one Florida-resident individual or authorized Florida trust company |
| Signing formalities | Will formalities for the dispositive terms | Same, plus the statutory warning and declaration |
Couples who moved from community property states
Property acquired as community property while living in a community property state can keep that character in Florida. Florida has a separate statute for how it passes at death (§ 732.216–§ 732.228). Placing it in a Florida community property trust keeps its community character while in the trust (§ 736.1511).
Questions to work through with your advisers
- Which assets have large built-in gains, and which have losses?
- Is any property currently held as tenants by the entireties, and what creditor risks does each spouse face?
- How would a divorce split the trust, compared with your current arrangement?
- Who should manage the property, and who should receive each spouse’s half?
- Is either spouse in a second marriage, or are there children from other relationships?
- Who will serve as the qualified trustee, and at what cost?
- Has a CPA or tax attorney reviewed the expected tax result?
Related planning
- Revocable living trusts
- Florida homestead trust planning
- What does a surviving spouse inherit?
- Estate planning overview
Sources: Florida Statutes § 736.1501–§ 736.1509, § 736.151, § 736.1511, § 736.1512, and § 732.216 (2026); Art. X, § 4, Fla. Const.; 26 U.S.C. § 1014(b)(6); Commissioner v. Harmon, 323 U.S. 44 (1944). Checked on October 23, 2026. This page is general information, not tax advice.