Navigating New Tax Laws: What Florida Trustees Need to Know in 2025

Effective January 1, 2025, Florida enacted the Florida Uniform Fiduciary Income and Principal Act (FIPA), adopting the Uniform Fiduciary Income and Principal Act framework to replace its predecessor from 1975.¹

The landscape of trust administration and estate planning in Florida is changing rapidly in 2025, with new laws and federal tax shifts poised to impact how trustees manage and protect assets. For trustees, beneficiaries, and families alike, understanding these changes is essential to ensure compliance, optimize tax outcomes, and uphold fiduciary duties.

Here’s what you need to know about the latest developments affecting Florida trusts in 2025.

1. The Florida Uniform Fiduciary Income and Principal Act (UFIPA/FIPA)

Major modernization for trustees.

Effective January 1, 2025, Florida enacted the Florida Uniform Fiduciary Income and Principal Act (FIPA), adopting the Uniform Fiduciary Income and Principal Act framework to replace its predecessor from 1975.¹

Key Features:

• Flexible allocation: FIPA expands trustee authority to allocate receipts and disbursements between income and principal, accommodating modern asset classes such as digital and alternative investments.²

• Unitrust conversions: Trustees may convert traditional income trusts into unitrusts, and vice versa, without court approval.³

• Total-return investing: The law affirms a total-return approach, allowing trustees to emphasize overall portfolio performance while meeting the needs of both current and remainder beneficiaries.⁴

• Broader application: The Act applies to all trusts administered under Florida law, including those created in other states but administered locally.²

Why it matters:

The FIPA framework offers trustees broader discretion to modernize trust administration practices and better align with family needs, investment performance, and long-term planning.⁴

2. Federal Estate, Gift, and GST Tax Changes in 2025

Sunset of the Tax Cuts and Jobs Act (TCJA).

Unless extended by Congress, the higher estate, gift, and generation-skipping transfer (GST) tax exemptions enacted under the TCJA will sunset after December 31, 2025.⁵

Key implications for trustees:

• More estates subject to tax: The exemption is expected to drop from nearly $14 million to roughly $6–7 million per person in 2026, increasing the number of taxable estates.⁶

• Lifetime gifting strategies: The 2025 annual gift tax exclusion is $19,000 per recipient, but the lifetime exemption will reset to pre-TCJA levels unless legislative action is taken.⁵

• GST planning: The GST exemption will also be cut in half, affecting dynasty trusts and other long-term planning vehicles.⁶

• Florida’s advantage: Florida imposes no state estate or inheritance tax, preserving its reputation as a tax-friendly jurisdiction for high-net-worth families.⁷

3. Strategic Actions for Trustees in 2025

A. Review and update trust documents.

Trustees should reassess trust instruments, especially those approaching the revised federal exemption threshold, to ensure they remain optimal under evolving laws.⁶

B. Consider unitrust conversions and total-return investing.

FIPA allows trustees to adopt unitrust models to provide stable distributions while aligning with modern investment philosophies.¹ Documenting these decisions supports fiduciary transparency and reduces the risk of conflict.

C. Accelerate gifting and wealth transfers.

Given the sunsetting TCJA exemptions, trustees and grantors may wish to complete major gifts or trust fundings by year-end 2025.⁵

D. Monitor beneficiary rights and fiduciary duties.

Florida law requires trustees to act with loyalty, impartiality, and care, and to provide annual accountings and communications consistent with statute and trust terms.⁸

Effective January 1, 2025, Florida’s second $25,000 homestead exemption amount is indexed to inflation, which could incrementally reduce property taxes on trust-owned residences.⁷

4. Homestead and Property Tax Updates

Inflation-indexed exemption.

Effective January 1, 2025, Florida’s second $25,000 homestead exemption amount is indexed to inflation, which could incrementally reduce property taxes on trust-owned residences.⁷

5. The Bottom Line: Proactive Planning Is Essential

2025 presents a critical inflection point for trustees. Florida’s statutory reforms and federal tax changes require active review of trust structures, asset allocations, and administrative practices.

Trustees should:

• Consult with estate planning advisors and tax professionals regularly.

• Stay current on legislative changes that impact trust obligations and tax exposure.

• Maintain diligent records and document all communications with beneficiaries.

With timely action and proper guidance, trustees can uphold their fiduciary responsibilities and navigate the 2025 landscape with clarity and confidence.

Sources

1. Florida Bar Journal – Florida Adopts Uniform Fiduciary Income and Principal Act

2. Florida Senate – SB 262 Analysis (2025)

3. Uniform Law Commission – UFIPA Overview

4. Florida Bar Journal – Total Return Approach to Trust Investing

5. Congressional Research Service – Federal Estate and Gift Tax Overview

6. Joint Committee on Taxation – 2025 Federal Tax Outlook

7. U.S. Census Bureau – State Tax Structures Summary

8. Cornell LII – Florida Statute §736.1007 (Trustee Duty to Account)

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Heather Maltby, Esq. and Jennifer Akin, Esq. of Coastal Trustee Group, LLC, of St. Augustine, Florida, providing lifetime, at-need, and multi-generational professional trustee services.

Coastal Trustee Group LLC (CTG) is an independent, boutique trustee firm dedicated to serving families in Northeast Florida and the Fun Coast with integrity, objectivity, and care. Founded by attorneys Jennifer Akin and Heather Maltby— both trusted names in St. Augustine estate law— CTG was created to provide a better solution for families who want professional, impartial trust administration without the conflicts or burdens that can arise when appointing an individual trustee. For a consultation, request a consultation online or call (904) 827-7777.

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