Beginning January 1, 2025, the Florida Uniform Fiduciary Income and Principal Act (FUFIPA) will introduce major updates to how trusts and estates are administered across the state. Replacing the older Uniform Principal and Income Act, FUFIPA modernizes the rules governing how fiduciaries divide income and principal — a shift that will impact trustees, beneficiaries, and estate planners from Miami to Palm Beach.
For those managing complex assets such as real estate, family businesses, or digital assets, understanding FUFIPA’s provisions is critical. This guide explains what the new law does, how it affects existing trusts, and what steps Florida families should take before the new year.
What Is FUFIPA?
FUFIPA, enacted through HB 923, aligns Florida with more than 20 other states adopting the Uniform Fiduciary Income and Principal Act. It governs how fiduciaries—including trustees and personal representatives—allocate receipts and disbursements between income and principal.
The goals of the legislation include:
- Clarifying ambiguous allocations (e.g., royalties, capital gains).
- Providing greater flexibility to adjust income and principal fairly.
- Protecting beneficiaries while streamlining compliance.
For Miami residents, FUFIPA directly affects trusts holding diverse assets like Coconut Grove properties, cryptocurrency, or family business shares. To see how similar updates have modernized probate, explore technology and probate in Florida.
Key Changes Under FUFIPA 2025
1. Flexible Income and Principal Adjustments
FUFIPA allows fiduciaries to reallocate income to principal (or vice versa) when needed to balance the interests of current and remainder beneficiaries.
For example:
A trustee managing a Miami real estate trust might allocate rental income to principal to fund property improvements, ensuring both present and future beneficiaries benefit.
Impact: This flexibility is particularly useful for blended families or trusts with complex beneficiary structures.
Action: Review your trust documents to ensure they permit FUFIPA-based adjustments and reflect your intent. Learn how to avoid probate pitfalls in Miami while updating your estate documents.
2. Modernized Rules for Digital Assets
FUFIPA formally recognizes digital assets such as cryptocurrency, NFTs, and online royalties, clarifying how they should be allocated.
Example: A Miami artist’s trust that earns NFT royalties can distribute them as income to current beneficiaries rather than classifying them as principal.
Impact: This modernization simplifies estate administration for digital-heavy portfolios.
Action: Update your trust language to specify how digital assets should be treated, especially if your estate includes intellectual property or royalties — see probate for artists and creative works.
3. Unitrust Conversion Option
FUFIPA permits converting certain trusts into unitrusts, which distribute a fixed annual percentage (typically 3–5%) of total asset value.
Example: A $2 million trust converted to a 4% unitrust pays $80,000 yearly, creating predictable income despite market swings — especially relevant for Miami real estate investors.
Impact: Unitrusts reduce beneficiary disputes and stabilize distributions.
Action: Discuss conversion with a Miami probate attorney to determine whether this structure fits your estate’s needs.
4. Simplified Allocation for Business Income
FUFIPA simplifies how business income is treated, generally classifying receipts as income unless clearly reinvested in the business.
Impact: This is especially beneficial for entrepreneurial families or those planning business succession.
Action: Review trust and entity documents to ensure business holdings align with FUFIPA’s default rules and your broader estate planning strategy.
Implications for Miami Residents
FUFIPA affects every stage of trust and estate administration in Florida, particularly for high-value or multi-asset estates.
- Real Estate Trusts: Trustees managing rental properties or investment condos in Miami Beach or Coral Gables can now allocate income more flexibly — see Miami real estate probate guidance.
- High-Net-Worth Estates: Families with $5–$20 million estates should coordinate FUFIPA adjustments with strategies from TCJA sunset planning.
- Beneficiary Disputes: Unitrust distributions can reduce conflicts among blended or estranged families — learn how attorneys help with family dispute mediation.
Steps to Prepare for FUFIPA
- Review Existing Trusts: Confirm that your trust language either aligns with FUFIPA defaults or explicitly overrides them.
- Update Fiduciary Powers: Grant trustees authority to use FUFIPA’s adjustment options and consider adding digital asset provisions.
- Educate Beneficiaries: Explain how income/principal adjustments may affect payouts.
- Consult a Local Attorney: Work with a Miami estate attorney familiar with Florida trust law. You can schedule a consultation or learn more about our firm.
Why FUFIPA Matters in 2025
FUFIPA enhances clarity, flexibility, and fairness in trust administration. It also reduces litigation risks — especially in cases involving complex asset classes or international holdings.
Failure to update your trust could cause misallocations, disputes, or tax inefficiencies. Aligning with FUFIPA now ensures compliance and protects both trustees and beneficiaries.
Conclusion
FUFIPA 2025 transforms the fiduciary landscape in Florida, offering opportunities for better income allocation and modern trust management. But it also requires proactive review and revisions.
At Estate Planning Attorney, our Miami-based legal team helps clients adapt to FUFIPA by reviewing trust terms, educating fiduciaries, and ensuring compliance with Florida’s evolving estate laws.
Get ahead of the change — schedule a consultation today to safeguard your family’s legacy under the new law.
