Should You Have a Trust in Florida? A Plain Guide

Should you have a trust in Florida? The answer turns on your property, your family, and what you want to happen later. A trust can help property avoid probate and let you control when people receive it. It is not a cure-all. It works only when it is written correctly and the property is actually moved into it. This guide walks through the decision in plain steps. Trust Counsel, PL is a Coral Gables firm that concentrates in trust and estate matters for Florida families, beneficiaries and fiduciaries.

What a trust is, in plain terms

A trust is a written set of instructions for holding property and passing it to the people you name. Three roles matter. The settlor creates the trust. The trustee manages the property under its terms. The beneficiary receives the benefit.

Florida’s rules for trusts sit in Chapter 736 of the Florida Statutes, called the Florida Trust Code. A trust is created only if the settlor has capacity and shows intent to create it. The trust also needs a definite beneficiary or a listed exception, and the trustee must have duties to perform. The same person cannot be both the sole trustee and the sole beneficiary, under § 736.0402.

A trust is not one magic document that protects everything you own. It controls only the property that is placed under it. Think of it as instructions that work only for what is inside it.

Trust versus will: how the two documents differ

A will takes effect at death, and property it controls usually goes through probate. Probate is the court-supervised process of settling an estate. A personal representative (often called an executor) carries out the process. ACTEC’s explanation of probate describes how court involvement can arise.

A revocable trust works differently. You can change it during your lifetime. Property titled in the trust generally passes under its terms, outside probate. That is the main reason many Florida families use one.

Most people still keep a will. A pour-over will sends anything left outside the trust into it at death. Florida law allows a will to leave property to a trust that already exists. That gift is not invalid just because the trust can be revoked or amended, under § 732.513, but an entire revocation of the trust by written instrument before death invalidates the gift.

Reasons Florida families set up a revocable trust

Most families set up a revocable trust to avoid probate for trust assets, plan for incapacity, and control how gifts are paid out. Each benefit depends on the trust being funded and the right successor being named.

Incapacity is often the first concern. If you can no longer manage your property, a successor trustee named in the trust can step in. When a trusteeship must be filled, Florida follows a set order. For a noncharitable trust, when a trusteeship must be filled, Florida follows a set order: the person named in the trust comes first, then a person appointed by unanimous agreement of the qualified beneficiaries, then a person the court appoints, under § 736.0704.

Trust terms generally stay out of the public court file. A will, by contrast, is filed when it goes through probate. A trust can also hold property for younger or dependent heirs and release it over time. ACTEC’s guidance on trusts for children notes that trusts can control when and how beneficiaries receive assets.

When a trust may not be the right tool

A trust may add little for a small estate. It may also add little when most property already passes by beneficiary designation or joint ownership. The answer depends on the facts. Those facts include the type and location of your assets, your family structure, any business interests, and how much control you want to keep.

Federal estate tax is one of those facts. Whether that figure matters for your estate is a separate planning question.

Be careful with trust products sold as quick fixes. ACTEC’s discussion of trust structures warns that promotional structures may create tax and creditor-protection risks. A trust’s value comes from its drafting and funding, not from its name.

Funding the trust: the step people most often miss

A trust controls only the property that has been moved into it or named to it. This step is called funding. Bank and brokerage accounts usually need to be retitled in the trust’s name. Real estate moves by deed.

Under § 689.01, a conveyance of a freehold interest or an interest for more than 1 year in real property must be in writing and signed in the presence of two subscribing witnesses, though no witnesses are required for a lease of real property. Fla. Stat. § 689.01 reads: “unless by will and testament, or other testamentary appointment, duly made according to law; and no estate or interest, either of freehold, or of term of more than 1 year, or any uncertain interest of, in, to, or out of any messuages, lands, tenements, or hereditaments, shall be assigned or surrendered unless it be by instrument signed in the presence of two subscribing witnesses by the party so assigning or surrendering, or by the party’s lawfully authorized agent, or by the act and operation of law; provided, however, that no subscribing witnesses shall be required for a lease of real property or any such instrument pertaining to a lease of real property.” The statute also allows that witnessing to happen through audio-video technology. The deed should match the trust’s exact name and the property’s legal description.

Retirement accounts and life insurance usually pass by beneficiary designation. They generally should not be retitled. Their designations need to match the trust plan. A common mistake is a trust that exists on paper but holds little or nothing. Property that was never moved may end up in probate.

Choosing a trustee and understanding the trustee’s duties

A trustee can be a family member, a friend or a professional. The choice affects cost, communication and how smoothly administration runs. Florida law sets the core duties for every trustee.

A trustee must administer the trust in good faith and in line with its terms and the beneficiaries’ interests, under § 736.0801. A trustee must act solely in the beneficiaries’ interests. A sale, encumbrance, or other transaction involving the investment or management of trust property that the trustee enters into for the trustee’s own personal account, or that is otherwise affected by a conflict between the trustee’s fiduciary and personal interests, is voidable by an affected beneficiary unless one of the listed exceptions applies, including that the trust terms authorized it or the court approved it, under § 736.0802. A trustee must also act as a prudent person would, under § 736.0804.

Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. Lawyers who serve as trustees raise separate questions. ACTEC’s discussion of lawyers as trustees notes that fiduciary and legal services can be separate roles with separate fees.

Common trust mistakes that lead to disputes

Most trust disputes start with a funding gap, a late change, or a trustee who stops acting. Each one can create a court question.

Under § 736.0406, a trust or part of a trust procured by fraud, duress, mistake or undue influence is void. Changes made late in life or under family pressure can raise these questions. Our page on undue influence in revocable trust amendments covers that issue.

A revocable trust can be amended under § 736.0602. If the trust gives no method, a later will or codicil that expressly refers to the trust, or that specifically devises property that would otherwise pass under the trust, can work. So can other clear and convincing evidence of the settlor’s intent. When a trustee stops acting, a court may appoint an additional trustee, as discussed on our court-appointed trustee page.

Timing matters in a contest. Under § 736.0207, a contest of a revocable trust cannot start until the trust becomes irrevocable by its terms or the settlor dies. This section does not prohibit such action by the guardian of the property of an incapacitated settlor. Under § 736.0604, an action to contest the validity of a trust that was revocable at the settlor’s death is barred if not commenced within the earlier of the time provided in chapter 95 or six months after the trustee sent the person a copy of the trust instrument and a notice of the trust’s existence, the trustee’s name and address, and the time allowed for commencing a proceeding. For more context, see our trust litigation overview.

Talking with a Florida trust attorney about your facts

A conversation with a trust lawyer early helps you sort your facts before anything is signed or filed. Many people reading about trusts are looking into this for a parent, a sibling, or an estate already in process. The choice often comes under time pressure.

Bring a short list of facts. What do you own, and how is each item titled? Who is named on each beneficiary designation? Who would serve as trustee or personal representative? Is any family member concerned about the plan?

Trust Counsel’s only office is in Coral Gables. Leslie V. Marenco is the responsible attorney for this page. We serve clients in Fort Lauderdale, Boca Raton and other Florida communities. The first consultation is free, confidential and without obligation to continue.

If you’re weighing a trust while a parent’s affairs are already moving, call (305) 707-7126 or schedule a free call online.

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