What Makes a Trust Legal in Florida?

What makes a trust legal? In Florida, a trust is created only when a few basic requirements are met. The person creating it needs capacity and must show intent. Each trust document is different, so questions about a specific trust are worth reviewing with an attorney. If you were handed a trust document after a family member’s death or illness, start with these points.

What a trust is, in plain terms

A trust is an arrangement in which one person holds property for the benefit of another, under terms usually set out in a trust instrument but which may also be established by other evidence admissible in court. The person who creates it is the settlor. The person who manages the property is the trustee. The person who benefits is the beneficiary. Florida law defines a settlor as a person who creates a trust or puts property into it (Fla. Stat. § 736.0103).

One person can hold more than one role. A parent can be both settlor and trustee of a living trust and still name others as beneficiaries.

The trust estate is the property actually placed in the trust. Property never moved into the trust stays outside it, even if the settlor meant it to be inside.

People often call a trust a company. It isn’t a company with shares or a board. A trust is governed by its terms and by the Florida Trust Code.

Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. A personal representative (often called an executor) runs a probate estate, which is a separate process from a trust.

The core requirements for a valid trust in Florida

• Capacity. The settlor must have capacity to create the trust. For a revocable trust, that is the same capacity needed to make a will (Fla. Stat. § 736.0601).
• A definite beneficiary or permitted purpose.
• Trustee duties. The trustee must have duties to perform.
• No single person in both sole roles. The same person cannot be both the sole trustee and the sole beneficiary.

Fraud, duress, mistake or undue influence can also undo a trust. If the trust was procured that way, that part is void. The remainder of a trust not procured by fraud, duress, mistake, or undue influence is valid if it is not invalid for other reasons (Fla. Stat. § 736.0406).

How a trust is created and funded

A trust can be created by transferring property to a trustee, by an owner declaring that he or she holds identifiable property as trustee, by a will or other disposition that takes effect at death, or by exercise of a power of appointment in favor of a trustee (Fla. Stat. § 736.0401). Often, a settlor signs a trust document and then moves property into it.

Signing is only half of the job. A trust document with no property in it may do little in practice. Check whether bank accounts, real estate and business interests were actually retitled into the trust’s name. Property still titled in the settlor’s own name generally has not moved into the trust.

A testamentary trust is created by a will and takes effect at death. Its administration runs through the will and the probate process. ACTEC’s probate explainer describes how probate works and when disputes need court involvement.

Florida also recognizes trusts that are not written down. The creation of an oral trust, and its terms, must be shown by clear and convincing evidence (Fla. Stat. § 736.0407).

Trust, will, and other terms that cause confusion

A trust and a will are different tools, and a trust can operate while the settlor is alive. A will takes effect at death and goes through probate court. A trust can hold property during life and may help avoid some probate steps, depending on how it is funded.

Unless its terms say it is irrevocable, a settlor may revoke or amend the trust, though this rule does not apply to a trust created under an instrument signed before the Florida Trust Code took effect (Fla. Stat. § 736.0602). That is what makes a revocable trust revocable.

The words “trust deed” usually name a property document, not the trust itself. Read the title on each paper you receive.

Validity turns on the requirements above, the trust’s terms and the facts.

Online summaries can describe a trust in simple words. A summary does not replace the signed trust instrument itself.

Why a trust’s validity is sometimes challenged

Common grounds for challenging a trust include lack of capacity, undue influence, fraud, and a signature or amendment that may not be genuine. The person challenging the trust carries the burden of proving those grounds (Fla. Stat. § 736.0207).

Timing matters. For a revocable trust, a contest generally cannot start until the trust becomes irrevocable or the settlor dies, though a guardian of the property of an incapacitated settlor may bring one. A contest is also barred if it does not start within the earlier of the chapter 95 period or six months after the trustee sends the required notice (Fla. Stat. § 736.0604).

After an irrevocable trust begins, the trustee must notify qualified beneficiaries within 60 days after learning of it. On reasonable request, the trustee must also provide a complete copy of the trust instrument (Fla. Stat. § 736.0813).

Each dispute turns on its own document and evidence. General information cannot predict how a specific trust contest will come out.

Is a trust the right tool? Inheritance, houses and the facts that matter

Whether to put a house in a trust or let it pass by inheritance turns on the facts. How title is held today matters.

Four questions shape the answer:

• Who holds title to the house right now?
• Who is named as trustee and beneficiary, and are they living and willing to serve?
• Is the trust revocable or irrevocable, and has any amendment been signed?
• Has any notice been sent, and when?

A trust signed during an illness can raise capacity and undue influence questions. Readers already in a dispute can learn more about the firm’s trust litigation attorney practice, which covers trust validity and administration disputes.

Next steps for reviewing a trust document

Start by gathering the full signed trust, every amendment, and any notice you received. Keep these items together before you talk to anyone about the next step.

• The complete signed trust and every amendment.
• The dates and signatures on each page, plus the names of the settlor, trustee and beneficiaries.
• A list of the assets and how each one is titled.
• Any notice from a trustee, with its date.
• Any will or other document the family says relates to the same property.

This page is the responsibility of Leslie V. Marenco, a lawyer with Trust Counsel, PL in Coral Gables, Florida. The firm serves clients in Florida.

Frequently asked questions

What makes a trust legal in Florida?