{"id":6239,"date":"2026-10-30T01:34:38","date_gmt":"2026-10-30T01:34:38","guid":{"rendered":"https:\/\/trustcounsel.com\/resources\/trust-litigation-attorney\/what-are-five-assets-that-should-never-be-included-in-a-living-trust\/"},"modified":"2026-11-04T00:59:22","modified_gmt":"2026-11-04T00:59:22","slug":"what-are-five-assets-that-should-never-be-included-in-a-living-trust","status":"publish","type":"page","link":"https:\/\/trustcounsel.com\/resources\/trust-litigation-attorney\/what-are-five-assets-that-should-never-be-included-in-a-living-trust\/","title":{"rendered":"Five Assets to Keep Out of a Living Trust in Florida"},"content":{"rendered":"\n
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Estate Planning | Coral Gables, Florida<\/p>

Five Assets to Keep Out of a Living Trust in Florida<\/h1>

Some property passes by beneficiary designation or contract, not through a trust. Here is what to review before you assume your living trust covers everything you own.<\/p>

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Assets That Often Stay Outside a Living Trust<\/h2>\n

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Retirement accounts<\/h3>

IRAs and 401(k)s are usually governed by the plan's beneficiary form. Naming the trust as beneficiary, rather than owner, is a common approach, and the designation must match the plan and the trust terms.<\/p><\/div>

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Life insurance policies<\/h3>

Death benefits follow the policy's beneficiary designation. Whether a trust should receive them depends on the policy, the trust language and your overall plan.<\/p><\/div>

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Business interests<\/h3>

Ownership in a company is often controlled by an operating agreement, shareholder agreement or buy-sell terms. These documents can require specific steps before a transfer to a trust is recognized.<\/p><\/div><\/div>\n\n\n

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Accounts with payable-on-death designations<\/h3>

Bank, brokerage and investment accounts with a named payee transfer under that designation. Retitling them is a separate decision from creating the trust.<\/p><\/div>

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Annuities and other contract-based assets<\/h3>

Annuities and similar contracts pass according to the contract's terms and named beneficiaries. Reviewing those terms alongside the trust helps avoid gaps.<\/p><\/div><\/div>\n\n<\/div>\n\n\n

By Leslie V. Marenco \u00b7 Published October 29, 2026<\/p>\n\n

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Five assets usually stay out of a living trust: retirement accounts, life insurance, health savings accounts, titled vehicles and custodial accounts for minors. Each one passes under its own rules, so naming it in the trust document is often not enough. The right answer depends on the facts of each plan.<\/p>\n

Getting this wrong can leave a family with a trust that does not control the assets they expected it to control. This guide explains why each asset is usually handled outside the trust, what to review, and which law governs the rule.<\/p>\n

Why Some Assets Stay Out of a Living Trust<\/h2>\n

A revocable living trust is a trust the owner can change during life. The person who creates the trust is called the settlor. Florida law allows a trust to be created by transferring property to a trustee during the settlor’s life, or by a will or other disposition that takes effect at death, and also by the owner’s declaration that the owner holds identifiable property as trustee, or by exercising a power of appointment in favor of a trustee (Fla. Stat. \u00a7 736.0401<\/a>).<\/p>\n

Funding means getting property under the trust. There are two main routes. You can retitle property into the trust’s name, as with a home or a brokerage account. Or you can name the trust as beneficiary, which works for accounts that pass by a form on file. Retitling and naming a beneficiary are different acts.<\/p>\n

Common categories placed in a trust include real estate and taxable brokerage accounts, which are usually retitled. Some assets cannot be retitled at all. Those need to be handled through their beneficiary designation or custodian rules.<\/p>\n

Under Florida law, unless the terms of a trust expressly provide that it is irrevocable, the settlor may revoke or amend the trust, but this rule does not apply to a trust created under an instrument executed before the effective date of the Florida Trust Code (Fla. Stat. \u00a7 736.0602<\/a>). Changing a title is not the only way a trust changes. Amendments generally follow the trust’s own method, by substantial compliance with it; if the trust does not provide a method, a later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed under the trust, or any other method showing clear and convincing evidence of the settlor’s intent, may be used, and a change should be documented clearly.<\/p>\n\n

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If you're sorting through a parent's trust or your own plan, we're glad to talk through which assets belong in the trust and why. Talk it through with Trust Counsel, PL — the first consultation is free, confidential, and carries no obligation.<\/p>

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1. Retirement Accounts: IRAs, 401(k)s and 403(b)s<\/h2>\n

Retirement accounts usually stay out of a living trust because the plan or custodian owns them. They pass by beneficiary designation, not by retitling.<\/p>\n

Can a 401(k) be put in a trust? Usually the trust is named as beneficiary, not as the account owner. That designation must match the trust terms and the plan’s own form. A mismatch can send the money somewhere the owner never intended.<\/p>\n

Plan rules differ from one employer or custodian to the next. The form on file is often what the institution follows, so the trust document alone does not control the account. Tax results also depend on who inherits the account and how it passes.<\/p>\n

A common mistake is naming the trust on the form, then never checking the form again after the trust changes. Review the account statement and the designation together every time the trust is updated.<\/p>\n

The trust itself still matters. Under 26 U.S.C. \u00a7 2038<\/a>, property the decedent transferred to a trust may be included in the gross estate when the decedent held a power to alter, amend, revoke or terminate the trust at death, and also when any such power was relinquished during the 3-year period ending on the date of death. IRC \u00a7 2038<\/a> reads: “To the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money\u2019s worth), by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power (in whatever capacity exercisable) by the decedent alone or by the decedent in conjunction with any other person (without regard to when or from what source the decedent acquired such power), to alter, amend, revoke, or terminate, or where any such power is relinquished during the 3 year period ending on the date of the decedent\u2019s death.” Retirement planning and trust planning should be reviewed side by side.<\/p>\n

2. Life Insurance Policies<\/h2>\n

Life insurance usually pays by its beneficiary designation, not through the trust document. Florida law allows death benefits, including individual life insurance proceeds, to be payable to a trustee under a trust in existence at death (Fla. Stat. \u00a7 733.808<\/a>). Naming a trust is one option, and the designation must be drafted with care.<\/p>\n

A frequent mistake is assuming the trust receives a policy that names a person directly. If the policy names an individual, the proceeds generally follow that designation. The trust receives the money when the trust, or its trustee, is named as beneficiary in the policy, provided the trust agreement or declaration of trust is in existence at the time of the death of the insured; or when the trustee is named in a written instrument that is admitted to probate as the last will, since the statute allows death benefits to be made payable to the trustee named, or to be named, in that will.<\/p>\n

The statute also sets a clock. If no trustee claims the proceeds within 6 months after death, or if satisfactory evidence shows there will be no trustee to receive them, the insurer pays the personal representative of the person who made the designation. The insurer may follow a different agreement made during the owner’s life.<\/p>\n

Ownership matters for federal estate tax too. Under 26 U.S.C. \u00a7 2042<\/a>, life insurance is included in the gross estate when it is payable to the executor, or when it is payable to other beneficiaries and the decedent held incidents of ownership in the policy at death. Review who owns the policy and who is named as beneficiary together.<\/p>\n

3. Health Savings Accounts (HSAs)<\/h2>\n

A health savings account is held by a custodian, and it usually passes by beneficiary designation. Retitling it into a trust is not the usual route.<\/p>\n

Who is named on the custodian’s form matters most at death. Naming a trust, a spouse or another person can produce different results. The form should match the plan and the trust terms.<\/p>\n

Do not assume the trust controls the account simply because the trust exists. The form on file is the first document to check when the owner dies or when the owner updates the estate plan.<\/p>\n

The trust terms should also say what happens if a named person dies first or cannot serve. Federal tax rules control how the account is treated at death, and the Internal Revenue Service publishes the general rules. A review of the account and the trust together can catch gaps before they cause confusion for family members.<\/p>\n

4. Vehicles and Automobiles<\/h2>\n

A titled vehicle is usually not moved into a trust just by listing it in the trust document. The title is held in the owner’s name through the state motor vehicle agency. Retitling is a separate step from signing the trust.<\/p>\n

Vehicles often hold less value than a home or an investment account. Even so, each title should match the rest of the plan. A car that is left out of the trust may still need to be addressed in the estate plan.<\/p>\n

Check the title for the exact owner name and for any lien. A lienholder can have rights that affect a transfer. Loan paperwork and the title should be compared before any change.<\/p>\n

Do not sign a title change until you compare it with the trust terms and any loan paperwork. A quick signature on the wrong form can create a question that takes months to untangle. Keep copies of the title and the trust together in one file.<\/p>\n

5. UTMA and UGMA Custodial Accounts<\/h2>\n

A Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) account is held by a custodian for a minor. The trust usually does not control it.<\/p>\n

The custodian manages the money for the child. Custodial account terms and trust terms are separate documents, so each should be reviewed on its own terms. Retitling the account into a trust is usually not how these accounts are handled.<\/p>\n

Check that age before planning around it, because it may not match the timing in the trust.<\/p>\n

Before any change, confirm who the custodian is, how old the child is and what the account paperwork says.<\/p>\n\n

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Not sure what your next step is?<\/h3>

Talk it through with Trust Counsel, PL — the first consultation is free, confidential, and carries no obligation.<\/p>

Get a free consultation<\/a><\/div>
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Next Steps for Reviewing Your Own Trust<\/h2>\n

Start by listing each asset, its current owner and its beneficiary designation or title before you change anything. That list shows which assets the trust controls and which assets pass another way.<\/p>\n

Many people reach this question while reviewing a parent’s trust after a death, or while funding a trust they just created. A trust should be reviewed if the named successor trustee dies or becomes incapacitated.<\/p>\n

Trust Counsel, PL is located in Coral Gables, Florida. Trust Counsel’s attorneys can serve individually as trustee or personal representative. The firm advises and represents trustees, personal representatives and beneficiaries. Leslie V. Marenco is the responsible lawyer for this page.<\/p>\n

Can a 401(k) be put in a trust?<\/summary>

Usually the trust is named as beneficiary rather than as the account owner. The designation must match the plan’s form and the trust terms.<\/p><\/details>

Should life insurance be payable to a living trust?<\/summary>

It can be. Florida law allows death benefits to be payable to a trust in existence at death, and the designation should match the trust terms.<\/p><\/details>\n

The first consultation is free, confidential and carries no obligation to continue. If you’re reviewing a parent’s trust or building your own plan, call (305) 707-7126 or schedule a free first consultation<\/a>.<\/p>\n\n<\/article>\n