How To Set Up A Trust in Florida

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By Gary M. Landau, Esq.

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How To Set Up Trust in Florida | Call (954) 979-6566

When we think of trusts, we often think of extremely wealthy people who want a vehicle to fund their children’s and grandchildren’s inheritance. But there are actually many types of trusts and many reasons why people of all ages and financial means create them.

Trusts are not for everyone, but they do play a valuable estate-planning role in certain situations. Crucially, you don’t have to be a multimillionaire to benefit from a trust.

In this article, you’ll learn if trusts are right for you, how to set up a trust in Florida, the different types of trusts, and why some people find it beneficial to create a trust.

What Exactly Is a Trust?

A trust is a legal arrangement that allows a person to transfer ownership of their assets to a third party. That third-party, known as the trustee, doesn’t get to spend the money on their own lavish vacation, though. They oversee investments and spending of the trust’s assets for the benefit of the trust’s chosen beneficiary (or beneficiaries). Do note that, with some types of trust, the trustee and beneficiary are the same person, but this is not always the case.

Some trusts are irrevocable, meaning once they’re created the people who set them up cannot dissolve them. Often, though, people create what’s called revocable trusts, which can be rescinded.

Years ago in South Florida, numerous retirees were told to create a revocable living trust so their heirs could avoid the probate process after the retiree passed away. But after a great deal of time and money was spent creating these trusts, many heirs discovered they still had to put the estate through probate–the court-supervised legal procedure for distributing a person’s assets after they die.

This happened because, to be effective for this purpose, every asset the person owned before creating the trust had to be transferred into the trust (which becomes the asset owner) and every asset they bought after the trust existed needed to be purchased in the trust’s name. Many people failed to do this for some or most of their assets, so when they died with assets still in their name, a probate was still necessary.

That said, trusts can give some people control over how their money and property are distributed, both during their lifetime and after they’re gone. The person creating the trust can specify exactly how they want their assets to be handled, such as in setting up educational funds for children or providing a steady income stream for a spouse.

The Different Kinds of Trusts

When it comes to estate planning in Florida, there are several trust structures to consider:

  • Revocable Living Trust — Allows you to maintain control over the assets during your lifetime, and make changes to the trust as needed.
  • Irrevocable Trust — Cannot be altered once established, often used for tax planning or asset protection.
  • Testamentary Trust — Created through a last will and testament and takes effect only after you pass away.
  • Special Needs Trust — Designed to provide for an individual with disabilities without impacting their government benefits.
  • Pet Trust — Ensures beloved pets are cared for after you’re gone.
  • Charitable Trust — Allows you to support the causes and organizations you care about.

The specific trust that is right for you will depend on your financial situation, family structure, and specific estate planning goals. A Florida estate planning attorney can review your options and help you select the appropriate trust to meet your needs.

What Types of Assets Can You Put into a Trust?

When you set up a trust in Florida, you have the ability to transfer a wide variety of assets into the ownership of the trust. This includes:

  • Real estate (such as your primary home or investment properties)
  • Bank accounts and investment accounts
  • Stocks, bonds, and other securities
  • Business interests
  • Valuable personal property (vehicles, collectibles, etc.)

The process of officially transferring these assets into the trust is known as “funding the trust.” As mentioned above, this is an often-overlooked but crucial step. Many people make the mistake of creating a trust and forgetting to fund it, or they fund it initially but then proceed to purchase more assets in their own name.

If you’re unsure what type of assets would be best to include in your Florida trust, consult an experienced Florida trust attorney. They can review your individual situation and help you create a customized plan that aligns with your goals.

How to Set Up a Trust in Florida

Now that you understand the basics of a trust, let’s walk through the steps of how to set up a trust in Florida. Establishing a trust may seem daunting, but with the right guidance, it can be a straightforward process.

The steps involved include:

  1. Choosing the Type of Trust. Decide which trust structure best aligns with your estate planning goals, whether that’s a revocable living trust, irrevocable trust, or another option. A Florida trust attorney can provide guidance on the pros and cons of each.
  2. Selecting a Trustee. This is the person or institution responsible for managing the assets in the trust. If you are not the trustee of your own trust, it is crucial that you select someone with extreme integrity. This is the person who will oversee and invest your assets and distribute them according to the provisions of the trust.
  3. Identifying Beneficiaries. Determine who you want to receive the assets held in the trust, such as your spouse, children, other family members, a charity or whomever..
  4. Identifying Successor Trustees. If the initial trustee passes away, a successor trustee named in the document can step into their role.
  5. Creating the Trust Document. It’s crucial to work with an experienced attorney to draft the legal trust agreement that outlines the terms and conditions, as this document requires specific language in order to withstand legal scrutiny in court.
  6. Signing the Document. Once the document is finalized, you’ll need to sign it to make the trust official. This must take place in the presence of a notary and two witnesses who must also sign.
  7. Funding the Trust. The final part of the process involves formally transferring ownership of some or all of your assets (real estate, bank accounts, investments, etc.)–depending on the type and purpose of the trust–into the name of the trust.

Once a trust is created, it’s crucial that the documents be stored in a safe but accessible place. These documents are not recorded with the court. When people lose the document–as clients who come to me have done–major problems with their finances can ensue.

The key to determining whether you might benefit from setting up a trust in Florida is to work closely with a knowledgeable Florida trust attorney who will discuss the options with you, manage the process correctly, and, if appropriate, create a trust that meets your specific needs and goals.

Are You Looking to Set Up a Trust in Florida? Contact the LAW OFFICE OF GARY M. LANDAU, Serving Coral Springs, Parkland, Fort Lauderdale, Boca Raton, Pompano Beach, Deerfield Beach & All of South Florida

With more than 25 years of experience and countless satisfied clients, Gary M. Landau and his team are uniquely positioned to help you with your estate planning or real estate needs in South Florida. Whether you’re ready to probate a loved one’s estate or to write your own will, or if you are purchasing a home, have inherited a home, or want a closing agent to handle title insurance and all documents for your closing or refinancing, the LAW OFFICE OF GARY M. LANDAU, P.A. is ready to work with you.

Call our office at (954) 979-6566 or complete our online form today to schedule a free consultation. We work with our clients in person, over the phone, or on Zoom.

Copyright © 2024. LAW OFFICE OF GARY M. LANDAU, P.A. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction.

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Frequently Asked Questions

A will is the simplest way to ensure that your funds, property and personal things will be distributed after your death the way you want them to. Even if you have very few assets, you will benefit from having a will. About half of all Americans die without a will (known in legal terminology as dying intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to state law. A will ensures that your assets will be given to family members or other beneficiaries you designate.

 

Having a will is doubly important if you have young children. One section of the will allows you to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children, who may not be the person you desire.

Many Florida residents have out-of-state wills, drawn up while they were still living among the hills of North Carolina or the hubbub of New York. If the will was valid according to your old state’s laws at the time you made it, it is still legal in Florida. However, if you are a Florida resident, you may benefit greatly by having a new will drawn up in Florida, because it will likely be more easily admitted to probate.

 

It is important to know that each state has its own requirements for what makes a will a legally binding document. For example, Florida doesn’t recognize handwritten wills that haven’t been witnessed (known as “holographic wills”), or oral wills not put into writing, even if other states okay them. There’s also the matter of Florida estate law. In this state, for example, your surviving spouse is entitled to 30 percent of your net probate estate, regardless of what you say in your will. The spouse may also have a “Homestead” interest in property you share here, even if you want your house to go to someone else. In fact, all real property owned in Florida will be subject to this state’s laws, even if you’re a snowbird maintaining a residence in the state where your will was drawn up. Other peculiarities also exist, which is why a Florida will could make things much easier for your heirs.

 

If you would like to have me review your current out-of-state will, I am happy to do so without charge. If it turns out to be in accordance with Florida state laws and procedures, you can continue to rely on it. If not, however, your heirs would rather you discover that now.

It is a good idea to re-read your will every few years to be sure it reflects up-to-date realities (you may not want to leave your heirloom to a niece you are no longer speaking to, nor have someone be named your child’s guardian if they have taken seriously ill since you drafted your will). It is especially important to reexamine your will if:

 

  • You have gotten married since it was last drafted;
  • You have made bequests to people who have fallen out of your favor or are no longer living (I recently updated the will of a man who had left everything to his first wife, who was long deceased), or you have not included people who are now dear to you;
  • You would like to change the person named as the personal representative of the estate. (Note: Florida law does not allow a nonresident of the state to serve in this position, unless it is an immediate family member or certain other relatives);
  • You have acquired pricey or sentimental items that are not accounted for in your will. Do note, though, that Florida law allows you to attach a separate personal property memorandum to your will, detailing who will get which specific items. This list can be changed whenever you want.

Perhaps I should answer this question with where not to store it: in a bank’s safety deposit box. Although it may seem logical to put this with your other important papers, it is often difficult for your heirs to gain access to the box once you die, since the box is sealed then and must be opened in the presence of a bank employee.

 

One good option is to leave your original will with the attorney who drafted it, making copies for your personal representative and other important relatives and letting them know who has the original. For my clients who prefer that I store their original will, I keep it in a fireproof will vault in my office, or in the vault in my bank.

 

As an alternative, you could store the will in a fireproof box or vault in your own home.

 

Wherever you store it, be sure to let your personal representative and other close relatives know where you have put it!

Probate is when the court oversees your assets and liabilities after your death. During probate, the court makes sure that your will is valid and acceptable; that all debts, bills, creditor’s claims, and taxes are paid from your estate’s assets; and that your remaining assets are distributed to your beneficiaries according to your will (or, if no will exists, by Florida law).

 

Probate usually does take longer than most beneficiaries would like. But in order to ensure that everyone with a right to a claim is included in the process, the court requires several steps. If the size and complexity of your estate are minimal, however, the entire process of probate can take as little as a few months. Larger estates that are subject to IRS estate taxes or those involving litigation on the part of creditors or heirs generally take longer, often one or more years.

 

To speed the process along for simple and small estates, the courts allow a shortened form of probate, known as “summary administration,” which requires much less paperwork and time.

A personal representative (PR) is a friend or relative, or an attorney or bank, who is put in charge of the estate until all matters regarding the probate are resolved. (In other states, this person is sometimes called an executor or administrator.) The job of the PR includes identifying all assets, searching for creditors and paying valid claims, filing required estate tax returns if the estate is large enough (the figure escalates over time, according to Congressional laws), coordinating with the probate court and attorneys, and overseeing the distribution of assets–all done under the guidance and assistance of a qualified attorney.

 

Serving as a PR is an important role, and such a person should be selected with care as to who is most willing and best able to serve in this position. By Florida law, your personal representative must be over 18 years of age, and be a blood relative, your spouse, the parent or child of your spouse, or a Florida resident.

Generally, no. If you co-own all property via such legal structures as “tenancy by the entirety” or by “joint tenancy with right of survivorship” the property immediately passed to you upon your spouse’s death. Proof of death is usually all that is needed to pass such jointly owned title for cars, stocks, and other personal property to the surviving spouse.

 

But if even one asset was held solely in the deceased person’s name, or any property is owned in the form of a “tenancy in common,” that estate will be required to go through probate. If the assets are limited, the shorter, simpler form of probate is generally all that is required.
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