What Goes Into Setting Up A Living Trust In Florida?

Planning for how to divide your assets is one of the best gifts you can give your family while you are alive. This allows them to focus on grieving when you’re gone and less on legal issues. In most instances, our death and what happens to our belongings after our passing is not a pressing priority until it becomes a near reality. However, it’s always a good idea to be prepared for the inevitable. Setting up a living trust is one of the best ways to cover your bases and make sure your family is taken care of according to your wishes.

Setting up a living trust in Florida will have its own requirements and processes that may differ from other states. That’s why an experienced attorney can be a valuable asset in the process to help you navigate the steps needed to set it up. With this in mind, it’s also useful to have a base knowledge of what is required so you can approach the process with confidence.

This guide walks you through everything you need to know about trusts in Florida, from understanding the basics of what a trust is and the different types available, to the legal requirements for creating a valid trust and the step-by-step process for setting up your own living trust.

What Is a Trust?

A trust is a legal document that allows a property owner to make transfers of said property. When you create a valid trust, you also arrange to have the property managed on behalf of someone else by appointing a trustee. The trustee is the person or entity responsible for holding and managing the property according to the terms laid out in the trust document.

In essence, a trust creates a legal relationship between three parties: the person who creates the trust (known as the settlor or grantor), the trustee who manages the property, and the beneficiaries who ultimately receive the benefits of the trust. Understanding this structure is important because it forms the foundation of how trusts work in Florida and why they are such a valuable estate planning tool.

There are two main types of trusts available:

• Living Trusts — created while you are alive and take effect immediately
• Testamentary Trusts — found in a will and only come into existence after you pass away

Understanding the different types of trusts available is an important first step in the estate planning process. Each type serves a different purpose, and choosing the right one depends on your individual circumstances and goals.

What Is a Living Trust?

A living trust is created while someone is alive. Also known as a revocable trust, it holds the assets of an individual for their personal benefit during their lifetime. A living trust is an option in the estate planning process that provides both control during your lifetime and a clear plan for what happens to your assets after you pass.

When you create this trust, your assets are placed into the trust so they are titled in the name of the Trustee(s) of the Trust. At that time, you may appoint yourself as the trustee who must administer the trust in accordance with the terms of the trust and make distributions to the trust beneficiaries noted in your written trust upon your death. Because it is revocable, you retain full control over the trust and can modify or revoke it at any time during your lifetime.

You also will appoint a successor trustee, who will administer the trust when you die. This person is responsible for whether your assets are managed and distributed as you want upon your death. Once you pass, the assets are distributed to predetermined beneficiaries under the supervision of the successor trustee, without the necessity of going through the time and expense of the probate process.

The key advantage of a living trust over other estate planning instruments is that it allows your assets to transfer directly to your beneficiaries without the court involvement that comes with probate. This saves time, money, and keeps your estate matters private.

For a deeper look at how revocable trusts work, read our guide on what is a revocable trust.

What Is a Testamentary Trust?

A testamentary trust is one that is included in your will and only comes into existence after you pass away. Unlike a living trust, which takes effect during your lifetime, a testamentary trust does not provide any benefits while you are alive. It is activated only when the will goes through probate and the court validates it.

Because a testamentary trust is contained within your will, the will itself must still go through the probate process. This means a testamentary trust does not help you avoid probate the way a living trust does. However, a testamentary trust can still be useful in certain situations, such as providing structured distributions to minor children or other beneficiaries who may benefit from having their inheritance managed by a trustee over time rather than receiving it all at once.

Trust law can be complex, so hiring an experienced trust lawyer helps you ensure that your trust is created properly during the estate planning legal process. An attorney can help you determine which type of trust best fits your circumstances and make sure the legal requirements are met.

If you are weighing your options between a trust and a will, our article on a trust vs. a will covers the key differences between these two estate planning tools.

The Value of a Living Trust

A living trust is an important option in the estate planning process. For many Florida residents, the benefits of a living trust make it a cornerstone of a well-thought-out estate plan. There are several benefits to having a living trust:

It Avoids Probate

Probate is a lengthy and costly process. When you have a living trust in place, your assets pass directly to your beneficiaries without going through probate court. This means your loved ones do not have to wait months or even years for the probate process to conclude before they can access the assets you’ve left for them. Avoiding probate also means avoiding the court fees, attorney costs, and administrative expenses that come with it.

Money Can Be Saved in the Long Run

By avoiding probate, you save on the court costs, attorney fees, and administrative expenses that come with the probate process. While setting up a living trust does involve upfront costs, the savings realized by bypassing probate often make it a more cost-effective choice over the long term, especially for estates of any significant size.

Privacy Is Protected

A living trust works as a private document that does not become part of public records. Unlike a will, which becomes public during probate, the details of your trust and your assets remain confidential. This means that the public cannot look up what assets you owned, who your beneficiaries are, or how your estate was distributed. For many families, this privacy is an important consideration.

Assistance in the Event of Incapacitation

The successor trustee can assist in the event of incapacitation without involving the court. If you become unable to manage your own affairs due to illness, injury, or cognitive decline, your successor trustee can step in and manage your assets on your behalf. This provides continuity and protection without the need for a court-appointed guardian, which is a separate legal process that can be time-consuming and expensive.

Peace of Mind

The detailed plan that makes up the living trust offers certainty and peace of mind. Knowing that your wishes will be carried out as you intended, that your family will be provided for, and that the process will be as smooth as possible gives you and your loved ones confidence in the future.

If you want to learn more about how a living trust fits into broader estate planning, our guide to living trusts provides additional detail. You can also explore what probate is and how to avoid it to understand why so many Florida residents choose a living trust as part of their estate plan.

Requirements for a Valid Creation of a Trust in Florida

Before you begin the process of setting up a living trust, it is important to understand the legal requirements for creating a valid trust. Florida law establishes specific conditions that must be met for a trust to be legally enforceable. The requirements for a valid creation of a trust include:

• A creator (the settlor) who is 18 years or older — The person creating the trust must be a legal adult. The settlor must deliver a legal title to the property to the Trustee.
• Property is delivered to the trustee — The trustee, who is named in the legal document, must actually receive the property that is being placed into the trust. Without this transfer, the trust has no assets to manage.
• The trustee holds legal title to the property — The trustee holds legal title for the trust beneficiaries, who are also named in the trust document. This means the trustee has the legal authority and responsibility to manage the property according to the terms of the trust.
• There is an intent to create a trust for a lawful purpose — The trust must be established with a clear intention and must serve a purpose that is legal under Florida and federal law.
• The document must be properly executed — The trust document must be properly executed as required by state statutes. This includes following the correct procedures for signing, witnessing, and notarizing the document as Florida law requires.

These requirements are governed by Florida law, and failing to meet any one of them can result in an invalid trust. If a trust is determined to be invalid, the assets that were intended to be held in trust may instead become subject to probate or be distributed according to Florida’s intestacy laws rather than your wishes. This is why working with an experienced trust attorney is so important to make sure every legal requirement is satisfied.

Steps Involved in Setting Up a Living Trust in Florida

If you’ve made the decision to set up a living trust in Florida, you’ll need to familiarize yourself with the steps needed. These steps are affected by Florida’s inheritance and probate laws. If you live in Florida and want to set up a living trust, there are seven key steps to take into consideration:

1. Decide on an Individual Trust vs. Shared Trust

The difference between the two will depend on whether or not your assets are co-owned. If you’re the sole owner of your assets, you’ll probably opt for an individual trust. If you have a spouse with whom you have joint property, then a shared trust is more appropriate. This is an important first decision because it determines the structure of your trust document and how your assets will be managed and distributed.

2. Determine Which Property You’d Like to Include

Take inventory of your property and decide what you would like to include in your living trust. Assets to consider include real estate, cars, savings accounts, stocks, and even family heirlooms. Some people also choose to include their retirement account, too. The more thorough you are in identifying the assets you want to include, the more comprehensive your trust will be.

3. Choose a Successor Trustee

The successor trustee will take charge of the trust assets after your passing, or in the case of incapacitation. It is the responsibility of the successor trustee to distribute your assets according to your instructions. This person is responsible for whether your assets are managed and distributed as you want upon your death, so this decision should be made carefully. You want someone who is trustworthy, organized, and willing to take on the responsibility.

For tips on making this decision, see our article on choosing the right trustee for your estate.

4. Decide on the Beneficiaries

This may seem like an obvious inclusion for your living trust, but it still needs to be considered seriously. Consider the people that depend on you financially, as well as how soon they will need the funds. Your trust beneficiaries will be named in your written trust document, and the trust will specify how and when they receive their distributions. Taking the time to think through your beneficiary designations carefully helps prevent confusion or disputes later.

5. Draft the Trust Document

There are a couple of options available to create the trust document, including an online program or the help of a legal professional. However, because the document must be properly executed as required by state statutes and meet all the legal requirements for a valid trust, working with an attorney is the most reliable path. An attorney can ensure that every element required for a valid trust creation is included and that the document accurately reflects your wishes.

6. Finalize the Living Trust

Hiring the services of an experienced lawyer is a smart choice to help you navigate the legal requirements and make sure you’ve ticked all of the necessary boxes. This includes signing the trust document in front of a notary public, which is required for proper execution under Florida law. This step makes the trust legally binding and enforceable, so it must be done correctly.

7. Fund Your Trust

The final step is to make sure that all of your preparation, in theory, becomes a reality once you pass on. This is done by transferring your property into the trust with the help of an attorney. Your assets must be placed into the trust so they are titled in the name of the Trustee(s) of the Trust. Until property is actually transferred into the trust, the trust does not control those assets. This step is critical because an unfunded trust, no matter how well drafted, cannot protect or distribute assets that were never placed into it.

Why You Also Need a Pour-Over Will

A living trust helps avoid probate, but you will also need a pour-over will. A pour-over will ensures that any of your assets that weren’t placed into your trust during your lifetime for any reason will “pour over” into the trust instead of becoming part of an intestate estate, which would then need to be distributed according to state law instead of the way you set forth in your trust.

Without a pour-over will, any assets left outside of the trust at the time of your death could be subject to probate and distributed under Florida’s intestacy laws rather than according to your wishes. This is an important safeguard that ensures your entire estate is handled the way you planned, even if you forgot to transfer a particular asset into the trust or acquired new property after the trust was created.

A pour-over will works hand in hand with your living trust to provide a comprehensive estate plan. While the living trust handles the assets you’ve already placed into it, the pour-over will acts as a safety net for everything else. Together, they give you the most complete protection available for your estate.

To learn more about why wills and trusts work together as part of a complete estate plan, read our article on why wills and trusts are important to have.

Legal Expertise to Help Set Up a Living Trust in Florida

A legal expert will ensure that your living trust is executed in the way that you planned. At the Law Offices of Gary I. Handin, P.A., we have more than 50 years of experience assisting Florida citizens with their legal requirements. Our experienced legal team has a deep understanding of trust law and all of the requirements for creating a valid will or trust in Florida.

We help individuals throughout Broward, Miami-Dade, and Palm Beach counties navigate the legal process and make informed decisions on how to plan to distribute their estate. Whether you need help understanding the difference between a living trust and a testamentary trust, meeting the legal requirements for a valid trust, or completing all seven steps of the trust creation process, our team is here to guide you through every stage.

Remember that it’s never too early or late to consider estate planning. We can help you navigate the legal process and make the important decisions involved in planning to distribute your estate. To learn more about our wills and trusts legal services, contact the Law Offices of Gary I. Handin, P.A. at 954-796-9600.