Trusts Attorneys in Florida

What is a Trust?

A trust allows an individual, known as the grantor, to transfer assets to a trustee for the benefit of a third party, the beneficiary. Trusts help manage assets, avoid probate, reduce taxes, and provide detailed instructions on how and when to distribute property. Florida law recognizes several types of trusts, each designed to meet different goals and needs. Below, we explore the most common types of trusts in Florida.

Types of Trusts in Florida

Revocable Trust or Living Trust 

A revocable trust, also known as a living trust, allows the grantor to maintain control over the trust’s assets during their lifetime. The grantor can modify or revoke the trust at any time, making it a flexible estate planning tool. Upon the grantor’s death, the assets in the trust are distributed according to the terms of the trust, bypassing probate and providing privacy.

Source: Florida’s Trust Code Fla. Stat. § 736.0602

Irrevocable Trust

An irrevocable trust is one that, once established, cannot be altered or revoked by the grantor. It is often used for tax planning, asset protection, or charitable giving. By transferring assets into an irrevocable trust, the grantor removes themselves from their estate, which can help reduce estate taxes and protect the assets from creditors. Florida law provides that once the grantor creates an irrevocable trust, the terms cannot be modified without the consent of the beneficiaries or by court order under certain conditions.

Source: Fla. Stat. § 736.04113 (2024)

Testamentary Trust

A testamentary trust is created through a will and does not take effect until after the grantor’s death. It is often used to manage assets for minor children, dependents, or beneficiaries who may not be capable of managing large inheritances on their own. Testamentary trusts are subject to probate, as they are part of the grantor’s will, and they become irrevocable once the grantor passes away. The creation and administration of testamentary trusts are governed by both the Florida Probate Code and the Florida Trust Code.

Source: Fla. Stat. § 733.707(3)

Special Needs Trust

A special needs trust is designed to benefit individuals with disabilities without jeopardizing their eligibility for government assistance programs, such as Medicaid or Supplemental Security Income. The trustee manages and distributes the assets in a way that supplements but does not replace government benefits. This type of trust must comply with specific legal requirements, such as those outlined in the Social Security Act and Florida law.

Source: 42 U.S.C. Sec. Sec. 1396p (d)(4)(a)

Charitable Trust

A charitable trust is established to benefit a charitable organization or purpose. These trusts can offer significant tax advantages to the grantor, such as deductions on income taxes and estate taxes. Charitable trusts can take different forms, including charitable remainder trusts and charitable lead trusts, depending on the structure and timing of the charitable gifts. Florida law provides the legal framework for charitable trusts, and they are also regulated under the Internal Revenue Code.

Source: 26 U.S.C. § 664 (2024

Spendthrift Trust

A spendthrift trust under Florida law is a type of trust that helps protect trust assets from the beneficiary’s creditors and prevents the beneficiary from quickly spending the money. It includes special rules that limit the beneficiary’s ability to sell or give away their interest in the trust. This means that the trustee manages the assets and distributes them only according to the trust’s terms, providing financial security for beneficiaries who may not be responsible with money. This setup helps ensure that the assets are used wisely and are protected from claims by creditors.

Source: Fla. Stat. § 736.0502 (2024)

Wealth Preservation & Protection in Florida

Florida offers various strategies to help residents safeguard their assets. With its favorable tax climate, homestead protections, and robust legal frameworks, Florida provides numerous opportunities to protect wealth from creditors, lawsuits, and other financial risks.

Homestead Exemption

Florida’s homestead exemption provides robust protections for primary residences. Under the Florida Constitution, a homestead is protected from forced sale by creditors, making it a critical component of wealth preservation. The exemption applies to a primary residence up to a certain value and protects homeowners from financial hardships.

Source: Fla. Const. Art. X, § 

Protect Business Liabilities 

Creating limited liability companies (LLCs) or limited partnerships can help shield personal assets from business liabilities. In Florida, forming an LLC provides liability protection to its members, meaning that personal assets are generally protected from claims against the business.

Source: Fla. Stat. § 605.0304 (2024)

Retirement Accounts

Utilizing retirement accounts such as IRAs and 401(k)s can offer tax advantages while providing a layer of protection from creditors. In Florida, certain retirement accounts are protected from bankruptcy creditors, making them a safe place to grow wealth for the future.

Source: Fla. Stat. § 222.21 (2024)

Contact Our Experienced Attorneys Today

Florida offers diverse solutions for estate planning, asset protection, and charitable giving. Each type of trust serves a unique purpose and is governed by specific laws and regulations.

Contact a Romano Law attorney today to determine which type of trust best suits your financial and personal goals to ensure compliance with Florida law and protect your legacy for future generations.

Regardless, it is important to consult with an experienced attorney to ensure the best result for your case.

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