Setting up a trust fund in Florida takes three things done in order: draft a document that meets the requirements of Chapter 736 of the Florida Statutes, sign it with the right formalities, and retitle your assets into the trust’s name. Skip the last step and the trust does nothing. Done properly, the trust keeps your estate out of probate, keeps your affairs private, and lets a successor trustee take over immediately if you become incapacitated.
Decide What Kind of Trust You Need
For most Florida estate planning, the working tool is a revocable living trust. You can change it, add or remove assets, swap beneficiaries, or dissolve it entirely at any point while you are alive and competent.1Online Sunshine. Florida Statutes 736.0602 – Revocation or Amendment of Revocable Trust Assets in a revocable trust bypass probate, so beneficiaries can receive them quickly after your death and the details stay private. You typically serve as your own initial trustee, keeping full control during your lifetime, and name a successor to take over later.
An irrevocable trust generally cannot be changed or canceled once established. The tradeoff for that loss of control is stronger protection: assets in an irrevocable trust may be shielded from creditors and may reduce your taxable estate. That structure is most useful for people with substantial wealth or specific asset-protection goals.
One point that catches people off guard: a revocable trust offers no creditor protection during your lifetime. Florida law explicitly makes revocable trust property available to your creditors to the same extent it would be if you owned those assets directly.2Florida Senate. Florida Statutes 736.0505 – Creditors Claims Against Revocable Trust If shielding assets from lawsuits is the goal, you need an irrevocable trust or a different strategy. For married couples, holding property as tenancy by the entireties often offers stronger protection than a revocable trust.
A testamentary trust, which is created inside your will and only comes into existence after you die, does not avoid probate. If probate avoidance is one of your reasons for setting up a trust, a living trust is the right instrument.
Draft the Trust Document
Florida does not require an attorney to draft a trust, but the validity requirements are specific. Under the Florida Trust Code, a trust is only valid if the grantor has legal capacity, clearly intends to create the trust, identifies at least one definite beneficiary, and gives the trustee actual duties to perform.3Florida Senate. Florida Statutes 736.0402 – Requirements for Creation The trust’s purposes must also be lawful and possible to achieve.4Florida Senate. Florida Statutes Chapter 736 – Florida Trust Code
Before drafting, gather full legal names and addresses for every trustee and beneficiary, legal descriptions from the deed for any real estate you plan to transfer, and account information for your bank and investment accounts. A thorough asset inventory is what keeps things from slipping through the cracks during funding.
At minimum, the document itself should cover:
- Who the beneficiaries are and what each of them receives
- Who serves as trustee, and who serves as successor trustee
- What powers the trustee has
- How distributions work during your life and after your death
- What happens if a beneficiary dies before receiving their share
- How the trust can be amended or revoked
Every Florida trust has three roles. The grantor (sometimes called the settlor) creates the trust, contributes the assets, and sets the terms. The trustee holds legal title and must administer the trust solely in the interests of the beneficiaries; any transaction where the trustee’s personal interests conflict with that duty can be voided by an affected beneficiary.5Florida Senate. Florida Statutes 736.0802 – Duty of Loyalty The beneficiary receives the assets or their benefits. A trust can have multiple beneficiaries receiving distributions at different times or under different conditions.
Sign the Trust Correctly
Getting the trust signed correctly matters more than most people realize. For a revocable trust in Florida, the portions that control what happens to trust property after the grantor’s death must be executed with the same formalities as a will.6Online Sunshine. Florida Statutes 736.0403 – Formalities Required for Revocable Trusts The grantor signs in the presence of two witnesses, and both witnesses sign in the presence of the grantor and each other.
Notarization is not legally required for the trust to be valid, but it is strongly recommended. If the trust will hold real estate, a notarized trust avoids complications when recording deeds or obtaining title insurance, because title companies regularly ask for proof that the trust was properly executed.7RPPTL Section. Revocable Trust Execution Requirements – A Notary Is Not Needed
Fund the Trust
This is the step that actually makes the trust work, and the step where people most often fall short. A signed trust document with nothing in it is just paper. Until you transfer ownership of your assets into the trust, those assets are still in your name individually, and they will go through probate when you die.
Real Estate
Transferring real property requires a new deed naming the trust as the owner. The deed must be signed before a notary and two witnesses, then recorded with the clerk of court in the county where the property sits. It should reference the trust by its full name, the date the trust was created, and the trustee’s name.
If the property is your primary residence, pay attention to your homestead exemption. Florida allows you to keep it when property is held in a trust, but the deed must make clear that you retain beneficial interest and the right to live in the property during your lifetime. Many attorneys include specific language reserving the grantor’s possessory rights for this reason. Without it, the property appraiser’s office may require a review of the trust document itself before continuing the exemption.
Bank and Investment Accounts
For bank accounts, contact the bank and ask to retitle the account in the name of your trust. Most institutions have their own forms. Brokerage and investment accounts work similarly but often require transfer paperwork specific to the firm.
Retirement accounts like IRAs and 401(k)s generally should not be retitled into the trust; doing so can trigger an immediate taxable distribution. Instead, name the trust as the beneficiary of those accounts.
Insurance, Vehicles, and Other Property
Life insurance policies and annuities are typically handled by changing the beneficiary designation rather than transferring ownership. For vehicles, Florida allows you to retitle a car in the trust’s name through the DMV, though some owners skip this for cars they plan to replace. Business interests, valuable personal property, and intellectual property can be assigned to the trust through written instruments.
Add a Pour-Over Will as Backup
Even with careful funding, it is common for an asset to end up outside the trust at death, such as a bank account you opened later or property you inherited shortly before passing. A pour-over will catches those stray assets and directs them into the trust after they pass through probate.8Online Sunshine. Florida Statutes 732.513 – Devises to Trustee Anything caught by the pour-over will still has to go through probate first, so treat it as a safety net rather than a primary strategy. The goal is thorough funding during your lifetime.
Name a Successor Trustee
Naming a successor trustee is one of the most practical reasons to set up a revocable living trust. If you become incapacitated, your successor steps in and manages the trust assets without needing court approval. Without a trust, someone would have to petition a court for guardianship over your property, a process that is expensive, slow, and public.
If the document does not name a successor, or the named person cannot serve, Florida law fills the vacancy in a specific order: first by anyone designated in the trust terms, then by unanimous agreement of the qualified beneficiaries, and finally by court appointment.9Online Sunshine. Florida Statutes 736.0704 – Vacancy in Trusteeship; Appointment of Successor Falling back on court appointment defeats much of the point of having a trust, so name at least one successor in the document, and consider a second backup.
Choose someone both trustworthy and capable of handling financial matters. Many people name an adult child, a sibling, or a close friend. A professional or corporate trustee can be a better fit for a large trust or a complicated family. Co-trustees are allowed, though requiring multiple people to sign off on every decision slows administration down.
What It Costs
Professional legal fees to draft a standard revocable living trust in Florida typically run between $1,500 and $5,000, depending on complexity and the attorney’s rates. Recording a new deed with the county clerk adds a smaller administrative cost, usually under $50.
If the trust document does not set the trustee’s pay, Florida law entitles the trustee to compensation that is reasonable under the circumstances.10Online Sunshine. Florida Statutes 736.0708 – Compensation of Trustee Corporate trustees such as bank trust departments generally charge an annual fee ranging from 1% to 2% of trust assets. Family members serving as trustee sometimes waive compensation, but they are legally entitled to it if they choose to collect.
Taxes After the Trust Is Set Up
Florida has no state income tax, which simplifies things. Federal tax obligations still apply.
While the grantor is alive and the trust is revocable, the IRS treats it as a grantor trust. You report all trust income on your personal return using your Social Security number. The trust does not file its own return or need a separate tax identification number during this period.
Once the grantor dies, a revocable trust becomes irrevocable and needs its own Employer Identification Number from the IRS. The trustee must file Form 1041, the federal income tax return for trusts, if the trust has gross income of $600 or more, any amount of taxable income, or a beneficiary who is a nonresident alien.11IRS. Instructions for Form 1041 The EIN application can be completed online in minutes through the IRS website.
Changing or Revoking the Trust Later
If your trust is revocable, you can change it any time you have the mental capacity to do so. Florida law gives you two paths: follow whatever amendment procedure the trust document itself specifies, or, if the document is silent, use any method that shows by clear and convincing evidence your intent to make the change.1Online Sunshine. Florida Statutes 736.0602 – Revocation or Amendment of Revocable Trust Most trust documents require amendments in writing, signed with the same formalities as the original.
To revoke the trust entirely, sign a written revocation and retitle the assets back into your individual name. If you created the trust with your spouse, each of you can generally revoke or amend only the portion funded by your own contributions, unless the trust says otherwise. An agent acting under a power of attorney can amend or revoke the trust only if the power of attorney specifically authorizes it.