How to Set Up a Trust in Florida: Types, Funding, and Taxes

To set up a trust in Florida, you choose the type of trust that fits your goals, draft a written trust document that meets the requirements of Chapter 736 of the Florida Statutes, sign it with the same formalities as a will, and then retitle your assets into the name of the trust. The last step is the one most people skip, and it is the one that decides whether the trust actually works. A signed document with no assets inside it accomplishes nothing.

Here is what each step involves.

Choose the Type of Trust

The trust type shapes every decision that follows, from how you sign the document to how creditors and the IRS treat the assets.

Revocable Living Trust

A revocable trust is the most common estate planning trust in Florida. You keep full control: you can change the terms, swap beneficiaries, add or remove assets, or dissolve the trust at any point during your lifetime.¹ Most people name themselves as the initial trustee, so daily life does not change after signing. Assets inside the trust skip probate at death and pass directly to your beneficiaries under the trust’s terms.

The trade-off is no creditor protection during your lifetime. Because you can pull assets back out, Florida law treats those assets as still belonging to you for creditor purposes.²

Irrevocable Trust

An irrevocable trust is harder to undo. Once you transfer assets in, you give up ownership and control. That is the point: because the assets no longer belong to you, they are generally shielded from your personal creditors. These trusts are used for advanced goals like lawsuit protection, estate tax reduction, or providing for a special-needs family member without disrupting government benefits. Under Florida law, your creditors can reach only the maximum amount that can still be distributed back to you, so a trust that forbids distributions to the settlor gives creditors little to grab.²

Testamentary Trust

A testamentary trust is created through your will and does not exist during your lifetime. Because it is part of a will, the assets must pass through probate before the trust is funded. These trusts are always irrevocable, since the creator is no longer alive. A testamentary trust can make sense for leaving assets to minor children or someone who should not receive a lump sum, but it does not give you the probate-avoidance benefit of a living trust.

Meet Florida’s Validity Requirements

Florida law requires every trust to satisfy several conditions. Miss one and the trust may be unenforceable.³

You must have legal capacity: at least 18 and mentally competent.
You must show intent to create a trust, not just a wish to help someone.
The trust must hold identifiable property that you actually transfer in.
There must be at least one ascertainable beneficiary, unless the trust is charitable or serves another permitted purpose.
A trustee must be named.
The same person cannot be both the sole trustee and the sole beneficiary.

That last rule surprises single people who want a trust for their own benefit. To satisfy it, you will need either a co-trustee or at least one additional beneficiary, such as a remainder beneficiary who inherits after your death.

Three roles run through every trust. The settlor creates the trust, sets its terms, and funds it. The trustee holds and manages the assets as a fiduciary, administering the trust in good faith and in the beneficiaries’ interests.⁴ Florida allows any person to serve as trustee regardless of where they live, along with corporate fiduciaries like bank trust departments. The beneficiaries receive the benefits. Always name a successor trustee to step in if you become incapacitated or die.

Draft and Sign the Trust Document

The trust document spells out who gets what, when they get it, what powers the trustee has, and what happens if circumstances change. Legal fees for a standard revocable living trust in Florida generally range from several hundred to several thousand dollars depending on complexity.

Signing correctly is where a well-drafted trust either takes effect or falls apart. If your revocable trust has provisions that distribute property at death, and nearly all do, Florida requires you to sign it with the same formalities as a will.⁵ That means:

You sign at the end of the document, or someone signs your name in your presence and at your direction.
Two attesting witnesses watch you sign or hear you acknowledge your signature, then sign the document themselves in your presence and in each other’s presence.⁶
Notarization is not strictly required by the trust statute, but it is standard practice and effectively mandatory if the trust will hold real estate.

The trust document does not get filed with any court or government agency. It stays private. The only time part of a trust becomes public is when real estate is involved, and even then you typically record only the deed and possibly a short certification of trust, not the full document.

Fund the Trust

This is where most trust plans fail. People pay to have a beautiful document drafted, then never move their assets into it. Until assets are retitled in the trust’s name, they still go through probate.

Real Estate

Transferring Florida real estate into a trust requires a new deed, typically a quitclaim or special warranty deed, conveying the property from you individually to yourself as trustee of the trust. Any deed transferring an interest in real property must be signed in the presence of two subscribing witnesses.⁷ The deed must also be notarized and recorded with the county clerk’s office where the property sits. Recording fees vary by county.

Florida’s documentary stamp tax applies to deeds, and there is no specific exemption for estate planning transfers. The Florida Department of Revenue lists a trustee’s deed as a document subject to the tax.⁸ When no money changes hands, as in a transfer from yourself to your own revocable trust, the tax is typically minimal. Confirm the amount with the county recording office or your attorney before filing.

Homestead Property

Transferring your primary residence into a trust requires care to preserve the homestead property tax exemption. Florida allows homesteaded property to stay exempt when held in trust, but only if you retain a beneficial interest in the property for life, keep the right to live there, and record the deed. The safest approach is to include specific language in the deed that reserves your right to reside on the property as your permanent home during your lifetime and confirms that you retain equitable title. Without that language, the county property appraiser may need to review the entire trust document to verify eligibility, which delays the process and defeats the privacy advantage of using a trust.

Financial Accounts and Other Assets

For bank and investment accounts, contact each institution and ask to retitle the account in the name of the trust. Most banks have their own forms. The title changes from something like “Jane Smith” to “Jane Smith, Trustee of the Jane Smith Revocable Trust dated [date].” Life insurance policies and retirement accounts are handled differently: you generally name the trust as a beneficiary rather than retitling the account itself. Retirement account beneficiary designations have significant tax consequences and warrant professional advice before you change them.

Add a Pour-Over Will

Even with a funded trust, you should have a pour-over will. You might buy a new car, open a new account, or receive an inheritance without remembering to retitle it. A pour-over will directs that any assets still in your individual name at death be transferred into your trust. Florida law permits a valid devise to the trustee of a trust that exists when the will is made, and the devise remains valid even if the trust is later amended.⁹ Assets passing through a pour-over will still go through probate first, so the will is a backup, not a substitute for properly funding the trust.

Handle Taxes and the EIN

During your lifetime, a revocable trust is invisible for federal income tax purposes. The IRS treats it as an extension of you. You report all trust income on your personal return using your Social Security number, and the trust does not need its own Employer Identification Number.

That changes when you die. The revocable trust becomes irrevocable, and the successor trustee must apply for a new EIN from the IRS. Going forward the trust files its own income tax return on Form 1041 and reports income, deductions, and distributions to beneficiaries on Schedule K-1. Successor trustees who are not familiar with trust administration often overlook this step.

Follow Through on Trustee Duties

Creating and funding the trust is not the end. The trustee has continuing legal obligations, especially once the trust becomes irrevocable.

Within 60 days of accepting a trusteeship, the trustee must notify all qualified beneficiaries and provide the trustee’s full name and address.¹⁰ When a revocable trust becomes irrevocable, usually at the settlor’s death, the trustee has another 60-day window to notify qualified beneficiaries of the trust’s existence, the settlor’s identity, and the beneficiaries’ right to request a copy of the trust document and receive accountings.

The trustee of an irrevocable trust must also provide a formal accounting to each qualified beneficiary at least once a year. That accounting must cover all cash and property transactions during the period, gains or losses, compensation paid to the trustee and third parties, and the value of trust assets at the end of the period.¹⁰

While the trust is still revocable, you can change it. Florida law allows amendments through whatever method the trust document specifies. If the document is silent, you can amend or revoke through a later will or codicil that expressly refers to the trust, or by any other method that shows clear and convincing evidence of your intent.¹ Put every amendment in writing and sign it with the same formalities as the original trust to avoid disputes later.

1
Florida Senate. Florida Code 736.0602 – Revocation or Amendment of Revocable Trust
2
Justia Law. Florida Code 736.0505 – Creditors Claims Against Settlor
3
FindLaw. Florida Code 736.0402 – Requirements for Creation
4
Justia Law. Florida Code 736.0801 – Duty to Administer Trust
5
FindLaw. Florida Code 736.0403 – Trust Provisions
6
Florida Senate. Florida Code 732.502 – Execution of Wills
7
FindLaw. Florida Code 689.01 – How Real Estate Conveyed
8
Florida Department of Revenue. Documentary Stamp Tax
9
Florida Senate. Florida Code 732.513 – Devises to Trustee
10
Justia Law. Florida Code 736.0813 – Duty to Inform and Account