What Is a Trust in Miami, Florida?

A trust is a legal arrangement in which one person (the grantor) transfers ownership of assets to another person or entity (the trustee) to hold and manage for the benefit of one or more beneficiaries. In Florida, trusts are governed by the Florida Trust Code, codified in Chapter 736 of the Florida Statutes. Trusts are one of the most versatile tools in estate planning, and the Law Offices of Albert Goodwin, PA helps Florida families create, administer, and when necessary, litigate trusts across Miami-Dade, Broward, and Palm Beach counties.

The Three Parties to a Trust

The Grantor (Settlor)

The grantor — also called the settlor or trustmaker — is the person who creates the trust. The grantor decides what assets to place in the trust, establishes the terms and conditions for how those assets will be managed and distributed, selects the trustee, and names the beneficiaries. In a revocable living trust, the grantor often serves as the initial trustee during their lifetime, retaining full control over the trust property.

The Trustee

The trustee is the individual or institution responsible for managing the trust assets according to the terms of the trust document. The trustee owes fiduciary duties to the beneficiaries, meaning they must act in good faith, with loyalty, and in the beneficiaries' best interests. Florida Statutes Section 736.0802 requires the trustee to administer the trust solely in the interest of the beneficiaries. A trustee who violates these duties can be held personally liable for any resulting losses through a breach of fiduciary duty action.

The Beneficiary

The beneficiary is the person or entity who receives benefits from the trust. A trust may have multiple beneficiaries, and their interests can be structured in many ways. For example, a trust might provide income to a surviving spouse for life and then distribute the remaining principal to the grantor's children. Beneficiaries have enforceable rights under Florida law, including the right to receive accountings and information about the trust. Learn more about beneficiary rights in Florida.

How Trusts Work Under Florida Law

Creating a trust in Florida involves several steps. The grantor executes a written trust agreement (or trust declaration) that outlines the terms of the trust, identifies the trustee and beneficiaries, and describes the trust property. While Florida law does not generally require trusts to be recorded with any government office, a trust that holds real property should be reflected in a properly recorded deed transferring title from the grantor to the trustee.

Under the Florida Trust Code, a trust is created when the grantor indicates an intention to create the trust, the trust has a definite beneficiary (with limited exceptions for charitable or pet trusts), and the trustee has duties to perform. The trust must have a lawful purpose and must not violate public policy.

Once established, the trustee manages the trust property according to the trust terms. The trustee must keep adequate records, file tax returns if required, make distributions as directed by the trust agreement, and provide accountings to beneficiaries. When the trust terminates — typically upon a triggering event such as the grantor's death or a beneficiary reaching a specified age — the trustee distributes the remaining assets and winds down the trust.

Types of Trusts in Florida

Revocable Living Trust

A revocable living trust is created during the grantor's lifetime and can be amended or revoked at any time while the grantor has legal capacity. It is the most common trust used in Florida estate planning. The grantor typically serves as both the initial trustee and the primary beneficiary during their lifetime, then names a successor trustee and remainder beneficiaries to take over upon death or incapacity. The primary advantage is that assets held in a revocable living trust avoid probate entirely, passing directly to beneficiaries under the trust terms without court involvement.

Irrevocable Trust

An irrevocable trust generally cannot be amended or revoked once it is created, although Florida Statutes Sections 736.04113 and 736.04115 permit judicial and nonjudicial modification under certain circumstances. Because the grantor gives up control over the assets, irrevocable trusts can provide significant benefits including removal of assets from the grantor's taxable estate, protection from creditors, and Medicaid planning advantages. Common types of irrevocable trusts include irrevocable life insurance trusts (ILITs), qualified personal residence trusts (QPRTs), and special needs trusts.

Asset Protection Trust

An asset protection trust is designed to shield assets from future creditors. While Florida does not allow self-settled domestic asset protection trusts (meaning you generally cannot protect your own assets from creditors by placing them in a trust you create for your own benefit), irrevocable trusts created for the benefit of others can include spendthrift provisions under Florida Statutes Section 736.0502 that protect trust assets from a beneficiary's creditors.

Charitable Trust

A charitable trust is created for charitable purposes. Florida recognizes charitable remainder trusts (CRTs), which provide income to a non-charitable beneficiary for a period of time with the remainder going to charity, and charitable lead trusts (CLTs), which provide distributions to a charity for a period with the remainder passing to non-charitable beneficiaries. Charitable trusts may offer income tax deductions and estate tax benefits.

Special Needs Trust

A special needs trust (also called a supplemental needs trust) holds assets for a beneficiary with a disability without disqualifying them from means-tested government benefits such as Medicaid and Supplemental Security Income (SSI). These trusts supplement rather than replace government assistance. Florida law provides specific rules for first-party and third-party special needs trusts.

Constructive Trust

A constructive trust is not a traditional estate planning trust. It is a remedy imposed by a court to prevent unjust enrichment — for example, when someone wrongfully acquires or holds property that rightfully belongs to another person. Constructive trusts arise through litigation rather than through a written trust agreement.

Key Benefits of Creating a Trust in Florida

• Probate avoidance. Assets in a trust do not go through probate. This saves time and money and keeps the details of your estate private, unlike probate proceedings which become part of the public record.
• Incapacity planning. If the grantor becomes incapacitated, the successor trustee can seamlessly step in to manage the trust assets without the need for a court-appointed guardianship proceeding.
• Control over distributions. A trust allows you to specify exactly when and how beneficiaries receive their inheritance. You can stagger distributions by age, condition them on milestones, or provide ongoing management for beneficiaries who may not be ready to handle a lump-sum inheritance.
• Creditor protection. Properly structured irrevocable trusts with spendthrift clauses can protect assets from beneficiaries' creditors under Florida law.
• Multi-state property management. If you own real property in multiple states, holding that property in a trust avoids the need for ancillary probate in each state where property is located.
• Tax planning. Certain irrevocable trusts can reduce or eliminate estate and gift taxes for larger estates.
• Privacy. Unlike a will, which becomes a public document once filed with the probate court, a trust remains a private document. The terms, the assets, and the identity of beneficiaries are not part of the public record.

Trust Administration After the Grantor's Death

When the grantor of a revocable living trust dies, the trust typically becomes irrevocable and the successor trustee takes over. The successor trustee's duties include notifying beneficiaries, marshaling trust assets, paying the grantor's debts and taxes, and distributing property according to the trust terms. Florida Statutes Section 736.05055 requires the trustee to serve a notice of trust on the decedent's estate, if one exists, and on certain beneficiaries. Understanding these obligations is essential for proper trust administration.

Contact a Florida Trust Attorney

Whether you need to create a trust as part of your estate plan, you are serving as a trustee and need guidance on your duties, or you are a beneficiary with concerns about how a trust is being managed, the Law Offices of Albert Goodwin, PA can help. We work with clients throughout South Florida on trust creation, administration, modification, and litigation. Call us at 786-522-1411 or email [email protected] to schedule a consultation at our Coral Gables office.