Florida Estate Planning Lawyer Blog
FLORIDA REVOCABLE TRUST STRUCTURE
A Florida revocable trust is created when an individual (typically called the grantor in Florida but also known as settlor, or trustor) signs a trust agreement naming a person(s), a corporation, or both to administer the trust (the trustee or corporate trustee). In Florida and many other jurisdictions the Grantor can also serve as a trustee, the grantor and the trustee can be the same person. Generally a grantor does serve as the initial trustee of their revocable trust and then names a few successor trustees two or more of whom may serve as successor co trustees in order to insure continuity of management in the event of death or disability.
Naming a corporate trustee rather than an individual ensures that a competent and experienced trustee will always be available to act in the grantor’s interests and upon his or her passing assisting the Trust Beneficiaries with the trust administration. Florida Trust Statutes requires a corporate trustee when the assets of the trust are in excess of ten million dollars.
There are advantages to using Corporate Trustees. In addition to always being available Corporate Trustees have professional experience in investing, management of money, and are very experienced in all aspects of trust administration as well as the ability to serve in a more objective manner then a family member would. However Corporate Trustees also frequently have minimum Trust account size that they will serve as the trustee for which may be $500,000 to a million or more. Also they are trust administration professionals they need to charge for their services so this may add additional administrative fees to the trust which will need to be balanced against the benefits from their services, the complexity and size of the trust and other factors to determine whether or not a Corporate Trustee is a good fit for a specific Trust Estate.
A revocable trust typically provides that property be managed for the grantors benefit. In most cases, the grantor retains certain rights over the trust during lifetime. These rights generally include the right to instruct the trustee to pay over all or any portion of the trust property, as the grantor desires, and the right to change or revoke the trust at any time. The trustee’s powers typically include the right to make discretionary distributions of income and principal to the grantor and, sometimes, to the grantor’s family, if the grantor becomes incapable of managing his or her own affairs. Florida Trust Law is contained in Florida Statutes chapter 737. When a grantor dies, the trust operates as provided for in the trust agreement. While the trust may be distributed outright upon the grantor’s passing if desired unlike a basic Florida will (one that does not contain a testamentary trust) it does not need to immediately pass to the beneficiaries. An important benefit of a trust is also that if properly funded Florida Trusts can achieve Florida probate avoidance.
Someone may have a child who is just 21 years of age when they pass on but instead of receiving all the property at that time and potentially squandering the money due to youth and inexperience it may be put into a trust to delay the distributions to specified ages such as 1/3 at 25 1/3 at 30 and the remainder at 35 or some other appropriate ages that the grantor determines or the
While a trust is not legally required to be funded it definitely should be since it will act no differently then a regular will in the event of death or disability where it can pass the property to the desired beneficiaries but if the trust is not funded it will not help avoid probate in Florida or avoid an ancillary probate elsewhere. By doing it while the grantor is living and has capacity it ensures continuity of management and care of the grantor, should he or she become disabled as well as helping to achieve a Florida probate avoidance.
Funding a trust during a grantor?s lifetime requires re-registering securities, real property, and other assets in the name of the trust in favor of the trust as the beneficiary of those benefits. Re-registration of property is not required in trusts funded at death where the probate estate is simply poured over by a will into the trust. However, funding a trust at death does not avoid the necessity of probate.