Florida Living Trust

DEFINITION OF A TRUST

A trust is a legal arrangement where a person (the settlor) transfers assets to a trustee, who holds and manages those assets for designated beneficiaries. Trusts can be revocable or irrevocable, and serve a variety of purposes in estate planning, asset protection, and wealth distribution.

A revocable living trust allows the settlor to maintain control over their assets during their lifetime while simplifying the transfer of assets upon death. Key benefits include:

• Avoidance of probate
• Flexibility to specify how and when beneficiaries receive distributions
• Ability to provide for multiple generations

Because the trust bypasses probate, it ensures privacy and a faster distribution process compared to a will.

How a Living Trust Works

Once the trust settlor executes a living trust, he transfers his assets into the trust. During the settlor's lifetime, the trust is fully revocable and amendable, and the settlor typically serves as both trustee and beneficiary. The trust's assets remain under the settlor's control while he is alive.

Upon the settlor's death, the trust becomes irrevocable, and a successor trustee (who is designated in the trust) distributes trust assets and income to the beneficiaries. Since assets are titled in the name of the trust, no probate is needed to transfer ownership at death.

THE DIFFERENCE BETWEEN Living Trust AND LAST Will

While both documents serve to distribute assets after death, they have different features:

• A will must go through probate; a trust avoids probate entirely.
• A will becomes public record; a trust remains private.
• A will takes effect at death; a trust can manage assets during life and after death.

Living Trusts and Asset Protection

Living trusts do not protect the settlor's assets from creditors during his lifetime. However, a trust may hold membership interests in limited liability companies (LLCs) which offer asset protection, which can own real estate or other assets. This structure allows the settlor to direct post-death distributions through the LLC's operating agreement, avoiding probate and protecting his assets.

Trust Duration Under Florida Law

Under Florida Statutes, a trust can generally last up to 360 years under the rule against perpetuities. This extended duration allows for long-term planning and legacy wealth management.

(See Florida Statutes § 689.225)

Beneficiary Rights and Trust Enforcement in Florida

Beneficiaries of a trust have legal rights under the Florida Trust Code, including the right to:

• Receive annual accountings
• Be informed of the trust's existence and their interest in it
• Enforce proper administration of the trust

If a trustee fails to meet their duties, beneficiaries may file a petition in probate court to compel accountings, remove the trustee, or seek distributions. These rights are protected under Florida Statutes Chapter 736.

(See Florida Statutes § 736.0813 and § 736.1001.)

If you would like to set up a trust or need advice on how trusts work, call Fort Lauderdale Wills and Trusts Attorney John Clarke at (954) 556-8952!