How to Fund a Living Trust in Florida – Full Guide
In Florida, living trusts are popular estate planning tools used to avoid probate while permitting property owners to retain control over their assets during their lifetime. Do you know how to fund a Florida living trust? Keep reading to find out.
What is Florida Living Trust? – Understanding the Concept
A trust is a legal arrangement in which the person creating the trust (also referred to as “trustor” or “settlor”) transfers ownership of assets to a trustee (fiduciary) to benefit one or multiple beneficiaries.
Once a property is transferred to a trust, it is no longer considered part of the trustor’s estate. The trustee holds nominal ownership of the assets held in the trust, owing a fiduciary duty to act only in the best interest of the trustor and the trust’s designated beneficiaries.
As its name suggests, a revocable trust can be amended, modified, or even revoked while the trustor is still alive. Immediately after the trustor’s death, the trust becomes irrevocable, and the trustee must execute the provisions outlined in the trust instrument.
A living trust is a revocable trust in which the trustor designates him or herself as the trust’s trustee, retaining control of the assets held in the trust while he or she is still alive.
What is “Funding” a Florida Living Trust?
“Funding” a living trust refers to the act of transferring assets into the trust. In Florida, several assets may be part of a living trust for several reasons, such as:
Membership interest in business (e.g., ownership shares in a corporate business)
If a trustor fails to fund a Florida living trust, the trust will not serve its ultimate purpose. As provided by Florida Statutes §736.04113 (1), “upon the application of a trustee of the trust or any qualified beneficiary, a court at any time may modify the terms of a trust that is not then revocable (…) if:
The purposes of the trust have been fulfilled or have become illegal, impossible, wasteful, or impracticable to fulfill
Because of circumstances not anticipated by the settlor, compliance with the terms of the trust would defeat or substantially impair the accomplishment of a material purpose of the trust, or
A material purpose of the trust no longer exists”
Why Should You Fund a Living Trust in Florida?
The first advantage of a living trust is probate avoidance. As the assets held in the trust are no longer considered part of the trustor’s estate, they are subject to probate if the trustor dies.
A living trust also grants the trustor superior control over the assets held in the trust in the event of incapacitation or death. The trustee can only act based on the provisions in the trust instrument, as it reflects the trustor’s personal wishes.
While the last will becomes part of the public record after it is submitted to the court, a trust is a private arrangement that is not publicly recorded. Please note that creating and funding a living trust adequately requires expert legal guidance.
Do You Want to Fund a Living Trust in Florida? – Contact Your Florida Probate Lawyer Today
Business and Immigration Lawyer for Entrepreneurs, Start-ups, Small Businesses and Foreign Investors. Romy Jurado grew up with the business dream of becoming a lawyer and starting her own business. And today, she is living proof that dreams really do come true. As the founder of Jurado & Associates, PA, a specialty business, real estate, and immigration law firm, Romy's practice focuses primarily on domestic and international business transactions, with a strong emphasis on company formation, stock sales, and assets, contract drafting, and business immigration. In 2011, Romy earned her Juris Doctor degree from Florida International University School of Law. She is fluent in two languages (English and Spanish) and is the proud author of Starting a Business in the US as a Foreigner, an online business guide. Call 305-921-0976 or email [email protected] for a consultation.
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