Living Trusts in Florida
A living trust is a common term used for a grantor revocable trust where the trust grantor is still alive and retains all rights of ownership and use of the trust property. The living trust grantor pays all taxes attributable to ownership of the trust property.
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Florida Benefits
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The primary benefit of a living trust that has its situs or principal place of administration in Florida is that there are no income taxes in Florida. Florida trust property taxation is at the federal level only unless there is real estate property in the trust. Real estate still pays required taxes at the county level where the real estate is located. Living trust creation cannot occur in another state and claim Florida as the trust situs simply to avoid payment of state income tax in the state the trust is located, as Florida statutes require sufficient ties to Florida to claim jurisdiction in the state.
Trust Creation
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Florida law is simple in allowing trust creation, in that the only requirement is that property transfer occurs from the grantor to a trustee. Trust agreement execution occurs with the same formality as a last will and testament, which means that signature by the living trust grantor is in the presence of at two witnesses and a notary officer.
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Florida Grantor Law
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Florida trust code models after the uniform trust code with few modifications, and is liberal to living trust grantors. Unless otherwise stated in the trust agreement, Florida statutes allow that a trust grantor may revoke or amend the trust unless it is a joint trust with a spouse. For joint spousal trusts with community property, a spouse acting alone may revoke the trust but both spouses must agree to modify or amend the trust.
Seek Professional Help
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Drafting a living trust is complicated from a legal and tax perspective. State trust laws and the federal tax code constantly change, which means it is always a good idea to seek advice from a professional in the field of trust law and tax.
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References
- The 2010 Florida Statutes: 736.0602 Revocation or amendment of revocable trust.
- The 2010 Florida Statutes: 736.0401 Methods of creating trust.
- The 2010 Florida Statutes: 736.0403 Trusts created in other jurisdictions; formalities required for revocable trusts.
- The 2010 Florida Statutes: 732.502 Execution of wills.
- The 2010 Florida Statutes: 736.0107 Governing law.
