Am I required to fund my Florida trust agreement? When it comes to questions about funding your Florida trust agreement, we would highly recommend working with your experienced Florida estate planning attorney. He can work with you as you navigate the intricacies involved. Crafting a Florida trust agreement and funding it correctly are both strategic endeavors in the realm of Florida estate planning. It is not just about establishing a Florida trust to protect the legacy you wish to leave your loved ones but also ensuring the right assets are placed within it. 

When thinking about funding your Florida trust and deciding which assets to place in the trust, careful consideration and the counsel of an experienced Florida estate planning attorney becomes indispensable. Placing key assets into your Florida trust is a process known as “funding the trust”, and it can significantly influence how your wealth is managed and distributed. 

What about married couples, should they have a trust? One of the foundational pieces of advice for many married couples, especially those in stable first-time or long-time marriages, revolves around the ownership structure known as “tenants by the entirety” (TBE). Under this ownership model, both spouses own the property wholly. In simpler terms, neither has a divisible interest; both own one hundred percent. 

This approach can offer notable asset protection benefits. For example, if either spouse is sued individually and not jointly, then assets owned as TBE are not at risk and receive protection.  In addition, when one spouse passes away, the asset (e.g., property, account, etc.) ownership seamlessly transfers to the surviving spouse without the complexities of probate. Although every planning opportunity is unique, we often find that only after this first death, for a stable marital situation, do we recommend funding the survivor’s trust. This strategy ensures that the unique protective features of TBE ownership are maximized during the couple’s joint lifetime. It is essential to note that these protective characteristics might not be retained if assets are owned in a joint trust or separate trusts.

Keep in mind that while trusts are versatile tools in Florida estate planning, they are not always suitable planning options for all asset types. For example, even when we are working with a single individual or there is no living spouse, we typically recommend against funding assets such as automobiles, boats, and RVs into trusts. There are two reasons for this. First, transferring the title of these assets post-mortem is normally straightforward without delving into probate. Secondly, placing these assets into trusts can create challenges with insurability.

So remembering the above cautions, the critical assets you might consider for trust funding include, but are not limited to, the following:

  • Real estate. Properties, especially those not covered under TBE, can benefit from being in a Florida trust, simplifying the transfer process and potentially avoiding probate.
  • Bank accounts. Financial assets, including savings and checking accounts, can be funded into a Florida trust for more straightforward management and distribution.
  • Investment accounts. Stocks, bonds, mutual funds, and other investment vehicles can be integrated into a trust structure, allowing for organized management and potential tax advantages. IRAs are more complex in their structure and, if you are contemplating leaving these to your trust agreement, you should first speak with your Florida estate planning attorney.
  • Business interests. If you have shares in a business or own a business outright, placing these within a Florida trust can ensure that the enterprise’s continuity is not disrupted and that your beneficiaries are protected.
  • Valuables and collectibles. Art, jewelry, and other items of significant value can be placed in a Florida trust, ensuring they are passed down as you wish.

Remember, a Florida trust is more than a legal document; it is a strategic vessel for preserving and protecting your legacy. The task of deciding which assets to include is not one to take lightly, but by working with an experienced Florida estate planning attorney, you can create a Florida trust that aligns with your unique needs, circumstances, and future aspirations, ensuring peace of mind for you and your loved ones.

We know this article may raise more questions than it answers. At Perlin Estate Planning & Probate our credentials enable us to provide a multi-disciplinary approach to our legal services.  By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.