Trusts are an integral part of estate planning. You may have heard of trusts before, but still wonder, “What is a trust?” That’s a great question. First of all, a trust is a legal document. This legal document outlines an agreement between a beneficiary and a trustee. The creator of the trust is called the settlor, trustor, or grantor. There are many different types of trusts. For example, a trust can be created to manage the settlor’s assets or property during the lifetime of the settlor. This is called a living trust. This trust can also specify what is to be done with those assets after the settlor’s death. As a result, it may be possible to bypass probate. This is just one example of a trust. Speaking with an attorney is the best way to get more information about trusts. What is a trust? At Bret Jones, P.A., our team of attorneys and legal staff can assist you with any questions you may have about trusts.
Definitions of Trust
What are some of the legal definitions of trusts that we find in the Florida Statutes? What is a trust? Let’s see what the “Probate Code” says about trusts. Florida Statute 731.201 states:
“(38) “Trust” means an express trust, private or charitable, with additions to it, wherever and however created. It also includes a trust created or determined by a judgment or decree under which the trust is to be administered in the manner of an express trust. “Trust” excludes other constructive trusts, and it excludes resulting trusts; conservatorships; custodial arrangements pursuant to the Florida Uniform Transfers to Minors Act; business trusts providing for certificates to be issued to beneficiaries; common trust funds; land trusts under s. 689.071, except to the extent provided in s. 689.071(7); trusts created by the form of the account or by the deposit agreement at a financial institution; voting trusts; security arrangements; liquidation trusts; trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind; and any arrangement under which a person is nominee or escrowee for another.” (2018).
What is a trust? As we stated above, we know that a trust is a legal document. The majority of statutes to which an estate planning attorney will consider when creating a trust are found in the “Florida Trust Code”, Chapter 736 of the Florida Statutes. The Florida Trust Code is expansive. An attorney will reference and look to the Florida Trust Code and Probate Code when looking to statutes that pertain to trusts. Florida Statute 736.0105 specifies how the Florida Trust Code pertains to trusts:
“Default and mandatory rules.—
(1) Except as otherwise provided in the terms of the trust, this code governs the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.
(2) The terms of a trust prevail over any provision of this code except:
(a) The requirements for creating a trust.
(b) The duty of the trustee to act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
(c) The requirement that a trust have a purpose that is lawful, not contrary to public policy, and possible to achieve.
(d) The periods of limitation for commencing a judicial proceeding.
(e) The power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice.
(f) The requirements under s. 736.0108(1) for the designation of a principal place of administration of the trust and the requirements under s. 736.0107 for the designation of a jurisdiction the law of which determines the meaning and effect of the terms of a trust.
(g) The jurisdiction and venue provisions in ss. 736.0202, 736.0203, and 736.0204.
(h) The restrictions on the designation of representative under s. 736.0306.
(i) The formalities required under s. 736.0403(2) for the execution of a trust.
(j) The power of the court to modify or terminate a trust under ss. 736.0410-736.04115, except as provided in s. 736.04115(3)(b), and under ss. 736.0413, 736.0415, and 736.0416.
(k) The ability to modify a trust under s. 736.0412, except as provided in s. 736.0412(4)(b).
(l) The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in part V.
(m) The trustee’s duty under s. 736.05053 to pay expenses and obligations of the settlor’s estate.
(n) The trustee’s duty under s. 736.05055 to file a notice of trust at the settlor’s death.
(o) The right of a trustee under s. 736.0701 to decline a trusteeship and the right of a trustee under s. 736.0705 to resign a trusteeship.
(p) The power of the court under s. 736.0702 to require, dispense with, modify, or terminate a bond.
(q) The power of the court under s. 736.0708(2) to adjust a trustee’s compensation specified in the terms of the trust that is unreasonably low or high.
(r) The duty under s. 736.0813(1)(a) and (b) to notify qualified beneficiaries of an irrevocable trust of the existence of the trust, of the identity of the trustee, and of their rights to trust accountings.
(s) The duty under s. 736.0813(1)(c) and (d) to provide a complete copy of the trust instrument and to account to qualified beneficiaries.
(t) The duty under s. 736.0813(1)(e) to respond to the request of a qualified beneficiary of an irrevocable trust for relevant information about the assets and liabilities of the trust and the particulars relating to trust administration.
(u) The effect of an exculpatory term under s. 736.1011.
(v) The rights under ss. 736.1013-736.1017 of a person other than a trustee or beneficiary.
(w) The effect of a penalty clause for contesting a trust under s. 736.1108.” (2018).
As we can see, an estate planning attorney will reference the Florida Trust Code. The Florida Trust Code is written in a way that covers a lot of ground. As we mentioned above, there are some key players in a trust. The key players in a trust are the settlor, beneficiary, and trustee. If you find that you are any one of these key players, it is probably beneficial for you to speak with an attorney if you haven’t already. What is a trust? We’ve only scratched the surface of what a trust is, the relevant statutes, and how it can be beneficial for you in estate planning. If you meet with us at Bret Jones, P.A., we can speak with you about the varying types of trusts that exist, and how they may or may not be beneficial to you.
What is a Trust? Contact Us at Bret Jones, P.A.
If you have any other additional questions about trusts, contact us at Bret Jones, P.A. We welcome legal questions. At our offices, your first consultation with us is free. Questions like “What is a trust” can be answered in more detail when you meet with us at our office. Schedule a time out of your day and reach out to us. We’d be happy to speak with you.