Which Assets Should Go Into a Living Trust? A Florida Estate Planning Guide

3 groups of assets matter when you fund a living trust in Florida. Some are retitled into the trust, some pass by beneficiary designation, and some need special review. This guide sorts your assets into those groups and shows what to ask a living trust attorney in Miami before you transfer anything.

Key Takeaways

• A living trust controls only the assets that are actually transferred into it, so funding matters as much as signing.

• Bank accounts, investment accounts, and real estate are commonly retitled into the trust, and real estate needs a signed and witnessed deed.

• Retirement accounts and life insurance usually pass by beneficiary designation, so coordinate those forms instead of retitling them.

• Under Florida law, revocable trust property stays reachable by your creditors during your lifetime, so a revocable trust is not a shield.

• Keep an asset inventory and review it after major life events so new assets are not left outside the trust.

What Does It Mean to Fund a Living Trust?

A trust is a legal arrangement in which a trustee holds assets for the benefit of your beneficiaries. A living trust is set up while you are alive, and a revocable one lets you change or end it. Under Florida law, you may revoke or amend a trust unless its terms expressly say it is irrevocable. The catch is that a trust controls only the property that is actually placed in it.

Florida law recognizes several ways to create a trust, including a transfer of property to another person as trustee, or a declaration by the owner that the owner holds identifiable property as trustee. Either way, the trust works through its assets. A living trust in Florida that is signed but never funded may leave your property exactly where it was, in your own name.

Which Assets Are Commonly Retitled Into a Living Trust?

The firm's trust guides explain that funding means transferring assets into the trust, which may involve retitling bank accounts, investment accounts, real estate, and other assets into the name of the trust. These are the usual starting points because they are valuable and easy to identify, and assets held in a trust can avoid the delay of probate court.

Other items may need a separate step. Business interests may require a review of the ownership documents, and personal belongings such as furniture, jewelry, and art are often moved by a written assignment to the trust. Ask your attorney which method fits each item.

How Do You Transfer Real Estate Into a Trust?

Real estate usually requires a new deed. Florida law says an interest in real estate lasting more than one year must be transferred by a written instrument signed in the presence of two subscribing witnesses. Because a home is often the largest asset a family owns, trust creation should include careful handling of the deed.

Before you sign, review the details that can affect the decision: your mortgage terms, your homestead status, property taxes, and title insurance. Those issues vary by property, so a general guide cannot settle them for you.

Which Assets Usually Stay Outside the Trust?

Retirement accounts, life insurance policies, and annuities typically pass by beneficiary designation rather than by retitling. For retirement accounts, moving ownership into a trust can create tax consequences, so the usual approach is to keep the account in your own name and coordinate the beneficiary form with your trust plan. Confirm the approach with your attorney and tax advisor. Payable-on-death and transfer-on-death accounts also pass to the named beneficiary, so decide whether to leave them as they are or move them.

Keep those forms current. Florida law makes a designation naming a former spouse void once a marriage is judicially dissolved, with exceptions, but relying on that rule is no substitute for updating the form.

Does a Revocable Trust Protect Assets From Creditors?

A revocable trust gives you control and flexibility, not creditor protection. Florida law says the property of a revocable trust is subject to the claims of the settlor's creditors during the settlor's lifetime, to the extent the property would not otherwise be exempt if you owned it directly.

An irrevocable trust can be different, but it is not a simple fix. Under the same section, a creditor of the settlor can reach the maximum amount that can be distributed to or for the settlor's benefit. The firm's guide on the role of trusts in comprehensive estate planning describes the tradeoff: a revocable trust offers flexibility and control, while an irrevocable trust provides asset protection benefits but limits your ability to change its terms.

How Does a Living Trust Work With a Power of Attorney?

A trust helps manage your assets if you become incapacitated, but only the assets inside it. Your agent under a durable power of attorney handles financial and legal matters outside it. Powers to create a trust or to amend one require your signature or initials next to each power under Florida law, and an agent can amend a trust only if the trust document explicitly allows it. The firm's durable power of attorney service covers the agent side of this pairing.

How Do You Build an Asset Inventory?

The firm's trust service page lists an asset inventory, a comprehensive list of the assets included in the trust, among the essential documents, alongside the trust agreement and the trustee designation forms. Start with account statements, deeds, insurance policies, and business documents, and note how each asset is titled today.

At Otero Law, Attorney Aurimar Otero, a University of Miami School of Law graduate admitted to the Florida Bar in 2017 and named a Super Lawyers Rising Star, leads planning sessions that help clients get financially organized and understand how their assets can be protected and managed. Working with experienced trust estate attorneys turns that inventory into a funding plan.

Checklist: Assets to Review With Your Attorney

Bring statements, deeds, and policies for each of these:

• Bank accounts, to be retitled into the trust if appropriate

• Investment and brokerage accounts, to be retitled if appropriate

• Real estate, which needs a signed and witnessed deed

• Business interests, which need a review of the ownership documents

• Furniture, jewelry, art, and other personal belongings