Why people set up trusts, the most common types and setups, what they cost, how they're managed, the tax and liability picture, and how to put a Florida homestead in a trust without losing your exemption.
You (the grantor) transfer assets to a trustee, who manages them for the beneficiaries under the rules you write. With a revocable living trust, you usually wear all three hats while you're alive.
Assets titled to the trust pass without a court process that can take six months to two years.
A will becomes public in probate. A trust stays private between the trustee and the family.
A successor trustee steps in if you can't manage, avoiding a court-supervised guardianship.
Stagger gifts to children, protect a spouse from a prior marriage, or set conditions.
Avoid a second "ancillary" probate in each state where you own real estate.
Provide for a loved one without disqualifying them from government benefits.
Larger estates use irrevocable trusts to manage estate, gift and income taxes.
Spendthrift terms can shield what beneficiaries inherit from their creditors and divorces.
| Question | Which law decides? |
|---|---|
| Is the trust valid? What are the trustee's duties? | State law. In Florida, the Florida Trust Code (Fla. Stat. ch. 736), based on the Uniform Trust Code used in more than 30 states |
| Estate, gift and trust income taxes | Federal law, the same in every state. Florida has no state estate or inheritance tax |
| Deeds, homestead, recording | The state where the real estate is located, so Florida rules apply to a Florida home |
| Creditor protection | State law. Florida does not protect a trust you set up for yourself |
It's usually still valid, but have a Florida attorney review it. Florida requires the testamentary parts of a revocable trust to be signed with will formalities (Fla. Stat. 736.0403), and the property appraiser looks for specific homestead language.
Nevada, Delaware, South Dakota and Alaska allow "self-settled" asset protection trusts. Florida does not (Fla. Stat. 736.0505).
| Feature | Revocable living trust | Irrevocable trust |
|---|---|---|
| Can you change or cancel it? | Yes, any time while competent | Generally no, only in limited ways |
| Who controls the assets? | You, as trustee | An independent trustee |
| Avoids probate? | Yes, for funded assets | Yes |
| Protects from your creditors? | No (Fla. Stat. 736.0505(1)(a)) | Can, if you are not a beneficiary |
| Reduces estate tax? | No, stays in your estate | Can remove assets from your estate |
| Income tax | Your own return and Social Security number | Often its own return (Form 1041) and EIN |
| Step-up in basis at death | Yes | Usually no, unless included in the estate |
| Best for | Most families: probate, privacy, incapacity | Large estates, asset protection, special goals |
The everyday estate plan: probate avoidance, privacy and incapacity planning.
Created inside a will; only starts after death and after probate.
Holds real estate with the trustee on title; popular for privacy (Fla. Stat. 689.073).
Shields a beneficiary's inheritance from their creditors (Fla. Stat. 736.0502).
Keeps life insurance proceeds out of your taxable estate.
Moves assets out of the estate while a spouse can still benefit.
Transfers a home to heirs at a reduced gift-tax value; you live there for a term.
Supplements care without disqualifying Medicaid or SSI benefits.
Income to you for life or a term, the rest to charity; can defer capital gains.
Lasts for generations; Florida allows trusts up to 360 years (Fla. Stat. 689.225).
Advanced Florida planning to keep homestead tax benefits inside an irrevocable trust.
Not a trust: a deed that passes a home at death without probate.
There's no single "right" trust. These are the setups Florida attorneys most often recommend for each situation.
| Your situation | Typical setup | Why people choose it |
|---|---|---|
| Single homeowner | Revocable living trust + pour-over will | The most common plan in Florida: no probate, privacy, a successor trustee if you can't manage. |
| Married couple | Joint revocable trust, or one trust each | Joint is simpler to run; separate trusts can suit second marriages and keep assets clearly divided. |
| Parents of young children | Revocable trust with children's sub-trusts | A trustee manages money until set ages (for example 25, 30, 35) instead of a court guardianship. |
| Blended family | Revocable trust with a marital (QTIP) trust | Supports a spouse for life while guaranteeing the rest goes to your own children. |
| One home, simple wishes | Lady Bird deed (no trust) | Low cost; the home passes at death without probate and you keep full control. |
| Rental or investment property | LLC owned by your revocable trust; land trust for privacy | The LLC limits liability from the property, the trust avoids probate, the land trust keeps names off title. |
| Loved one with a disability | Third-party special needs trust | Pays for extras without disqualifying Medicaid or SSI. |
| Estate near or above $15M | ILIT, SLAT, dynasty or charitable trusts | Moves growth out of the taxable estate. |
| Foreign (non-U.S.) buyer | Structure set by international tax counsel | Only a $60,000 U.S. estate tax exemption applies to non-resident foreigners. |
Benchmarks are the fees Florida law presumes reasonable for ordinary services. Many attorneys charge less, family members often waive the personal representative fee, and court costs and extra services are additional. Homestead often passes outside the probate estate.
| Item | Typical range |
|---|---|
| Revocable trust plan by a Florida attorney (trust, pour-over will, powers of attorney, health care documents, deed) | $2,000 – $5,000+ |
| Irrevocable or asset-protection trust | $3,000 – $8,000+ |
| Lady Bird deed only | $400 – $1,000 |
| Recording the deed (county clerk) | $10 first page, $8.50 each added |
| Doc stamps, deed to your own revocable trust | Usually $0.70 minimum |
| Professional trustee (bank or trust company) | Often about 1% of assets a year |
Ranges are published estimates from Florida attorneys and vary with complexity. Ask for a written flat-fee quote that includes funding and the deed.
As trustee you buy, sell and refinance as before, signing "as trustee." Income goes on your own Form 1040; a revocable trust needs no separate return.
Your named successor trustee takes over under the terms you set, typically after a doctor's certification, without a court guardianship.
The trustee files a Notice of Trust with the court, notifies beneficiaries within 60 days, gets an EIN, pays debts and taxes, then distributes.
Federal estate and gift exemption per person in 2026 ($30M per married couple), made permanent and inflation-indexed by the One Big Beautiful Bill Act.
Annual gift exclusion per recipient in 2026 ($38,000 for a married couple).
Florida estate or inheritance tax. Florida has none.
A trust that keeps its income hits the top bracket at just $16,000. Distributing income usually shifts the tax to beneficiaries. Revocable trusts are taxed to you while you're alive.
Assets stay in your taxable estate and income is taxed to you. The upside: heirs still get a step-up in basis. A home bought for $800,000 and worth $2.5M at death generally gets a $2.5M basis, so a quick sale produces little or no capital gain.
ILITs, SLATs, QPRTs and dynasty trusts can reduce estate tax for estates near or above the exemption; charitable trusts can defer capital gains. The trade-off is control and usually the step-up.
Non-U.S. persons who are not U.S. residents get only a $60,000 U.S. estate tax exemption on U.S. assets such as Miami real estate. Work with international tax counsel.
| Situation | Protection? | Why |
|---|---|---|
| Your creditors vs. your revocable trust | No | Assets you can take back are reachable (Fla. Stat. 736.0505(1)(a)) |
| Trust you set up for your own benefit | No | Florida does not allow self-settled asset protection (736.0505(1)(b)) |
| Irrevocable trust for others, with spendthrift terms | Generally yes | Beneficiaries' creditors can't reach undistributed assets (736.0502) |
| Transfers made to dodge a known claim | No | Florida's fraudulent transfer law can undo them (Fla. Stat. ch. 726) |
| A tenant or guest injured at a rental | No | A trust doesn't limit liability from operating property; investors pair an LLC with insurance |
| Your Florida homestead | Constitution | Homestead's own creditor protection (Art. X §4); a properly drafted revocable trust generally keeps it |
With a revocable living trust drafted for homestead, you generally keep every property tax benefit. Here's what carries over and how the transfer is done.
You live there and the trust gives you a beneficial interest for life (Fla. Stat. 196.031, 196.041(2)).
A deed to your own trust isn't a change of ownership when you stay the beneficiary (193.155), so no reassessment.
Your Save Our Homes benefit can still move to a future Florida homestead.
Depends on drafting. Moving the home to an irrevocable trust can lose it.
A trust can't bypass spouse and minor-child rules (736.1109); a spouse can waive them in a deed (732.7025).
Federal Garn-St Germain Act protects transfers to a living trust where you remain a beneficiary.
More on the exemption itself: Florida homestead & property taxes guide.
Two adult children, $300,000 a year of net rental income, and each property in its own LLC. Here is how a Florida estate attorney would typically structure her plan, and why.
Miami-Dade, each in its own LLC
$1.5M of mortgages, so $6M of equity
Net rental income
Bought for $2.5M over 25 years, about $1M depreciated
| A tenant is hurt at one property | The claim can generally reach only that property's LLC, about $400K of equity. The other 14 properties, her home and her accounts are walled off. In one big LLC, all $6M would be exposed. |
| Maria causes a car accident | A personal judgment can pursue her LLC interests; Florida courts can order a single-member LLC interest sold. Her protection here is a large umbrella insurance policy. |
| Maria has a stroke | Her children are already named successor trustees and successor managers in every operating agreement, so rent, leases and repairs continue the next day with no guardianship. |
| Maria passes away | No probate (about $300K of statutory fees avoided on $6M), no estate tax under the $15M exemption, and her children's basis steps up from about $1.5M to $7.5M. |
| The children split the properties | The trustee assigns 7 LLCs to one child and 8 to the other, balanced by value with cash. No deeds change. Each LLC files a change-of-control notice (Form DR-430) and is reassessed at market value. |
| Item | Rough cost |
|---|---|
| Trust plan (trust, pour-over will, POA, health care, homestead deed) | $3,000 – $7,000+ |
| Assign 15 LLC interests and update 15 operating agreements | Often $150 – $500 per LLC |
| Optional holding LLC restructure | $1,500 – $5,000+ |
| Florida LLC annual reports | $138.75 × 15 ≈ $2,080 a year |
It depends on how they received it. The trust doesn't create the tax break; inheriting at death does. Lifetime gifts and most estate-tax irrevocable trusts pass along the parent's original, low basis.
| Maria's kids receive the rentals by… | Basis | Tax if sold at $7.5M |
|---|---|---|
| Inherited through a revocable trust | $7.5M (stepped up) | About $0 |
| Inherited through a will (probate) | $7.5M (stepped up) | About $0 |
| Gifted while the parent is alive | $1.5M (parent's basis) | About $1.4M |
| Irrevocable trust kept out of the estate | Usually $1.5M | About $1.4M |
Illustrative, using Maria's $1.5M basis and $7.5M value. Growth after the date of death is still taxable when sold.
| Rentals moved to the trust in 2015 | $10,000,000 |
| Basis after $2,000,000 of depreciation | $4,000,000 |
| Value at death, sold | $15,000,000 |
| Gain (no step-up) | $11,000,000 |
| Federal tax: 25% recapture + 20% gain + 3.8% NIIT | ≈ $2,718,000 |
| Estate tax avoided if the estate was over $15M (40%) | ≈ $6,000,000 |
Worth it for a large estate. For an estate under $15M, no estate tax was due, so the kids paid about $2.7M for nothing. A "swap" power before death or a 1031 exchange after can reduce the hit. Florida's 0.70% deed tax (about $105,000) applies to any sale.
| Situation | Usually | Why |
|---|---|---|
| Estate well under $15M, wants control | Revocable | Keeps the step-up and full control; no estate tax to save |
| Estate well above $15M ($30M for a couple) | Irrevocable | Saves 40% estate tax on growth, which can outweigh losing the step-up |
| Serious lawsuit exposure (doctor, contractor, business owner) | Irrevocable | A trust for others, set up well before any claim, can be beyond creditors |
| Planning for nursing-home Medicaid | Irrevocable | Assets can stop counting after Medicaid's 5-year look-back |
| Large life insurance policy | Irrevocable (ILIT) | Keeps the payout out of the taxable estate |
| Child with a disability | Irrevocable (special needs) | Protects Medicaid and SSI eligibility |
| Big gain and charitable goals | Irrevocable (CRT) | Income stream, deferred capital gains, remainder to charity |
Many older irrevocable trusts were set up when the exemption was $3.5M–$5M. Today, estate-tax irrevocable trusts mostly make sense near or above $15M.
Every revocable trust becomes irrevocable at death; lifetime trusts for children are irrevocable.
Common for families with $1M–$5M policies, at any wealth level.
Protects a disabled family member's benefits.
Middle-income seniors protecting a home or savings from long-term care costs.
Professionals and business owners with lawsuit risk.
Owners of highly appreciated property or stock.
Straight answers to the questions I hear most from Florida homeowners and investors.
Yes. With a revocable living trust that gives you a beneficial interest for life, you generally keep the homestead tax exemption, the Save Our Homes cap and portability (Fla. Stat. 196.031, 196.041(2), 193.155). The deed must be drafted carefully, a spouse must join, and the property appraiser may ask for a copy of the trust.
Not when done correctly. Deeding a home to your own revocable trust, while you remain the beneficiary and keep living there, is not treated as a change of ownership, so the assessment is not reset.
Florida attorneys commonly quote about $2,000 to $5,000 or more for a revocable trust plan with a pour-over will, powers of attorney, health care documents and the deed. Irrevocable or asset-protection trusts often start around $3,000 to $8,000 and complex plans cost more.
The revocable living trust with a pour-over will. People use it to avoid probate, keep their affairs private and name a successor trustee in case they become incapacitated.
Mostly yes. Florida trusts are governed by the Florida Trust Code (Chapter 736). Federal tax law applies everywhere, and real estate follows the law of the state where it is located. A trust from another state is usually still valid in Florida but should be reviewed by a Florida attorney.
When someone dies, the assets their heirs inherit generally get a new tax basis equal to market value at the date of death (IRC §1014). Gain that built up during the owner's life, including depreciation on rentals, is generally wiped out for income tax purposes.
Generally only on growth after your death. Assets in a revocable trust are part of your estate, so they get the step-up in basis. The same is true for assets inherited through a will. The trust is not what saves the tax; inheriting at death is.
Usually yes. Most estate-tax irrevocable trusts keep assets out of your estate, so there is no step-up in basis (IRS Rev. Rul. 2023-2). Your children keep your original basis and owe capital gains tax, plus depreciation recapture on rentals, when they sell. That can still be worth it if the trust saved 40% estate tax on a large estate.
For appreciated real estate, leaving it at death is usually better for income tax because of the step-up in basis. A lifetime gift passes along your low basis. Gifting can make sense for larger estates or fast-growing assets; ask your CPA to run the numbers.
Florida has no inheritance or estate tax, and receiving an inheritance is not income for federal tax. Federal estate tax applies only to estates above $15 million per person in 2026. You may owe tax later if you sell for more than your stepped-up basis.
No. In Florida, assets in a trust you can revoke remain reachable by your creditors (Fla. Stat. 736.0505(1)(a)). For rental properties, liability protection comes from LLCs and insurance. A Florida homestead has its own constitutional creditor protection.
Often both. The LLC limits liability from operating the property; the revocable trust owns the LLC interests to avoid probate and plan for incapacity. Deeding properties out of an LLC into a trust can remove the liability shield.
Many investors do, because a claim at one property generally reaches only that LLC's assets. It costs more to maintain (a Florida annual report is $138.75 per LLC) and requires separate bank accounts, leases and insurance for each.
No. A revocable trust is ignored for income tax while you are alive. Single-member LLCs owned by your revocable trust stay on your personal return.
No. Irrevocable trusts used to cut federal estate tax mostly make sense near or above $15 million per person, but people at every wealth level use irrevocable trusts for life insurance, special needs, Medicaid planning, asset protection and charitable giving.
Yes, for a revocable trust you are usually your own trustee. You name successor trustees, such as a spouse, adult child or professional, to take over if you become incapacitated or pass away.
A revocable trust does not. Certain irrevocable Medicaid trusts can, if set up at least five years before applying because of Medicaid's look-back period. This is specialized elder-law planning.
Not for a revocable trust while you are alive. An irrevocable trust, or a trust after the grantor's death, generally needs its own EIN and files Form 1041 if it has $600 or more of gross income.
Generally yes. Non-homestead property is reassessed to market value after a change of ownership or a change of control of the LLC that owns it, which must be reported to the property appraiser (Form DR-430).
It generally stays valid. Have an attorney in your new state review it, especially for real estate, taxes and any state estate tax.
Yes. A pour-over will sends anything left outside the trust into it and names guardians for minor children.
Yes. You sign as trustee. Have the trust and a certification of trust (Fla. Stat. 736.1017) ready for the title company and lender.
A land trust keeps your name off public title. A beneficiary with a lifetime interest can still claim homestead (Florida Attorney General Opinion 2008-44).
Simple trusts are often settled in a few months to a year, much faster than formal probate. The trustee files a Notice of Trust, notifies beneficiaries within 60 days, pays final bills and taxes, then distributes.
I work alongside your estate attorney and title company on purchases, sales and deeds into trust, so the property side is done right and your homestead benefits stay in place.
Florida Trust Code, Chapter 736, Florida Statutes
flsenate.gov
The Revocable Trust in Florida, The Florida Bar
floridabar.org
Probate in Florida, The Florida Bar
floridabar.org
Attorney fee schedule, Fla. Stat. 733.6171
flsenate.gov
2026 inflation adjustments (Rev. Proc. 2025-32), IRS
irs.gov
2026 estate, gift & GST figures, Harris Beach Murtha
harrisbeachmurtha.com
Summary administration raised to $150,000, Kogan Law
kogan.law
Putting your house in a trust in Florida, Alper Law
alperlaw.com
Homestead exemption & land trusts, AGO 2008-44, Florida Attorney General
myfloridalegal.com
Trustee duty to inform and account, Zoecklein Law
zoeckleinlawpa.com
Homestead exemption requirements, Miami-Dade Property Appraiser
miamidadepa.gov
No step-up for irrevocable trust assets outside the estate (Rev. Rul. 2023-2), IRS
irs.gov
Estate tax for non-U.S. persons, 2026, Skatoff Law
skatoff.com
Disclaimer: Geva Bar is a licensed real estate advisor, not an attorney, CPA or financial advisor. This page is general education only and is not legal, tax or financial advice, and it does not create an attorney-client relationship. Laws, tax figures and fees change, and every family's situation is different. Consult a Florida-licensed estate planning attorney and a qualified tax professional before creating a trust or transferring property. Figures are as of October 3, 2026. Compass Florida, LLC is a licensed real estate broker. Equal Housing Opportunity.