A trust can help you decide how property will be managed and when your beneficiaries will receive it. Some trusts also serve specific tax-planning purposes. The benefits depend on the trust’s terms, the property involved and the way the plan is carried out; creating a trust does not automatically reduce taxes or protect your assets from creditors.
What Is a Trust?
A trust is a legal agreement that allows you to transfer your assets into a trust. You can appoint one or more trustees to manage the assets in the trust to benefit your designated beneficiaries. There are many different types of trusts, each with their own purpose. There are two main types of trusts: revocable and irrevocable. An experienced estate planning attorney can help you understand which type of trust can best meet your estate planning needs.
How Trusts Enable Control Over the Distribution of Your Assets
A properly funded living trust can allow its trustee to manage and distribute trust property without probate. Property left outside the trust may still require probate unless it passes through another effective arrangement. The trust’s terms can provide continuing management for beneficiaries, but administration still involves work, costs and legal responsibilities.
Trust administration is generally more private than probate because a living trust ordinarily is not filed in court solely because its creator dies. Privacy is not absolute. Beneficiaries may be entitled to information, recorded deeds remain public, and a dispute or other proceeding may require disclosure.
A Trust Allows You to Specify When Your Beneficiaries Receive Their Inheritance
When you create a trust agreement, you have control over how your beneficiaries will receive their inheritance. If one or more of your children are young adults, you may want to include provisions protecting them from financial mismanagement.
You may disburse a limited amount of funds to a younger beneficiary until he or she turns thirty so he or she doesn’t spend his or her inheritance. You can also set conditions for using the assets in the trust. You may want to limit the use of the asset in the trust to purchasing a home or receiving an education.
Tax Benefits Offered By Trusts
Tax planning requires distinguishing a revocable trust from an irrevocable trust. A typical revocable living trust does not reduce the creator’s income or estate taxes. An appropriately designed and administered irrevocable trust may move future appreciation or other value outside a taxable estate, but retained rights can cause estate inclusion. Gift-tax reporting, income taxes and the property’s income-tax basis must also be considered.
The annual gift-tax exclusion applies to qualifying present-interest gifts, not automatically to every contribution to a trust. Larger or nonqualifying gifts may require a gift-tax return and use part of the donor’s available lifetime exclusion rather than produce immediate tax. Generation-skipping transfer tax planning may matter for married or unmarried donors who provide for grandchildren or later generations. Charitable trusts have separate requirements and tradeoffs.
Interested in Creating a Trust in Florida? We Can Help
Spiro Verras can explain which trust arrangements fit your goals, what control you would retain, and how funding and administration would work. Where tax planning is needed, we can coordinate with your CPA and other advisers. Contact our office to arrange a consultation.
Sources: IRS gift-tax guidance; Florida Statutes § 736.0505.
Updated October 26, 2026.