Funding Your Florida Trust: Why It Matters More Than You Think

Creating a trust is a smart move for protecting your assets and avoiding probate in Florida—but that trust won't help you or your loved ones unless it's properly funded. “Funding” means transferring your assets into the name of the trust, so the trust—not you personally—owns them if you are incapacitated or pass away.

If you skip this step, your estate may still go through Florida probate, and your carefully drafted trust could be rendered ineffective.

What Does It Mean to Fund a Trust?

In Florida, funding your trust means transferring ownership of assets from your individual name into the name of the trust. This typically includes:

1. Real Estate

• Your primary residence (with special considerations if it’s homestead property in Florida)
• Vacation homes or rental properties
• Undeveloped land or investment property

2. Bank Accounts

• Checking accounts
• Savings accounts
• Money market accounts
• Certificates of deposit (CDs)*

Some banks may require CD maturity before retitling or might charge early withdrawal penalties.

3. Investment and Brokerage Accounts

• Stocks, bonds, and mutual funds held in brokerage accounts
• Treasury securities (can be retitled through TreasuryDirect)
• Other non-retirement investment assets

4. Business Interests

• Ownership in a Florida LLC, corporation, or partnership
• Shares of stock in privately held businesses
• Sole proprietorship assets

Often requires an amendment to operating agreements or buy-sell provisions.

5. Personal Property of High Value

• Art, antiques, collectibles
• Jewelry, equipment, and valuable furnishings
• Vehicles (optional; in Florida, it’s often better to leave these out unless high value)

These items are often transferred by a general assignment document attached to the trust.

6. Life Insurance (Beneficiary Designation)

• You don’t usually retitle life insurance to the trust, but you can name the trust as the primary or contingent beneficiary.

7. Retirement Accounts (IRA, 401(k), etc.)

• Do not retitle retirement accounts to the trust.
• Instead, consider naming the trust as a beneficiary—especially for minor children or spendthrift heirs.

⚠️ Be cautious here—this can have tax consequences. Always coordinate with a financial advisor or attorney.

8. Annuities

• Similar to retirement accounts, these are typically not retitled to the trust, but the trust may be named as beneficiary.

9. Safe Deposit Boxes

• The lease agreement can be transferred into the name of the trust, depending on your bank’s policy.

Without these transfers, the assets remain part of your probate estate—subject to court oversight, delays, and expenses.

What Happens If You Don’t Fund Your Trust?

Here are a few real-world examples, specific to how Florida law applies:

1. Probate Still Happens
Example: Mary and Bob set up a Florida revocable living trust but never moved their Jacksonville home into it. When both Bob and Mary passed away, the home had to go through Florida probate, costing their children time and thousands in legal fees—despite the existence of a trust designed to avoid that.

2. Florida’s Intestacy Laws Take Over
If your trust isn't funded, and no will directs assets into the trust (called a “pour-over will”), Florida’s intestate succession laws decide who inherits—which may not match your wishes.

3. Delays in Accessing Funds
Banks in Florida may freeze accounts held in an individual’s name at death. If those accounts aren’t titled in the trust or payable to the trust, your trustee won’t be able to access them without a court order.

Key Florida Considerations When Funding a Trust

Homestead Property Is Special in Florida
Florida’s homestead laws are strict. While you can transfer your homestead into a revocable trust, it must be structured correctly to avoid losing homestead tax exemptions and creditor protection. There is a specific clause in the trust that the tax appraisers office will want to see to keep the homestead exception.

Don’t Forget the Lady Bird Deed Option
Florida allows for enhanced life estate deeds (Lady Bird deeds), which let you retain full control of your property during life while naming your trust as the beneficiary upon death. This avoids probate and keeps the home out of court.

Final Thoughts

In Florida, creating a trust is only half the estate planning equation—the other half is funding it. If your trust isn’t funded, it can’t do its job: protecting your assets, avoiding probate, and simplifying matters for your spouse and family.

With Florida’s unique laws around homestead property, creditor protection, and probate, it’s essential to work with an attorney who understands the local landscape. Don’t let your trust become a hollow document—make sure it’s filled with the assets you worked so hard to build.

Questions? Reach out to us to get started.