Trusts are a common tool used to organize an individual’s estate. There are many benefits to using trusts, including potential tax benefits and increased control over how money is passed on and utilized. However, trusts also come with their fair share of legal complexities. Individuals who wish to use one or more trusts to manage their estate plans should be clear about the three parties involved in a trust: the trustor, trustee and beneficiary. Under Florida estate law have different responsibilities in the process of setting up, overseeing and passing along a trust.
The trustor is the individual who sets up the trust. This individual can also be referred to as the grantor, creator or, less frequently, the settlor. This trustor will set the parameters around the trust and select a trustee to sign onto the agreement. The trustee is legally obligated to manage the property in accordance with the document. Their legal obligation also requires the trustee to follow all applicable laws related to trust management.
The beneficiary is the other party involved in a trust. In some cases, there may be multiple beneficiaries, or beneficiaries can change over time. The trustee is obligated to manage the trust in the best interest of the beneficiaries, within the parameters set out by the trustor and the law. This is known as a “fiduciary duty.”
As one can clearly see, communication between the trustor, trustee and beneficiaries is very advisable. This can prevent unwelcome surprises and ensure that the fiduciary duties are clearly understood and properly carried out. A Florida elder law and estate planning attorney is an important person to have on hand to add legal clarity to these conversations.