Trust Planning & Administration

A trust does what it says only if it was drafted for your family, funded with the right assets and, when the time comes, administered by someone who knows what the law demands of a trustee. People find us at two points. Some are deciding between a revocable and an irrevocable trust and want to know what each one costs them in control and creditor protection. Others have just become the successor trustee after a parent's death and face a short list of deadlines: who must be notified, what must be accounted for, and what happens if a beneficiary objects.

TrustSphere handles both sides. This page covers the trust itself, from design and funding through administration and disputes. Wills, powers of attorney and healthcare directives belong to our Estate Planning practice, and layered creditor-protection structures to our Asset Protection practice.

What we handle

Revocable trusts

A revocable trust is one the person who created it, called the settlor, can change or cancel during life. Florida treats a trust as revocable unless its terms expressly say it is irrevocable (s. 736.0602). Because you keep control, your creditors keep access: property in a revocable trust is subject to the settlor's creditors during life to the extent it would not be exempt if you owned it directly (s. 736.0505). What the trust adds is continuity. A successor trustee you name can manage the assets if you become unable to, and assets titled in the trust pass under its terms without a probate proceeding.

Irrevocable trusts

An irrevocable trust cannot be rewritten by the settlor alone. You trade control for a purpose: setting terms for a beneficiary, holding property for someone else, or removing assets from your own estate. The trade has to be real. Under Florida's code, a creditor of the settlor of an irrevocable trust may reach the maximum amount that can be distributed to or for the settlor's benefit (s. 736.0505), so a trust you can draw from does not shield you. D.C. applies the same rule (D.C. Code § 19-1305.05). We tell you plainly when a structure would leave you reachable.

Special needs trusts

A special needs trust holds money for a person with a disability so that an inheritance or settlement does not end eligibility for means-tested benefits. The federal Medicaid statute sets conditions for a trust that holds the disabled person's own assets: the person must be under age 65 and disabled, the trust must be established by the individual, a parent, a grandparent, a guardian or a court, and the State must receive whatever remains at the person's death, up to the Medicaid assistance it paid (42 U.S.C. § 1396p). A trust funded with family members' money is analyzed under different rules, so we ask whose money is going in before we choose the form.

Spendthrift provisions

A spendthrift provision keeps a beneficiary from handing off an interest in the trust and keeps most creditors from reaching it before it is paid out. In Florida and in D.C., the provision is valid only if it restrains both voluntary and involuntary transfer, and wording that the interest is held subject to a spendthrift trust is enough (s. 736.0502; D.C. Code § 19-1305.02).

Funding the trust

Signing the trust document is not the end of the job. A trust controls only property that is titled in the trustee's name or made payable to the trust. Real estate needs a recorded deed, bank and brokerage accounts need to be retitled, and retirement accounts and life insurance pass by beneficiary designation, so each needs a separate decision. We prepare the deeds and assignments, review the designations, and keep a schedule of what the trust owns so a successor trustee is not left guessing.

Trust disputes

Disputes start when a beneficiary is never told a trust exists, receives no accounting, suspects self-dealing, or wants a trustee replaced, and when someone contests the trust itself. We advise and represent trustees and beneficiaries in those disputes. Time limits are short. In Florida, an action to contest a trust that was revocable at the settlor's death is barred if it is not brought within the period under chapter 95 or within 6 months after the trustee sends a copy of the trust and a notice of the time allowed, whichever is earlier (s. 736.0604).

What a successor trustee must do

A successor trustee's duties begin when the trust becomes irrevocable, usually at the settlor's death, and they are personal. The first weeks follow a sequence.

Accept or decline

In Florida, a person named as trustee accepts by following the method in the trust, or by accepting delivery of trust property or exercising a trustee's powers. A named trustee who has not accepted may decline, and may act to preserve trust property without accepting if the trustee promptly sends a qualified beneficiary a written statement declining (s. 736.0701). A qualified beneficiary is, in general, someone who is currently eligible to receive distributions or who would be if another beneficiary's interest ended (s. 736.0103).

Get the paperwork in order

The IRS lists a revocable trust that changes to an irrevocable trust among the situations that require a new employer identification number, so the trustee usually cannot keep using the settlor's Social Security number. In Florida, the trustee of a trust the settlor could revoke at death must also file a notice of trust with the court in the county of the settlor's domicile (s. 736.05055; s. 733.707). The trustee then secures and inventories the assets and keeps them apart from the trustee's own.

Notify, account and handle creditors

Notice deadlines are set by statute and are not the same everywhere, as the next section shows. Creditor procedures differ too. In D.C., if no estate proceeding has been opened, the trustee of a trust created by someone who has died may publish a notice, and claims against the deceased settlor are barred as to the trustee and trust property unless presented within 6 months after the first publication (D.C. Code § 19-1305.05). Maryland has its own version, also available only when no estate proceeding has begun: publication once a week for 3 successive weeks, with a 6-month window to present claims (§ 14.5-508 of the Estates and Trusts Article).

Notice and accounting rules in each jurisdiction

The first place a trustee's mistakes show up is the notice to beneficiaries. Each code sets its own clock, and the starting points differ. Here is what the text says.

Florida

Under the Florida Trust Code (chapter 736), the trustee must give the qualified beneficiaries notice within 60 days after learning that the trust has become irrevocable, stating the trust's existence, the settlor's identity, the right to request a copy of the instrument and the right to accountings (s. 736.0813). The trustee of an irrevocable trust must give each qualified beneficiary an accounting at least annually. Florida also lets a trustee start a 6-month clock on claims over matters disclosed in an accounting or other written report by sending the required limitation notice (s. 736.1008).

Kentucky

Kentucky's Uniform Trust Code (KRS Chapter 386B) also requires, unless the trust provides otherwise, notice within 60 days after the trustee learns the trust has become irrevocable (KRS 386B.8-130). It adds a floor that the trust's terms cannot lower: regardless of what the trust says, the trustee must notify and report to at least one qualified beneficiary of an irrevocable trust who is 25 or older, or to a person with a fiduciary relationship to that beneficiary.

Washington, D.C.

The Uniform Trust Code in Title 19, chapter 13 of the D.C. Code sets the same 60 days from the date the trustee acquires knowledge that the trust has become irrevocable (D.C. Code § 19-1308.13). A trustee who uses the creditor notice described above, where no estate proceeding is open, gets the 6-month bar on claims against the deceased settlor.

Maryland

The Maryland Trust Act (Title 14.5 of the Estates and Trusts Article) gives the trustee 90 days, not 60, to notify qualified beneficiaries after learning the trust has become irrevocable, and separately requires notice within 60 days after the trustee accepts the trusteeship. If a beneficiary's name or address is unknown, the trustee must publish notice in a newspaper of general circulation in the county where the trust property is located once a week for 3 successive weeks (§ 14.5-813).

Georgia

The Revised Georgia Trust Code of 2010 (Title 53, chapter 12) requires the trustee to notify qualified beneficiaries of the trust's existence and of the trustee's name and mailing address within 60 days after an irrevocable trust is created or a revocable trust becomes irrevocable (O.C.G.A. § 53-12-242). The clock runs from that event, not from when the trustee learns of it. A claim against a trustee is barred 2 years after the beneficiary receives a written report that adequately discloses it (O.C.G.A. § 53-12-307).

A trust signed in one place and administered in another raises a choice-of-law question that should be answered before the first notice goes out. Aaron Bedy, who is admitted in Florida and Georgia, handles trust administration in both.