Some people may think estate planning consists only of writing a Last Will and Testament. However, trusts are commonly used in estate planning. Many people may have heard about revocable trusts or special needs trusts. Some individuals may have already set aside some of their property in a trust on the advice of their Palm City estate planning attorney. One trust that may be a mystery to most people is the directed trust.
A trust document allows an individual or individuals to transfer property into a trust. Some reasons to use this arrangement are asset protection or reduction of estate taxes. Trusts have a grantor who gives a trustee the right to manage the trust on behalf of one or more beneficiaries. The trustee has a fiduciary duty to act in the best interests of the beneficiaries while following the terms of the trust document.
A directed trust, however, splits the trustee responsibilities between more than one trustee. The directing party or directing trustee takes on some of the tasks, but assigns others to a directed trustee, also known as an excluded fiduciary. The directing party advises the excluded fiduciary on what actions to take.
An individual might want to maintain control of the assets placed in trust, like an investment or business interest. Without giving up control, the directed trustee assigns the excluded trustee duties like administration, oversight, and distributions to beneficiaries.
Sometimes a corporate entity might be unwilling to manage certain assets. This might occur when the trust consists primarily of an interest in a company or family-owned business.
Florida statutes set out requirements for trusts and trustees, including directed trustees. In some cases, a directed trustee is not held liable for actions taken except in cases of willful misconduct.
We look forward to reviewing your estate plan with you. Attorney John Mangan is board certified in Wills, Trusts & Estates by the Florida Bar. Please call us at 772-218-0480 or use our Contact Form to set up an appointment. We help clients throughout Florida, including Stuart, Palm City, Hobe Sound, Jupiter, and Port St. Lucie.