A trust is a fiduciary relationship where a trustee is tasked with investing, protecting and managing property as well as the income that the property generates for a beneficiary. There can be more than one trustee and more than one beneficiary in a trust. The intent of the grantor, as expressed in the terms of the trust, controls the legal effect of the dispositions made in the trust.

Trusts generally fall into three categories: express, resulting and constructive. Express trusts, which are created with the property owner’s express intent of forming a trust, are subject of the Florida Trust Code.

There are three main parties to a trust: grantor; trustee; and beneficiary. The grantor is the creator of the trust. The trustee holds the legal interest or title to the trust property and accepts the office by accepting delivery of trust property or commencing to act in accordance with the terms of the trust instrument. The beneficiary possesses the power to enforce the trust instrument by virtue of holding equitable title to the property.

A trust involves a bifurcated transfer. The creator or “grantor” transfers property to a second-party trustee to be managed for the benefit of a third-party beneficiary. The trustee holds legal title, and the beneficiary holds equitable title. No consideration is required.

Trust property is divided between income and principal, and the equitable interest is divided between the beneficiary holding the possessory estate and the beneficiary holding the future interest. A mandatory trust requires the trustee to distribute all trust income. To protect the interests of the beneficiaries, a grantor may instead opt to create a discretionary trust, under which the trustee is given the power to distribute income at his or her discretion.

A trust can either be revocable or irrevocable. A revocable trust can be terminated by the grantor at any time, but an irrevocable trust typically cannot be terminated. Unless otherwise stated in the instrument, a trust will be presumed to be revocable. Absent language within the instrument prescribing the method of revocation, any action manifesting the grantor’s intent to revoke will suffice.