1 (813) 643-8000 HStitzel@StitzelLaw.com

Probate and Trusts

Howard Stitzel, III, Probate and Trusts Lawyer, Valrico, Brandon, Riverview, Plant City, Tampa, Gibsonton, Lakeland

What is a Trust?

A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a settlor, who transfers some or all of his or her property to a trustee. The trustee holds that property for the trust’s beneficiaries. Trusts have existed since Roman times and have become one of the most important innovations in property law.

An owner placing property into trust turns over part of his or her bundle of rights to the trustee, separating the property’s legal ownership and control from its equitable ownership and benefits. This may be done for tax reasons or to control the property and its benefits if the settlor is absent, incapacitated, or dead. Trusts are frequently created in wills, defining how money and property will be handled for children or other beneficiaries.

The trustee is given legal title to the trust property, but is obligated to act for the good of the beneficiaries. The trustee may be compensated and have expenses reimbursed, but otherwise must turn over all profits from the trust properties. Trustees who violate this fiduciary duty are self-dealing. Courts can reverse self dealing actions, order profits returned, and impose other sanctions.

The trust is governed by the terms under which it was created. In most jurisdictions, this requires a contractual trust agreement or deed

What is Probate?

Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries.

The basic job of administration and accounting for assets must be done whether the estate is handled by an executor in probate or whether probate is avoided because all assets were transferred to a living trust during lifetime or jointly owned. In planning your estate, more important than minimizing probate is minimizing the real issues that can make probate difficult, such as lawsuits by heirs.

Probate & Trust Terms

  • Appointer: This is the person who can appoint a new trustee or remove an existing one. This person is usually mentioned in the trust deed.
  • Appointment: In trust law, “appointment” often has its everyday meaning. It is common to talk of “the appointment of a trustee”, for example. However, “appointment” also has a technical trust law meaning, either:
    the act of appointing (i.e. giving) an asset from the trust to a beneficiary (usually where there is some choice in the matter—such as in a discretionary trust); or
    the name of the document which gives effect to the appointment.
    The trustee’s right to do this, where it exists, is called a power of appointment. Sometimes, a power of appointment is given to someone other than the trustee, such as the settlor, the protector, or a beneficiary.
  • As Trustee For (ATF): Legal term used to imply that an entity is acting as a trustee.
  • Beneficiary: A beneficiary is anyone who receives benefits from any assets the trust owns.
  • In Its Own Capacity (IIOC): Refers to the fact that the trustee is acting its own.
  • Protector: A protector may be appointed in an express, inter vivos trust, as a person who has some control over the trustee—usually including a power to dismiss the trustee and appoint another. The legal status of a protector is the subject of some debate. No-one doubts that a trustee has fiduciary responsibilities. If a protector also has fiduciary responsibilities then the courts—if asked by beneficiaries—could order him or her to act in the way the court decrees. However, a protector is unnecessary to the nature of a trust—many trusts can and do operate without one. Also, protectors are comparatively new, while the nature of trusts has been established over hundreds of years. It is therefore thought by some that protectors have fiduciary duties, and by others that they do not. The case law has not yet established this point.
  • Settlor: This is the person who creates the trust.
  • Trust Deed: A trust deed is a legal document that defines the trust such as the trustee, beneficiaries, settlor and appointer, and the terms and conditions of the agreement.
  • Trust Distributions: A trust distribution is any income or asset that is given out to the beneficiaries of the trust.
  • Trustee: A person (either an individual, a corporation or more than one of either) who administers a trust. A trustee is considered a fiduciary and owes the highest duty under the law to protect trust assets from unreasonable loss for the trust’s beneficiaries.