In 2022, Florida legislators passed two significant bills updating state laws on private family trusts. These laws, SB 1368 and SB 1304, make Florida one of the most appealing states in the country for families who wish to protect their assets and pass them down from one generation to the next.
However, for these changes to benefit your family, you must understand how they increase your rights to privacy and asset protection. Below, we summarize how Florida trust laws have changed and the impact of new trust regulations in the state.
Updates to Florida Trust Laws
SB 1304 and SB 1364 significantly impact the ability of private family trusts to protect your assets. However, they accomplish this in very different ways.
Of the two, SB 1368 is more complex. First, it provides exemptions to Florida’s rule against perpetuities. For trusts created after December 31, 2000, in Florida, the bill altered the length of time a trust may exist from 90 years to now last for a period of up to 360 years. Additionally, after the implementation of SB 1368, a trust created on or after July 1, 2022, may now last for one thousand years before it must be dissolved, giving trusts a longer tax shield.
In addition, private family trust companies no longer need to provide as many details regarding their holdings to the beneficiaries of these trusts. SB 1368 permits the selection of a simplified form of periodic accounting if accounting records give sufficient notice of trust assets, debts, and transactions that occur within the accounting period. For irrevocable trusts, the bill only requires “the terms of the trust may permit for accounting to the qualified beneficiaries only at the termination of the trust; upon the removal, resignation, or other event resulting in a trustee ceasing to serve as a trustee; or upon demand of a qualified beneficiary or the representative of a qualified beneficiary.” Trusts can be explicitly set up to provide beneficiaries with support without informing them of its status unless these conditions are met, protecting its financial privacy.
SB 1304 further protects the privacy of family trusts by allowing all future court proceedings regarding private family trust companies to be sealed upon written notice to the court clerk. When they are involved in legal action, the court records are exempt from public records requirements in Florida. They are only subject to inspection if a certificate of public necessity is provided. As such, the entities’ finances are protected from public scrutiny. However, court records are still accessible by the settlor, fiduciary or beneficiary, or their attorney.
With the passage of this bill and SB 1368, Florida has become one of the most trust-friendly states in the nation.
Making the Most of Changes to Trusts in Florida
While new Florida trust laws are beneficial to families that have or wish to establish trusts, they are not retroactive. For example, the law permitting trusts to exist for a thousand years only applies to those established after the bill’s passage. Similarly, requirements to seal court records regarding family trust companies only apply to proceedings after the bill became law. You will need to update your family’s estate plans to make the most of the new regulations.
The best way to accomplish this without risking tax penalties or other financial consequences varies depending on your circumstances. It is in your best interest to speak with an experienced trust attorney in Florida before making any changes. After they have examined your current estate plan and trusts, they may recommend actions such as:
- Dissolving revocable trusts and reestablishing them so they are subject to the new laws.
- Changing the structure of a trust to that of a private family trust company.
- Altering the terms to better maintain your privacy.
Consult With Skilled Florida Trust and Estate Planning Attorneys
Changes to Florida laws have made trusts more effective than ever at protecting family assets and financial privacy. There has never been a better time to establish new estate plans to pass on assets to the next generation. If you are considering adding one to your estate plan, do not hesitate to get in contact with the experts at EPGD Business Law.Our proven associates have years of experience guiding families through developing trusts and estate plans that support their chosen goals. Learn more about how we can assist you in your claim by scheduling your consultation with our Miami trust and estate planning law firm today.