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Florida Directed Trust: Keep Control of the Asset That Matters

You should not have to hand a bank trustee control of your family business to put it in a trust.

A directed trust splits the job. A person you choose keeps control of the investments (the business, the stock), while a trustee handles the rest. Florida’s law makes those roles clean.

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Quick Overview

A Florida directed trust splits the trustee’s job so a person you choose, the trust director, keeps control of specific assets like a closely-held business or a concentrated stock position, while a trustee handles administration. Florida adopted the Uniform Directed Trust Act in 2021, defining each role clearly, and out-of-state families can use it with a Florida trustee. It comes down to whether your trust holds an asset the family wants to keep controlling.

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Below, we walk through the 4 issues that decide whether this is the right move for you. Jump to any one.

  1. The Short Answer One trustee normally does everything, a problem when the trust holds a business the family knows better than any trustee. A directed trust splits that job between a trust director and a directed trustee.
  2. Why Florida’s Directed Trust Law Stands Out Florida’s 2021 Uniform Directed Trust Act defines the director’s powers and limits the trustee’s liability for following proper direction, why out-of-state families use it with a Florida trustee.
  3. The Family-Business Use Case You should not have to let a bank trustee run the family company. A family member serves as trust director over the business and keeps making the calls, while the trustee handles the rest.
  4. When You Need It, and When You Do Not Worth the added structure when a trust holds a business, concentrated stock, or real estate the family wants to control. For cash and ordinary investments, a standard trustee is usually fine.

That’s the quick version. The details below are what decide your situation, and where the costly mistakes hide.

The Short Answer

In an ordinary trust, one trustee does everything, managing the investments, making the distributions, and handling the paperwork. That is a problem when the trust holds something the family knows better than any trustee would, like a closely-held business or a concentrated stock position. A directed trust fixes it by splitting the trustee’s job. A person you choose, called a trust director, keeps control of specific decisions (usually the investments), while a directed trustee handles administration and follows that direction. Florida’s modern law makes this clean and reliable.

Why Florida’s Directed Trust Law Stands Out

Florida adopted the Florida Uniform Directed Trust Act in 2021, and it is one of the better frameworks in the country. It clearly defines the trust director’s powers and the fiduciary duties they owe, and it limits the trustee’s liability for properly following the director’s instructions. In states with vaguer rules, these split roles create confusion and risk over who is responsible when something goes wrong. Florida spells it out. That clarity is exactly why advisers and families in other states will set up a directed trust under Florida law, with a Florida trustee, and we often build that piece alongside the family’s home-state attorney.

The Family-Business Use Case

This is where a directed trust earns its keep. Suppose parents want their company held in trust for the next generation, for protection and continuity. The hard question is always the same. Do you really want an outside trustee making decisions about the business? With a directed trust, the answer is no, you do not have to. A family member or trusted adviser serves as trust director over the business interest and keeps making the business calls, while the trustee handles distributions, accounting, and compliance. The business stays in the family’s hands and still gains the trust’s protection. It is the cleanest way to keep a closely-held business in the family across generations, especially paired with a dynasty trust.

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When You Need It, and When You Do Not

A directed trust is worth the added structure when a trust will hold a closely-held business, a concentrated stock position, real estate, or another asset the family wants to keep controlling. For a trust holding cash and ordinary marketable investments, a standard trustee is usually fine and the extra roles are unnecessary. As with every tool we use, we will tell you honestly whether your situation calls for it. It is one option within the broader irrevocable trust toolkit, and if an existing irrevocable trust lacks these roles, Florida’s trust decanting law can often move it into a modern directed structure.

Frequently Asked Questions

What Is a Directed Trust?

It is a trust that splits the trustee’s job into separate roles. A "trust director" (sometimes called an adviser or protector) holds power over specific decisions, most often how the trust’s investments are managed, while a "directed trustee" handles administration and follows that direction. In a normal trust, one trustee does everything; in a directed trust, the family can keep someone they choose in charge of, say, the family business or a stock position, while a professional handles the rest.

Why Would I Want a Directed Trust?

Because sometimes the best person to manage an asset is not the best person to be trustee. If a trust will hold a closely-held family business, a concentrated stock position, or real estate the family knows intimately, a directed trust lets the family (or a trusted adviser) keep control of those investment decisions, while a corporate or professional trustee handles distributions, accounting, and compliance. You get professional administration without handing over control of the asset that matters most.

How Is Florida’s Directed Trust Law Different?

Florida adopted the Florida Uniform Directed Trust Act in 2021, which gives a clean, modern framework. It clearly defines the trust director’s powers and fiduciary duties, and it limits the directed trustee’s liability for following proper direction. That clarity matters. Some states leave these roles fuzzy, which creates risk and finger-pointing; Florida spells out who is responsible for what, which is why families and advisers nationwide use a Florida directed trust.

Is a Directed Trust Good for a Family Business?

It is one of the best tools for it. Putting a closely-held business into a trust normally raises a hard question. Do you really want a bank trustee making decisions about the company? A directed trust solves that. A family member or trusted adviser serves as the trust director over the business interest and keeps making the business calls, while the trustee handles everything else. The business stays in the family’s hands while still gaining the trust’s protection and continuity.

Can Someone Out of State Use a Florida Directed Trust?

Yes. With a Florida trustee, a family living elsewhere can use Florida’s directed-trust law, often a meaningful upgrade over their home state’s framework. This is common in sophisticated planning. The family keeps investment control through the trust director, a Florida trustee provides administration, and we coordinate with the family’s home-state attorney on the rest of the plan.

Does the Trust Director Have Legal Duties?

Yes. Under Florida law a trust director generally acts as a fiduciary, meaning they owe duties to the beneficiaries when exercising their power, just as a trustee does for the parts they control. The Act defines those duties and also protects a directed trustee who properly follows the director’s instructions. Everyone’s role and responsibility is defined, which is the point.

How Much Does a Directed Trust Cost?

It is part of a larger custom trust design, so we quote it at the consult. A directed-trust structure is worth it when a trust will hold a business, a concentrated position, or another asset the family wants to keep controlling. For a straightforward trust holding cash and marketable investments, the added structure usually is not needed, and we will say so.

Common Situations

The family company. Parents want their business held in trust for their children but do not want a bank deciding how the company is run. A son serves as trust director over the business; a professional trustee handles the rest. The family keeps control, the business gains protection.

The concentrated stock position. A founder holds a large position in one company and wants it in trust without a trustee diversifying it away. A directed trust lets an investment adviser the founder trusts keep that decision, while the trustee administers the trust.

The out-of-state family. A family in a state with a weak directed-trust framework uses Florida’s clearer law, with a Florida trustee, and we coordinate with their home-state attorney on the full plan.

The rental properties the daughter runs. A widowed mother owns several Florida rentals her daughter has managed for years, from tenants to repairs. The mother wants the properties held in trust for continuity, but not a trustee second-guessing decisions her daughter makes better than anyone else could. In the directed trust, the daughter serves as trust director over the real estate and keeps running it, while the trustee handles the accounting, distributions, and compliance.

Sources of Law

What Business Families Ask About Control

In 14 years of law practice, the directed trust answers a question families ask long before they know it has a name, which is how to put the company in a trust without handing a bank the steering wheel.

A common question I hear is, "Can my son keep running the business if it is in the trust?" Yes, if the document splits the roles. One person directs the investment in the company, another handles the administration, and Florida law says so expressly rather than leaving it to be argued.

What matters is naming the roles rather than assuming them. A trustee who is told what to do without the statute behind it is a trustee who is still liable for the outcome, and their lawyer will tell them so at the worst moment.

Practice pointer. Name each director, define the scope of what they direct, and say expressly that they hold that power as a fiduciary. The protection for the trustee depends on the document doing all three.

Avoid creating one to escape a corporate trustee you simply do not like. The structure adds parties and adds cost, and where the real problem is the choice of trustee, the cheaper fix is to change the trustee.

Kevin D. Klagge, Esq., admitted in Florida since 2012. Any case described is a decision of a court rather than a matter handled by this firm. General information rather than advice on your situation.

Updated on September 1, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. General information about Florida law, not legal advice, and no attorney-client relationship is created. Whether a directed trust fits depends on your specific facts. Do not send confidential information until we have agreed to represent you.

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