Florida Directed Trust: Keep Control of the Asset That Matters

The Short Answer

In an ordinary trust, one trustee does everything, managing the investments, making the distributions, and handling the paperwork. One trustee doing everything 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. The Act 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 the roles out. The 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

A family business 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. A directed trust is the cleanest way to keep a closely-held business in the family across generations, especially paired with a dynasty trust.

What Is a Trust Protector?

A trust protector is a person the trust document gives a specific power over the trust while that person is not serving as trustee, such as the power to amend the trust, to direct its investments, or to decide when a beneficiary receives money. Florida’s directed trust law, in force since July 1, 2021, calls that person a trust director and treats the role the same way whether or not the document uses the word protector.

The powers come only from the document. Florida law describes a power of direction as including power over the investment, management or distribution of trust property, a power to amend the trust instrument or terminate the trust, and power over other matters of trust administration. A protector also holds any further power appropriate to carry out an express one, and two or more protectors with a joint power act by majority unless the trust says otherwise. A person called a protector in a trust that grants no powers holds none.

Two powers people associate with a protector sit outside the Act unless the trust expressly brings them in by reference. The first is the power to appoint or remove a trustee or another trust director, and the second is a power of appointment over who ultimately receives the property. A trust can still grant both, and the trust’s own terms then govern how they work. The Act also leaves out the settlor’s own powers over a trust while it is still revocable.

A protector who exercises a power of direction carries the same fiduciary duty and liability as a trustee in the same position, and the trust can loosen or tighten those duties to the same extent it could for a trustee. The directed trustee must take reasonable action to follow the protector’s direction and is not liable for doing so, unless following the direction would be willful misconduct. Neither one has to monitor the other unless the trust requires it. By accepting the role, a protector agrees to answer in Florida’s courts on anything connected to that role.

Any person the trust names can serve, including a beneficiary and even the person who created the trust, and the tax consequences of giving powers to either one need separate review. Families most often choose a relative or a trusted adviser who knows the asset the family wants to keep controlling. A protector who lives in Florida, or whose principal place of business is in Florida, lets the trust validly name Florida as its place of administration. The person accepts or declines the role under the same rules that apply to a trustee.

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. A directed trust 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

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

• Fla. Stat. §§736.1401 (annotated) to 736.1416 (annotated): Florida Uniform Directed Trust Act (effective July 1, 2021), defining trust directors, their fiduciary duties, and directed-trustee protections. flsenate.gov (retrieved 2026-06-07)
• Trust protectors and trust directors: Fla. Stat. §736.0103 (annotated)(16) (power of direction includes investment, management or distribution, a power to amend or terminate, and other matters of administration) and (25) (a trust director whether or not so called, and whether or not a beneficiary or settlor); §736.1403 (annotated) (application from July 1, 2021; Florida place of administration where a director resides or has a principal place of business in Florida); §736.1405 (annotated)(2) (powers of appointment, powers to appoint or remove a trustee or director, and a settlor’s powers over a revocable trust excluded unless the trust refers to the part); §736.1406 (annotated) (powers only as granted, further appropriate powers, majority rule); §736.1408 (annotated) (director’s fiduciary duty as a trustee in a like position); §736.1409 (annotated) (directed trustee complies and is not liable, except for willful misconduct); §736.1411 (annotated) (no duty to monitor); §736.1415 (annotated) (accepting appointment submits the director to Florida jurisdiction); §736.1416(1)(j) (acceptance or declination as for a trustee). (retrieved 2026-10-01)
• Florida Trust Code, Fla. Stat. ch. 736. Florida has no state income or estate tax.

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 October 1, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. 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.