A living trust in Florida costs more than a will, but a will alone cannot stop an ex-spouse from becoming your child's guardian over a $15,000 inheritance.
Does a revocable living trust in Florida avoid probate? Only the assets actually retitled into it, and setting one up costs a few thousand dollars more than a will, money that pays off only if every account and deed gets moved into the trust's name.
For a divorced parent, Florida law will not let a child hold more than $15,000 outright, and above that a court appoints a guardian of the property. Both divorced parents remain natural guardians under the state's guardianship statute, so a will alone gives an ex-spouse standing to be that guardian. A separate trust share for the child, with a trustee chosen now, keeps that court out of it.
Moving a house into the trust does not let the mortgage lender call the loan due, and the homestead exemption and the Save Our Homes cap survive the move, as long as the trust names the homeowner as a lifetime beneficiary. Do revocable living trusts pay taxes? No, the income is reported on the grantor's own return while the grantor is alive. The full guide on funding a trust in Florida lives at StepUpLaw.
Transcript
A woman in Minnesota wrote in this week. She is in her forties, divorced, with a thirteen year old. She owns a home with two hundred fifty thousand dollars of equity and a hundred fifty thousand dollar mortgage, plus a pension and an IRA. She wants to know what a living trust actually costs her, and what happens when she retitles the house. She lives in Minnesota, so I will answer it the way I would for a Florida client with the same facts, because the traps she is worried about are Florida traps too.
Two questions decide this, and they are not the same question. The first is what happens to the house on the day the deed moves into the trust. The second is what already happens to her daughter’s inheritance if she never sets up a trust at all, and that second question is the one most divorced parents never ask until it is too late.
Start with the house, because that is the specific thing she asked about. A federal law from 1982, the Garn-St Germain Act, tells a mortgage lender it cannot call a loan due just because the homeowner moved the house into a revocable trust, as long as she remains a beneficiary of that trust and keeps living there. The lender cannot use the transfer as an excuse to accelerate the loan or force a refinance. The practical step is telling the homeowner’s insurance carrier so the policy lists the trust, not telling the mortgage company something it already has no right to act on.
Property taxes work the same way, with one condition attached. Florida law says a person who holds a beneficial interest for life under a trust still holds what the statute calls equitable title, and that is the ownership the homestead exemption runs on. The Save Our Homes cap, which limits the annual increase in the taxable value to three percent, rides on that same exemption and survives the move too. The condition is that the trust document has to actually say she keeps that lifetime beneficial interest. Generic trust language that skips that sentence is how a homeowner loses the exemption without meaning to.
Creditor protection is the one place Florida still carries an open question. A 2001 bankruptcy court, in a case called Bosonetto, held that a homestead placed in a living trust was not owned by a natural person and lost its constitutional protection from a forced sale. Florida courts moved away from that reasoning in the years after, and the legislature passed a statute in 2021 to clean up the ordinary trust language that caused the problem. But the treatise every Florida estate lawyer studies says plainly that Bosonetto was never directly overruled, only abandoned in practice. For a homeowner whose main goal for the house specifically is skipping probate, a lady bird deed sidesteps that question entirely. It leaves the house titled in her own name for her whole life, and names the trust as the one who receives it when she dies, so the house still avoids probate without ever raising the argument that started with Bosonetto.
Now the cost, because it is a real downside and people usually hear the wrong version of it. A trust costs more up front than a will, commonly a few thousand dollars, because the document is longer and the plan only works if every account and every deed actually gets retitled into the trust’s name. Anything left outside the trust when she dies does not skip probate. A pour-over will catches it, but catching it means sending it through probate first, which is the exact result the trust was supposed to prevent. The real cost of a trust is not the legal fee. It is the follow-through of actually funding it.
Here is the part that answers her real worry, the one about her ex. Without a trust, if she dies and leaves money to her daughter by will, by a beneficiary form on the IRA, or by nothing at all, Florida law will not let a thirteen year old simply hold more than fifteen thousand dollars outright. Above that amount, a court has to appoint a guardian of the property. And under Florida’s guardianship statute, when divorced parents share parental responsibility, both of them remain the child’s natural guardians. That means her ex has standing to be that guardian, or at minimum has to be notified and heard on who is. A will alone does not keep him out. It is the one fact that decides this whole question, and most parents in her position never hear it stated that plainly.
A trust built correctly solves it, and not through the house at all. The fix is a separate share for the daughter inside the trust, one that never distributes to her outright. The trustee who manages that share is someone the mother names now, while she is choosing with a clear head, and it does not have to be the ex and does not have to be a court’s pick. Because the money belongs to the trust and not to the child, no guardian of the property is ever triggered. The trustee holds it and pays for the daughter’s health, education, and support under the terms the mother wrote, until whatever age or ages she chooses for the rest to go to her outright.
One more honest point belongs here. Once that share becomes irrevocable at her death, Florida law requires the trustee to send an accounting to the daughter at least once a year, and a trustee who breaches that duty can be removed and sued for what is missing. That protection is not automatic. Someone has to read the accounting and act on it, which is why the choice of trustee still matters more than the document. If there is no family member she trusts completely with that job, a bank trust department or a professional fiduciary can serve alone or alongside one, as a check on each other.
Here is what to do this week. Pull up the beneficiary forms on the pension and the IRA today, because those pay out directly to whoever is named on them, trust or no trust, and if her daughter is still listed by name, that fifteen thousand dollar ceiling and the guardianship problem apply to those accounts too. Decide the house separately from the trust question. A lady bird deed handles the house on its own for far less than moving it into a trust. The trust itself should be built around that separate share for her daughter and a trustee who is not her ex, because that is the piece nothing else in her plan replaces. We build that document at this firm, and the funding, the deed, and the trustee choice all get worked out in the same conversation.
Read the full guide at stepuplaw.com/florida-revocable-living-trust
Related reading and listening at StepUpLaw
- Can You Put Your Florida Homestead in a Revocable Trust?
- How to Fund a Trust in Florida (Put Your House In)
- Protect Your Child’s Inheritance in Florida (2026)
- Episode 8, No Spouse, No Kids. Leaving Your Estate to Charity in Florida
- Episode 5, Lady Bird Deeds, the Medicaid Look Back, and Estate Recovery
- Episode 4, Lady Bird Deed or Living Trust for a Florida Home
Related guides
- Can You Put Your Florida Homestead in a Revocable Trust?
- How to Fund a Trust in Florida (Put Your House In)
- Protect Your Child’s Inheritance in Florida (2026)
Stepping Up is hosted 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. Episodes are general information about Florida law, not legal advice, and listening does not create an attorney-client relationship.
