In July 2021, Florida adopted the Florida Uniform Directed Trust Act (FUDTA), creating a formal legal framework for a concept estate planning professionals have used informally for years. The Florida Directed Trust Act introduces a new fiduciary role — the trust director — and clarifies how responsibility and liability are divided when someone other than the trustee is given authority over specific trust decisions.
If you are creating a trust, administering one, or are a beneficiary of a trust governed by Florida law, understanding the Florida Directed Trust Act is important.
What Is a Directed Trust?
A directed trust is a trust whose terms grant a specific power of direction to someone other than the trustee. Under a standard revocable trust, the trustee is responsible for all decisions — investments, distributions, and administration. A directed trust splits these responsibilities.
The person who receives this authority is called a trust director. Florida law defines a trust director as a person who is granted a power of direction by the terms of the trust, to the extent that power is exercisable while the person is not serving as the trustee (Fla. Stat. 736.0103(25)).
Why Would You Use a Directed Trust?
The primary reason to create a directed trust under the Florida Directed Trust Act is to give the trust creator (the grantor) more control over how different aspects of the trust are handled by assigning specific responsibilities to people with the right expertise.
For example:
- A grantor may want their accountant or financial planner to manage investment decisions, rather than leaving them to a corporate trustee.
- A grantor may want a neutral third party to handle distributions to beneficiaries, reducing potential family conflict.
- A grantor may want to separate administrative duties from investment management to ensure each function is handled by the most qualified person.
While the trustee retains overall responsibility for administering the trust and fulfilling fiduciary duties to beneficiaries, the trust director handles only the specific powers granted in the trust instrument. This division of responsibilities can lead to better outcomes for beneficiaries and more effective asset protection.
How the Trustee and Trust Director Work Together
The Florida Directed Trust Act requires the trustee and trust director to coordinate. Specifically, the trustee has a duty to inform, monitor, and advise the trust director to the extent that the information is reasonably related to the trust director’s power.
The statute also addresses liability between these roles. Under Fla. Stat. Section 736.141, if either the trustee or the trust director acts in reliance on information provided by the other, they are not liable for a breach of trust resulting from that reliance — unless they engaged in willful misconduct.
This liability framework gives both parties clarity about their responsibilities and protections, which was one of the primary goals of the Florida Directed Trust Act.
When Does the Florida Directed Trust Act Apply?
The statute is specific about when directed trusts fall under its jurisdiction. All three conditions must be met:
- The trust must expressly provide for a power of direction in its terms.
- The principal place of administration must be in Florida. For trusts created before July 1, 2021, the Act applies to decisions made after that date.
- The trust director must be located in Florida, either as a resident or through their principal place of business (Fla. Stat. Section 736.1403).
Is the Concept Actually New?
The concept of granting specific powers to someone other than the trustee is not new. Estate planning professionals have been naming business trustees, investment managers, and trust protectors within trust instruments for years. What the Florida Directed Trust Act provides is a formal statutory framework that codifies these practices into law.
The Act clarifies where liability falls when decisions are made, establishes the duties each party owes, and gives courts a clear framework for resolving disputes. For anyone creating or modifying a trust under Florida law, the FUDTA provides important guidance on how to structure these roles properly.
Talk to an Attorney About Directed Trusts
The Florida Directed Trust Act adds a powerful tool to estate planning in Florida — but it also adds complexity. The division of responsibilities between trustee and trust director must be carefully drafted to avoid gaps in authority, unintended liability, or conflicts between the parties.
An experienced estate planning attorney can help you determine whether a directed trust is right for your situation and ensure that the trust instrument clearly defines each party’s role and responsibilities.
Schedule a complimentary consultation to discuss whether the Florida Directed Trust Act can benefit your estate plan.
