Grantor Trusts
A grantor trust is taxed to the grantor rather than the trust or beneficiaries because the grantor retains certain powers (IRC §§671-679). Revocable living trusts are the most common grantor trusts, widely used for Florida real estate.
When a Trust Is a Grantor Trust
- Power to revoke the trust
- Power to control beneficial enjoyment
- Administrative powers (asset substitution)
- Power to add/remove beneficiaries
- Retained income interests
Florida Real Estate Benefits
- Avoids probate while grantor manages property
- Transfers not taxable (no gift tax, minimal doc stamps)
- Stepped-up basis at grantor's death
- Homestead exemption preserved
- Protected from probate delays and costs
Tax Advantages
Grantor pays trust income taxes (tax-free growth for beneficiaries). No capital gains on grantor-trust transactions. Can own S corporation stock.
Related Terms
- Estate Planning — Trust-based planning
- Equity — Property equity in trust
- Evidence of Title — Trust-held property
Barnes Walker Estate Planning
Barnes Walker's attorneys establish grantor trusts for Florida real estate and estate planning. Request a legal inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 736 (Florida Trust Code)
The Florida Trust Code governs the creation, modification, and administration of trusts, including trustee duties, beneficiary rights, and trust termination.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC