What is a trust agreement?

A trust agreement is a legal document that creates a trust – a legal relationship in which one person, known as the trustee, holds property for the benefit of another person, known as the beneficiary. In the trust agreement, the trustee is identified, the terms of the trust are outlined (including what assets are being held in trust and the amount of money or property, if any, that the beneficiary is entitled to during their lifetime), and the instructions for how the trust is to be administered. In Florida, trust agreements are subject to the Florida Trust Code, which sets out the legal duties of trustees and provides rules and regulations governing trust administration. Generally speaking, when a trust agreement is created, a trustee is appointed to manage the trust assets in accordance with the terms of the trust agreement. The trustee is given the power to make decisions, buy and sell assets, and invest money as necessary for the benefit of the beneficiary. By creating a trust, the person creating the trust, known as the grantor, can ensure that the beneficiary receives the assets in a manner that is both secure and tax-efficient.

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What is a trust agreement?

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