Funding a Florida Irrevocable Trust: What Goes In, and What Stays Out

Meet Gloria: a trust is only as good as its funding

Gloria is 72 and lives in DeLand. She is a composite client, not a real person, but her situation is one I see often. After working through her options in the Medicaid planning process, Gloria and her attorney decided an irrevocable trust made sense for part of her estate. An irrevocable trust is one the person who creates it cannot simply revoke or amend on their own, and that restriction is exactly what allows it to move assets out of the person's countable estate for creditor, Medicaid, or tax purposes.

Signing the trust document, though, is only step one. A trust is an empty container until assets are actually retitled into it, a process called funding. Gloria came to her funding meeting with a list: a brokerage account, a rental duplex, her homestead, an IRA, a small life insurance policy, her car, and the contents of her house. Some of those belonged in the trust. Some did not, and one of them (the IRA) would have caused real financial harm if she had transferred it directly.

Brokerage accounts and cash: yes, retitle them

Liquid investment accounts are usually the easiest and safest assets to fund into an irrevocable trust. Gloria's brokerage account was retitled from her individual name into the name of the trust, with the trustee named as the account holder. Her brokerage firm required a copy of the trust's key pages (the trustee designation, powers, and signature page) along with a new account application.

• Bank and brokerage accounts are retitled by opening a new account in the trust's name or changing the titling on the existing account.
• Once retitled, the trustee, not Gloria personally, controls deposits, withdrawals, and investment decisions, which is the whole point of an irrevocable trust.
• Dividends and interest earned inside the trust may be taxable to the trust or to Gloria depending on how the trust is drafted (as a grantor trust or not), a distinction worth discussing with a Florida attorney or CPA before funding.

Cash accounts are a good starting point precisely because retitling is simple and there is no separate transfer tax involved.

The rental property: yes, but by deed, and doc stamps usually apply

Gloria's rental duplex went into the trust by a deed, executed by Gloria as the current owner and recorded in the official records of Volusia County. This is different from a brokerage account: real property requires a properly drafted and recorded deed naming the trustee as the new titleholder.

Here is the part that surprises a lot of clients. Deeding property into a revocable trust where the person creating the trust keeps full beneficial ownership is generally exempt from Florida documentary stamp tax. But deeding property into an irrevocable trust is treated differently. Under Florida's administrative rules, a deed to a trustee is taxable to the extent it actually transfers beneficial ownership of the property and there is consideration for the transfer. Because an irrevocable trust changes who has the beneficial interest (Gloria gives up the ability to simply take the property back), documentary stamp tax often applies to that deed, calculated the same way it would be for any other transfer of real estate.

The homestead: maybe, and only with real caution

Gloria's home in DeLand is her Florida homestead, and homestead property gets special treatment under both the Florida Constitution and Florida statutes, covering everything from creditor protection to property tax assessment limits to who can inherit it. Moving a homestead into an irrevocable trust is sometimes done for Medicaid or estate planning reasons, but it has to be handled carefully.

• Florida's homestead creditor protection and Save Our Homes tax cap can be affected by how a homestead transfer into trust is structured, so this is not a do-it-yourself deed.
• Florida law restricts who a homestead can be devised to if the owner is survived by a spouse or minor child, and those restrictions can interact with a trust transfer in ways that need to be checked against the owner's family situation.
• Certain irrevocable trust structures are specifically designed to preserve homestead protections and property tax treatment while still accomplishing Medicaid or asset protection goals, but they must be drafted with that purpose in mind from the start.

Because Gloria's homestead is not a countable asset for Medicaid purposes in the way other assets are, her attorney reviewed whether moving it into the irrevocable trust was even necessary for her goals, or whether it made more sense to leave it out and rely on the homestead's own built-in protections.

The IRA: no, and this is where mistakes get expensive

Gloria's IRA stayed out of the trust entirely, and this is one of the most important rules in trust funding. An IRA is not an asset you retitle into a trust the way you would a bank account or a house. Transferring ownership of an IRA to an irrevocable trust during your lifetime is treated by the IRS as a full distribution of the account, meaning the entire balance becomes taxable income in that year, all at once, with no ability to undo it.

For Gloria, the IRA simply stayed in her own name, with her beneficiary designations reviewed and updated to reflect her overall estate plan. The trust and the IRA can work together as part of one plan without the IRA ever touching the trust's ownership.

Life insurance, the car, and personal property

Gloria's small life insurance policy raised a similar, though less severe, issue. Life insurance is usually handled through beneficiary designation rather than by transferring ownership of the policy into the main irrevocable trust. When someone wants a policy fully outside their taxable estate and controlled by a trust, Florida attorneys often use a separate, specialized trust built just for that purpose, sometimes called an irrevocable life insurance trust, rather than folding the policy into a broader trust holding investments and real estate.

Her car and household furniture were left out of the trust altogether. Vehicles have their own Florida titling rules and modest value, personal property is hard to itemize meaningfully, and neither typically carries the creditor exposure or estate planning weight that makes funding worth the paperwork. These are usually addressed through a simple pour-over will or a separate personal property memorandum instead.

Gloria's funding list, once finalized, looked like this:

• Brokerage account: retitled into the trust's name.
• Rental duplex: deeded into the trust, with documentary stamp tax paid on recording.
• Homestead: held back for now, pending further review of Medicaid and homestead protection strategy.
• IRA: left in Gloria's individual name, with the trust or another beneficiary named on the account, not as owner.
• Life insurance: beneficiary designation reviewed; a separate insurance trust considered for later.
• Car and personal property: left out of the trust, covered by her will instead.

The funding letter and why follow-up matters

Once deeds are recorded and accounts are retitled, a careful attorney sends what is often called a funding letter: a written summary confirming which assets were moved into the trust, which were left out and why, and what still needs attention. Gloria's letter listed her retitled brokerage account and recorded deed, noted that her IRA and life insurance would stay titled individually with updated beneficiary designations, and flagged the homestead question for a follow-up conversation.

Funding is not a one-time event. If Gloria opens a new account, buys another property, or receives an inheritance, those assets need to be evaluated and, if appropriate, added to the trust the same careful way. An unfunded or partially funded irrevocable trust does not protect assets that were never actually transferred into it, no matter how well the trust document itself is written.

Sources

• The Florida Bar, The Irrevocable Trust in Florida (Consumer Pamphlet), December 23, 2025
• Alper Law, Irrevocable Trusts as an Asset Protection Tool in Florida, August 2026
• Team Renick, Who Is Exempt From Paying Documentary Stamp Tax in Florida?, September 25, 2026
• The Florida Bar Journal, Florida Irrevocable Grantor Homestead Trust: Having Your Cake and Eating it Too, Second Course, July 11, 2024
• Rosenberg Law Firm, Trust Funding 101: Retitling Assets & Beneficiaries, May 12, 2026

This article is for general informational purposes only and does not constitute legal advice, nor does reading it create an attorney-client relationship. Florida estate, elder, probate, and real estate law are fact-specific and change over time. Consult a licensed Florida attorney about your individual circumstances. Arthur Simpson, Esq. is licensed to practice law in the State of Florida. Attorney advertising.