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Introduction to the Florida Trust as a Planning Tool

Updated: Jun 30, 2021

J. Rubens Scharlack | Scharlack

A trust is a fiduciary relationship capable of separating the positive aspects of the property from its negative aspects.

A trust is a fiduciary relationship capable of separating the positive aspects of the property (use and perception of the economic benefit) from its negative aspects (duty of administration, custody and maintenance). This relationship begins when a person (settlor or grantor) transfers the legal ownership (legal title) of assets or rights to another person (trustee) for the benefit of one or more third parties (beneficiaries, who own equitable title).

The trust can take many forms and does not need a written tool to exist, as long as it can be proven in some way . However, the detailed elaboration of a written tool is recommended. It is important that the grantor makes it clear that he / she is transferring ownership of his assets to trustee in the confidence (in trust) that they will look after it for the benefit of the beneficiaries, in addition to all other aspects of administration, custody and destination of your assets. Trusts can be inter-living or wills. They can also be revocable or irrevocable.

Florida's common law allows even an irrevocable trust to be modified or extinguished if the grantor and all beneficiaries agree. Peck v. Peck, 133 So. 3d 587, 587, 2014 Fla. App. LEXIS 2571, * 1, 39 Fla. L. Weekly D 429, 2014 WL 768827. The standard interpretation of trust rules by the Floridian courts is the best interest of the beneficiaries (best interest of the beneficiaries).

O trust pode se dar de várias formas e não precisa de instrumento escrito para existir

The trust is a versatile planning tool. Among other goals, a trust can be used to plan the succession of a family , the emigration of a person or the protection of family assets against creditors or against the prodigality or debts of a child. Brazilian law does not recognize trusts and therefore its use as a planning tool must take this into account to avoid surprises in the future.

Succession planning involving trusts must generally obey the legitimate one. In the tax area, trusts must be designed and structured carefully, and with attention to both the United States and Brazil's rules , in order to achieve a balance between tax efficiency and the flexibility usually desired in the trust. Careful alignment with the wishes and intentions of grantor is essential.

Until the advent of the 2016 special exchange and tax regularization regime (RERCT), the Federal Revenue Service (RFB) and the Central Bank of Brazil (Bacen) did not have guidance on how to declare a trust abroad. In the revocable trust, it is grantor who must declare the assets that make up the trust , since he still has the power to fully revert them to himself. In the irrevocable trust, the Brazilian beneficiaries are declaring.


J. Rubens Scharlack

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