The Short Answer
In an ordinary trust, one trustee does everything: manages the investments, makes distributions, handles the paperwork. That is a problem when the trust holds something the family knows better than any trustee would, like a closely-held business or a concentrated stock position. A directed trust fixes it by splitting the trustee’s job. A person you choose, called a trust director, keeps control of specific decisions (usually the investments), while a directed trustee handles administration and follows that direction. Florida’s modern law makes this clean and reliable.
Why Florida’s Directed Trust Law Stands Out
Florida adopted the Florida Uniform Directed Trust Act in 2021, and it is one of the better frameworks in the country. It clearly defines the trust director’s powers and the fiduciary duties they owe, and it limits the trustee’s liability for properly following the director’s instructions. In states with vaguer rules, these split roles create confusion and risk over who is responsible when something goes wrong. Florida spells it out. That clarity is exactly why advisers and families in other states will set up a directed trust under Florida law, with a Florida trustee, and we often build that piece alongside the family’s home-state attorney.
The Family-Business Use Case
This is where a directed trust earns its keep. Suppose parents want their company held in trust for the next generation, for protection and continuity. The hard question is always the same: do you really want an outside trustee making decisions about the business? With a directed trust, the answer is no, you do not have to. A family member or trusted adviser serves as trust director over the business interest and keeps making the business calls, while the trustee handles distributions, accounting, and compliance. The business stays in the family’s hands and still gains the trust’s protection. It is the cleanest way to keep a closely-held business in the family across generations, especially paired with a dynasty trust.
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A directed trust is worth the added structure when a trust will hold a closely-held business, a concentrated stock position, real estate, or another asset the family wants to keep controlling. For a trust holding cash and ordinary marketable investments, a standard trustee is usually fine and the extra roles are unnecessary. As with every tool we use, we will tell you honestly whether your situation calls for it. It is one option within the broader irrevocable trust toolkit.
Frequently Asked Questions
What Is a Directed Trust?
It is a trust that splits the trustee’s job into separate roles. A "trust director" (sometimes called an adviser or protector) holds power over specific decisions, most often how the trust’s investments are managed, while a "directed trustee" handles administration and follows that direction. In a normal trust, one trustee does everything; in a directed trust, the family can keep someone they choose in charge of, say, the family business or a stock position, while a professional handles the rest.
Why Would I Want a Directed Trust?
Because sometimes the best person to manage an asset is not the best person to be trustee. If a trust will hold a closely-held family business, a concentrated stock position, or real estate the family knows intimately, a directed trust lets the family (or a trusted adviser) keep control of those investment decisions, while a corporate or professional trustee handles distributions, accounting, and compliance. You get professional administration without handing over control of the asset that matters most.
How Is Florida’s Directed Trust Law Different?
Florida adopted the Florida Uniform Directed Trust Act in 2021, which gives a clean, modern framework: it clearly defines the trust director’s powers and fiduciary duties, and it limits the directed trustee’s liability for following proper direction. That clarity matters. Some states leave these roles fuzzy, which creates risk and finger-pointing; Florida spells out who is responsible for what, which is why families and advisers nationwide use a Florida directed trust.
Is a Directed Trust Good for a Family Business?
It is one of the best tools for it. Putting a closely-held business into a trust normally raises a hard question: do you really want a bank trustee making decisions about the company? A directed trust solves that. A family member or trusted adviser serves as the trust director over the business interest and keeps making the business calls, while the trustee handles everything else. The business stays in the family’s hands while still gaining the trust’s protection and continuity.
Can Someone Out of State Use a Florida Directed Trust?
Yes. With a Florida trustee, a family living elsewhere can use Florida’s directed-trust law, often a meaningful upgrade over their home state’s framework. This is common in sophisticated planning: the family keeps investment control through the trust director, a Florida trustee provides administration, and we coordinate with the family’s home-state attorney on the rest of the plan.
Does the Trust Director Have Legal Duties?
Yes. Under Florida law a trust director generally acts as a fiduciary, meaning they owe duties to the beneficiaries when exercising their power, just as a trustee does for the parts they control. The Act defines those duties and also protects a directed trustee who properly follows the director’s instructions. Everyone’s role and responsibility is defined, which is the point.
How Much Does a Directed Trust Cost?
It is part of a larger custom trust design, so we quote it at the consult. A directed-trust structure is worth it when a trust will hold a business, a concentrated position, or another asset the family wants to keep controlling. For a straightforward trust holding cash and marketable investments, the added structure usually is not needed, and we will say so.
Common Situations
The family company. Parents want their business held in trust for their children but do not want a bank deciding how the company is run. A son serves as trust director over the business; a professional trustee handles the rest. The family keeps control, the business gains protection.
The concentrated stock position. A founder holds a large position in one company and wants it in trust without a trustee diversifying it away. A directed trust lets an investment adviser the founder trusts keep that decision, while the trustee administers the trust.
The out-of-state family. A family in a state with a weak directed-trust framework uses Florida’s clearer law, with a Florida trustee, and we coordinate with their home-state attorney on the full plan.
Sources of Law
- Fla. Stat. §§736.1401 to 736.1416: Florida Uniform Directed Trust Act (effective July 1, 2021), defining trust directors, their fiduciary duties, and directed-trustee protections. flsenate.gov (retrieved 2026-06-07)
- Florida Trust Code, Fla. Stat. ch. 736. Florida has no state income or estate tax.
Updated on June 7, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. General information about Florida law, not legal advice, and no attorney-client relationship is created. Whether a directed trust fits depends on your specific facts. Do not send confidential information until we have agreed to represent you.