Putting Your Real Estate in a Florida Land Trust

A Florida land trust is a method for holding legal title to real property. The beneficiary owns the Florida land trust, has power of direction over the trust, and has control over the property that is in the trust (the person creating the land establishes the land trust and is often one of the beneficiaries). The trustee holds the title to the property for the benefit of the owners or beneficiaries.

There are two steps to putting your property in a Florida land trust (Consult your Florida Real Estate Attorney for assistance):

  1. Deed in Trust; and
  2. A Florida Land Trust Agreement.

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Below are some of the benefits of a Florida Land Trust:

  1. Allows for the private transfer of property – your name is not recorded in the public record like most property transactions
  2. Limits liability – trustee is free from liability, therefore you can allow for a corporation to be the beneficiary and then limit personal liability as trustee
  • Property held in land trust is also not encumbered by judgments made on beneficiaries
  • Work with your Florida Real Estate Attorney to structure your trust to best avoid personal liability
  1.    Avoid probate
  • It is common for land trust to be considered a “will substitute”
  • Contingent beneficiaries are mentioned in the trust
  • No Florida Documentary transfer tax is due when transfers are among beneficiaries (this is on a case-by-case basis).
  1.     Improves efficiency in transactions with multiple buyers or owners
  • Allows for only the trustee to sign documents to complete the transaction
  1.     Homestead Exemption
  • If beneficiary is a Florida resident, then trust may qualify for Homestead Exemption
  1. Tax benefits
  • No annual filing fees with state of Florida
  • No additional tax return or tax I.D.

There are a number of benefits associated with putting your property into a land trust. For example, Walt Disney actually acquired the property for Walt Disney World in Florida through the use of a land trust. This allowed for additional privacy, and reduced the chance that prices in the area would increase due to anticipation of Disney’s plans for the community.

Be sure to contact your Florida Real Estate Attorney to set up a land trust, as there are Florida Statutes that you must comply with. Your Florida Real Estate Attorney should draft a deed to the trustee, and a written land trust agreement. A disclosure form to the IRS must also be filed to note that the trustee is acting for the beneficiary, this is where you should get your Certified Public Accountant involved as well. Both your Florida Real Estate Attorney and Certified Public Accountant will work together in order to set up your asset structure.

The Biggest Estate Planning Mistake

The most common mistake that can be made when estate planning is the failure to keep your forms and documents up to date.  As simple as it sounds, there are countless instances where people who did not have updated beneficiary forms inevitably ran into complications later in the process.

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Without proper documentation, the money and property you saved for your loved ones may fall into the hands of ex-spouses, irresponsible or untrustworthy family members, or other unintended heirs.  Besides having control over who gets your money and how much, designating a beneficiary also avoids probate in some circumstances.  Updating your estate plan regularly, you can be certain your wishes will be carried out in your absence the way you want them to.

Here are some of the forms that you should update regularly: bank accounts beneficiary lists, retirement accounts, life insurance benefits, and so on.  If a divorce, death, or any other life or relationship change occurs that will affect how you plan your estate, it is imperative you make those document changes immediately.  Contact us today to speak with a Florida Estate Planning Attorney and ensure you are protected in all aspects of your estate planning.

Source: Estate Planning Digest 

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