Protect Your Property and Privacy With a Land Trust in Florida
If you’re approaching retirement age, you may be considering setting up an estate plan to ensure the transfer of your property and assets to your loved ones and heirs when you pass away.
Most estate plans attempt to minimize estate taxes, maximize the value of the assets in the estate, and help your beneficiaries avoid probate, which can be a drawn-out and expensive process.
Your estate plan will most likely include a Last Will and Testament (will) and/or different types of trusts and other estate planning tools.
A land trust is one of those helpful estate planning tools in Florida that can protect your assets and property from creditors, maintain your privacy, and help your heirs avoid the probate process after you die.
Typically, real estate must be administered through a probate proceeding after the owner’s death, but with a land trust, the property is transferred immediately to the beneficiaries named in the land trust agreement without the need for probate court in Florida.
In a nutshell, a land trust is just like other trusts: It includes a grantor or trust maker (the land owner and person who sets up the trust and transfers the title deed to the trustee), a trustee (a trusted person, lawyer or corporation designated by the grantor who will hold and manage the property for the benefit of the beneficiaries) also known as a fiduciary; and a beneficiary or beneficiaries (the people who will benefit from the property held in the trust).
The details vary in each state, but Florida land trusts operate under the Florida Land Trust Act, section 689.071 of Florida law. In Florida, land trusts can be set up by an individual, partners or a corporation.
The trustee, who also may be an individual or a corporation, such as a Limited Liability Corporation (LLC), holds the legal title to the real estate property for the benefits of the beneficiary. A land trust may hold title to more than one property.
After the grantor transfers title of the property to the trustee through a deed, the land trust will own the property, but the beneficiary will be able to control the use and sale of the property and will receive all the tax benefits and property appreciation.
One of the main advantages of a land trust in Florida is privacy; only the trustee and the trust will be shown in public records as the property owner. Public records don’t identify the grantor and beneficiaries, so the property remains hidden from potential creditors or others who may have a vested interest in the grantor’s or beneficiaries’ assets.
In addition, a land trust in Florida allows for private transfers of ownership or assigning by sale or gift, instead of through a publicly recorded deed or mortgage. The public will not be able to see the transaction or find out the transfer price or the buyer’s name.
A land trust also can avoid the expense of new title insurance on the property if it’s transferred by assignment rather than deed. In addition, land trusts can avoid judgments and liens on the property recorded against the beneficiary because a beneficiary’s interest is considered personal property and not real property in Florida.
Finally, a trust isn’t taxed, but the beneficiaries will need to include the trust in their Schedule E on their tax returns.
There are some drawbacks to setting up a land trust for yourself as the beneficiary (known as a self-settled trust). This type of trust does not offer personal asset protection, so would be vulnerable to creditors. Also, the trustee, as the legal and public owner of the land trust, must be involved in all real estate transactions involving the property in the trust, including rental agreements, property listings, construction permit applications, and other contracts.
Setting up a land trust can be quite complex with a lot of moving parts, so it’s important to enlist the assistance of an experienced and qualified real estate attorney, such as the attorneys at RTRLAW.
RTRLAW’s qualified real estate and estate planning attorneys have the expertise and experience to help you set up a Florida land trust, prepare a quitclaim deed to transfer real property to a new owner, help you set up an LLC or other corporation as needed, and explain all the key advantages and disadvantages of land trusts, so you can make the right decision for your situation.
RTRLAW’s Real Estate Division is your one-stop resource for all your real estate transactions, closings, and litigation needs, including land trusts.
Our real estate attorneys have professional and personal “real world” experience in Florida real estate, which means they have the knowledge and background to handle our clients’ cases effectively and efficiently – both inside and outside the courtroom.
You can meet with an attorney at one of our convenient office locations in Florida, including: Fort Lauderdale, Orlando, Tampa, Kissimmee, Lake Worth, or by appointment in Miami or Jacksonville. At RTRLAW, we’re here for you 24 hours a day, seven days a week.
For more information about RTRLAW’s wide range of real estate services, please contact us, email [email protected] or call or text us toll free at 1-833-HIRE-RTR (1-833-HIRE-RTR).