Estate Planning Considerations for Your Primary Residence vs. Rental Property in Florida
There are many assets that must be taken into account when planning your estate. These assets include bank accounts, investments, life insurance, jewelry, collectibles, and many others. No matter how many assets you have, real estate is likely one of the more valuable assets in your estate.
That’s why there are many things to consider when creating an estate plan in Florida. First and foremost, it is vital to understand the difference between a primary residence and a rental property when drafting your estate plan.
It is important to consult with a St. Petersburg estate planning lawyer to help you determine the form of ownership for each type of property, how you can reduce or eliminate taxes, and what types of trusts are more suitable for your particular situation.
Estate Planning Considerations for Your Primary Residence in Florida
As you create an estate plan, consider the following things if you your primary residence is in Florida:
- Under the Florida Constitution, Homestead property is protected from the claims and judgements of creditors. If you and your spouse hold title to property as husband and wife, in addition to the constitutional creditor protection, the joint ownership avoids probate upon the death of the first spouse.
- If you are a single homeowner, you may benefit from transferring title to the property to a revocable living trust. This would allow you to benefit from homestead protection in addition to avoiding probate.
- If you are a married homeowner, transferring your primary residence to a trust may negatively affect your property’s homestead status. For this reason, it is vital to speak with a skilled estate planning lawyer in Florida before transferring your primary residence to any trust.
Estate Planning Considerations for a Rental Property in Florida
There are even more things to consider when your real estate is a rental property in Florida.
- Since your rental property is generating income, it is technically a stream of income rather than your residence. For this reason, estate planning for rental properties requires some extra consideration.
- Many people who own rental properties choose to set up a limited liability company (LLC). It is advised to get help from an estate planning lawyer to help you transfer ownership to an LLC. If anyone, including your renters, obtains a judgment against you, they will seek satisfaction from the LLC’s assets rather than your personal assets.
- Depending on how you take title to your rental property, it is important to discuss probate avoidance techniques with your attorney. If you own the property in your individual name, in the name of a married couple, or in an LLC, there are several pros and cons depending on your personal situation.
Speak with an experienced estate planning attorney to discuss the best strategies for asset protection and estate tax planning regarding your real property ownership. Contact our St. Petersburg-based lawyers at Legacy Protection Lawyers, LLP at 727-471-5868.