Land Trust: What Is It And What Are The Benefits?
Many Floridians are setting up Land Trusts for their properties in the Sunshine State. But what is a Land Trust, and can you benefit from creating it as part of your estate plan in Florida?
If you are considering setting up a Land Trust in Florida, consult with a St. Petersburg trust planning attorney to discuss the benefits of this type of Trust.
What is a Land Trust?
In Florida, Land Trusts are governed by the state’s Land Trust Act (Fla. Stat. § 689.071). A Land Trust is a private agreement between several parties that allows the Trustor to separate the legal ownership of the property in the Trust from the beneficial ownership.
Typically, the Trustor (the person who sets up a Land Trust) appoints another person or entity (the Trustee) to hold legal title to the Trustor’s property for the benefit of the beneficiary. The owner of the property held in a Land Trust can serve as both the Trustor and the Trust’s beneficiary.
The Trustor may also name other beneficiaries to hold a beneficial interest in the property. Florida law allows Land Trusts to hold title to multiple properties.
What Are the Benefits of Land Trusts in Florida?
There are several benefits associated with Land Trusts in Florida, including but not limited to:
- Confidentiality. Land Trusts provide confidentiality over the Trustor’s ownership of real estate property. The Trustor’s beneficial ownership interest will not be shown in public records. Instead, the public records will show the name of the Land Trust Trustee.
- Privacy of the ownership transfer. In Florida, you can transfer title to your real estate property through a public deed. A Land Trust provides a private way to transfer ownership. The Trustor may set up a private Land Trust to transfer their beneficial interest to another person. The transfer will remain hidden from the public.
- Avoid probate. A properly executed Land Trust agreement can specify successor beneficiaries in the event of the property owner’s death, which can help avoid the time-consuming and costly probate. The property in the Land Trust will be automatically transferred to the successor beneficiary named in the Trust upon the owner’s death.
- Avoid liens. When a creditor obtains a judgment against you, it becomes a lien on all real estate property titled in your name except your homestead. Since a beneficiary’s interest in a Trust is considered “personal property” rather than real estate property, you can avoid a lien on the property held in the Land Trust. In other words, beneficial interests in Land Trusts are generally not affected by judgments.
- Homestead exemption. A personal residence of the Land Trust’s beneficiary can still qualify for the homestead exemption benefits under Florida law. Homestead exemptions offer many benefits, including tax benefits and protection for creditor judgments.
You may benefit from setting up a Land Trust when developing your estate plan in Florida. Schedule a case evaluation with our St. Petersburg estate planning attorneys at Legacy Protection Lawyers, LLP, to discuss your case and determine if it makes sense to create a Land Trust. Call 727-471-5868 today.