Florida Land Trusts

Estate planning is complicated. The process always starts with a will. For many people, a trust can also be a cost-effective, efficient way to protect and preserve their assets. Notably, a Florida Land Trust is a specialized estate planning option available to many residents of our state. At The Law Offices of Odelia Goldberg, we help people find peace and security through proactive planning. Here, our Fort Lauderdale trusts attorney provides a comprehensive overview of land trusts in Florida. 

What is a Florida Land Trust?

Broadly explained, a Florida Land Trust is a type of legal arrangement where property ownership is transferred to a trustee. These trusts are governed by a state statute called the Florida Land Trust Act. With this type of estate planning vehicle, the trustee holds the property title for the benefit of the beneficiary. Most often, the beneficiary is the person (or persons) who set up the trust in the first place. Notably, the beneficiaries retain control over the property. They can direct the trustee regarding issues of management, including whether or not to sell the property and how to manage any proceeds.  

Note: Not all states in the U.S. have statutes that specifically recognize or provide for land trusts like Florida. Only property within the state can be placed within a Florida Land Trust. 

Five Things to Know About Florida Land Trusts (an Overview of the Benefits)

A Florida Land Trust can be an especially effective way to manage property. Is it the right choice for your estate plan? It might be. It is useful to consider the advantages. Here are five of the most important benefits associated with Florida Land Trusts: 

1. The Trust Holds the Property (Name Not in Public Records): Property records are public in Florida. However, when a property is held in a Florida Land Trust, the name of the beneficial owner does not appear in the public records. It can be a valuable benefit as it helps to ensure confidentiality regarding property ownership.
2. Property Rights Divided Into Trust and Equitable Interest: With a Florida Land Trust, property rights are split between the legal title held by the trustee and the equitable interest of the beneficiaries. The trustee manages the property following the beneficiaries’ directions. Remember, the beneficiary retains control over the property even without being named on the title. The separation of interests allows for flexible management and control. 
3. Property in a Land Trust Can Pass Outside of Probate: Property owned by a Florida Land Trust bypasses the probate process, allowing for a smoother and faster transfer of assets upon the death of a beneficiary. Why is limited exposure to probate an advantage? Doing so not only expedites the distribution of the property to heirs or successors, it also reduces the associated legal costs and complexities. 
4. The Trust May Provide Some Asset Protection: A Florida Land Trust may offer a layer of asset protection from creditors, as the beneficial interest in the trust is considered personal property rather than real estate. In certain circumstances, this can complicate a creditor’s ability to attach a lien directly to the property. That being said, it should be emphasized that other types of trusts—meaning an alternative to a Florida Land Trust—offer more comprehensive asset protection. 
5. Not Required to Give Up Homestead Exemption: Owners of a property held in a Florida Land Trust are still eligible for the homestead exemption. Notably, Florida’s homestead exemption law is one of the most beneficial for property owners in the entire country. You do not have to give up your homestead rights with a Florida Land Trust. The law recognizes the beneficial interest of the owner as equivalent to direct ownership for purposes of the homestead exemption. The Florida Homestead Exemption provides significant property tax savings as well as some significant protection against certain types of creditors.

Is there Any Downside to Setting Up a Florida Land Trust?

Given that there are clear advantages associated with Florida Land Trusts, you may be wondering if they are the right option for your specific situation. Are there any downsides? The answer is that setting up a Florida Land Trust is not the right solution for every estate planning situation. Here are the three primary drawbacks of Florida Land Trusts: 

• Set Up Costs: It is not free to set up a Florida Land Trust. There are certain requirements that must be met to ensure the trust is set up properly. While it can be worth the costs, it is important to remember that there are costs. These costs include legal fees for drafting the trust agreement, fees for appointing a trustee, and any recording fees associated with transferring property into the trust. 
• Additional Complexity: Managing a Florida Land Trust introduces additional complexity to property ownership and management. Property owners must navigate the legal nuances of dividing the property’s title between the trustee and the beneficiaries, which can complicate decision-making and transactions. Beneficiaries must communicate their wishes through the trustee, which adds a layer of communication that would not be needed with direct ownership. 
• Not Comprehensive Asset Protection: As noted previously, a Florida Land Trust provides some asset protection but not comprehensive asset protection. Creditors may still reach the beneficial interest of a beneficiary through a charging order, and the trust does not provide absolute protection from personal liability or creditor claims. Property owners seeking to shield assets from all types of creditors should at least explore all available alternative asset protection strategies. A South Florida estate planning attorney can help. 

Contact Our Florida Land Trust Attorney Today

At The Law Offices of Odelia Goldberg, our Florida estate planning lawyer has the skills and experience to advise people and families on trust planning matters. If you have any specific questions about concerns about Florida Land Trusts, please do not hesitate to contact us today for a confidential initial consultation. From our Fort Lauderdale office, we provide trust planning services in Broward County and throughout South Florida.