Florida Land Trusts
North Palm Beach residents who want to establish land ownership rights to someone who does not legally own the title may consider Florida land trusts. A Florida land trust is a legal contract in which a trustee retains the legal title to real property. The trust allows the named beneficiaries to collect rent on the property without having to legally hold its title. The beneficiaries get to direct the trustee on how to manage the property. The beneficiary may be a natural person or an entity.
Land trusts operate under the Florida Land Trust Act that was adopted in 2006. The beneficiaries have enormous power under these agreements, having the right to keep the trust information private in most cases unless a court orders otherwise. The property interests do not usually need to be recorded with the state, so creditors, tax collectors and former spouses are usually unable to find such an interest in a land trust, making it more difficult for such individuals to seize the property. Likewise, when a person acquires property through a land trust, the buyer’s identity may be withheld along with the purchase price.
Due to the discretion to keep such transactions private, many individuals are drawn to land trusts. Land trusts provide a number of key benefits, including the ability to qualify for Florida’s Homestead tax exemption and the ability to protect property interests from creditors. If a judgment is made against a beneficiary, it typically does not affect the trust title. Likewise, if a judgment is made against the actual land trust, it does not typically impact the beneficiaries directly. Additionally, interests within land trusts cannot be split or sold.
Another benefit is that property that is held within a land trust is not generally subject to probate. This allows for valuable property to transfer outside of the expensive and time-consuming nature of probate proceedings. Unlike with other trusts, the trust does not terminate just because the beneficiary becomes disabled or dies. Additionally, land trusts can hold the title to multiple properties under the management of a single trustee for the benefit of separate beneficiaries.
In order to receive the many benefits of a land trust in North Palm Beach, it is important that the land trust be carefully drafted by a skilled estate planning lawyer experienced in land trusts. A properly-drafted land trust can avoid disputes from arising between beneficiaries. Precise language that satisfies the Florida Probate Code must also be used to create a valid trust. Trustees should also have a clear understanding of their responsibilities, including filing certain tax documents or other reporting requirements to tax agencies.
For more information about establishing a Florida land trust or other estate planning guidance, contact premier North Palm Beach estate planning lawyers at Kitroser, Lewis & Mighdoll. We provide personal attention in creating a sound estate plan to address all your needs. Contact us at 561-721-0600, or online for a consultation.
