BENEFITS OF PURCHASING A LAND TRUST
A land trust is a legal device for holding any interest in real property in which legal and equitable title is transferred to a Trustee. There are several advantages to holding property in a land trust. Among the most prominent are:
Probate Avoidance – When property is placed in trust it is no longer legally owned by the trustor (original property owner who placed the property in trust). Therefore, when the Trustor dies, the trust property does not constitute property owned by the Trustor at death. Instead, it will pass and be governed solely by the terms of the trust, as opposed to facing a lengthy and costly estate and administration process.
Privacy – The placing of property in a land trust is done by deed from the Trustor to the Trustee. Oftentimes, the Trustor is also a beneficiary of the land trust, however, only the name of the Trustee is associated with the property in the county recorder’s office. Land trusts are nifty ways of keeping a property owner’s and beneficiary’s status shielded from the public eye.
Tax Benefits – Property placed in a land trust may be taxed by that initial transfer, but there are specific provisions in the Internal Revenue Code providing for exceptions. In any event, all subsequent transfers occurring thereafter to successor beneficiaries while the property is held in trust are shielded by the trust from further taxation.
Simpler Transfers – Trust agreements can provide specific terms regarding how and when property is to be transferred and the Florida Land Trust Act accommodates for multiple beneficiaries and the various ways they can share title to the same property. Properly drafted trust agreements, tax benefits, and probate avoidance are all further reasons as to why transferring property held in a trust is much simpler than if it were held otherwise.
Easy Management – Property interests held in a land trust can be easily financed, sold, or otherwise managed without the formality of deeds, notaries, seals, or county recording.
THE FLORIDA LAND TRUST ACT – §689.071, Fla. Stat. (2013).
Land trusts in the State of Florida are created by statute under the Florida Land Trust Act (FLTA). All land trusts executed in the State of Florida must comply with the terms of this statute. The FLTA addresses the specific rights, liabilities, and duties of trustees and beneficiaries, appointment of successor trustees and beneficiaries, applicability of other law and the Uniform Commercial Code, perfection of security interests, and the type of interests held by trustees and beneficiaries in land trusts, among other topics. Contact our attorneys to learn how your goals in a land trust are impacted by the FLTA.
Here is a link to the Florida Land Trust Act:
There are a series of other benefits to hold property in a land trust. Our attorneys are happy to answer your questions and assist you in maximizing your goals through a land trust. Please feel free to contact our office at (727) 938-2255.