Land Trusts are the Best Vehicle to Hold Title to Real Property in Florida. Learn Why!

Do you own residential or commercial real estate?  Here’s some important information you will want to know.  Land Trusts are excellent vehicles to hold title to real property in Florida for both foreign and U.S. citizens.  Land Trusts are designed to provide flexibility, protection of your assets, as well as avoid the cost and inconvenience of Probate or Guardianship process.  Another benefit is that ownership within a Land Trust can help the owner structure a low individual tax rate upon sale. So let’s review some basics. 

Who is the Owner of a Land Trust? 

Generally, the party who sets up the Land Trust is typically the owner/beneficiary.    Within your Land Trust, you appoint a Successor Trustee. The duties of the Successor Trustee DO NOT require the supervision of a Probate Court.  The Successor Trustee passes Title by transferring the beneficial shares (if not previously transferred ) to the person(s) you have designated. This is similar to checking a box for a beneficiary on a life insurance policy.   The number of Successor Trustees is limited only by the number of people you name and the type of contingency plans you wish to make. Your Land Trust can be changed or amended at any time. You can also transfer the beneficial interest at any time and not be subject to documentary stamp taxes or adversely affecting your Title Insurance.  One of the biggest advantages of a Land Trust is that in the event of death, you can avoid the time and expense of the probate process that exists in Florida. Because a Land Trust is a separate legal entity, it continues to hold Title to your property until your Trust is terminated. Termination of a Land Trust is based on the terms you specify.   

What are the Benefits of a Land Trust?

1. Privacy

Once the Title of the real estate is transferred into a Land Trust, the names of the actual owners cannot be disclosed without a Court Order.  Many investors or homeowners prefer to keep their holdings private. This kind of anonymity may help to avoid frivolous lawsuits.  

All the problems of Probate, particularly the expense, time and public knowledge of your affairs also applies to Guardianships.  If you are incapacitated, mentally or physically, without a Land Trust, most likely it would be necessary for the Probate Court to have someone appointed to manage your affairs, including real estate.  A Land Trust will avoid this possibility.

2. Legal Protection

When dealing with multiple owners of a property, a real estate Land Trust ensures that any legal judgment brought against one of the owners does not include everyone else. Suppose, for example, you and your business partners co-owned a property without a Land Trust and then one of you fell into debt. In this case, the creditor could sue the borrower and then place a lien on the property title – which could be very inconvenient to the other owners. With a Land Trust, on the other hand, the creditor cannot claim a lien on the property to recover a debt from one of the owners. 

3. Ease of Conveyance 

Ease of conveyance basically means that it is easy to pass the real estate in a Land Trust to the heirs without involving courts or the probate process.  There are many costs involved in Probate, including the payment of debts and back taxes in some cases. A Land Trust allows the property owner to create a succession plan with new beneficiaries upon every successor’s death. This typically means that the Land Trust goes on indefinitely, so there is no need for Probate. 

In summary, a real estate Land Trust provides a great opportunity to protect your assets, avoid unnecessary litigation and simplifies the succession process. With over 30 years of experience in counseling real estate owners and investors, you will be in good hands when you contact the Reyes Law Group.  Se Habla Español. Get in touch with us today.

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Reyes Law Group

Reyes Law Group represents clients in a multi-disciplinary legal practice involving real estate transactions and litigation with a “footprint” that covers the State of Florida. Over the firm’s first 10 years, Reyes Law Group has closed over $100M in commercial closings, representing buyers and sellers in contract negotiations, due diligence, and the related title review and policy issuance related to closings. In litigation, the firm has commercial litigation experience focused on prosecuting or defending claims such as breach of contracts, partition actions, trade secret violations, and breach of non-competes. However, our firm’s MAIN FOCUS is assisting asset and loan portfolio managers, investors and private lenders with a “ 4-PILLAR APPROACH” to the legal challenges they face with non-performing assets: 1) LOAN WORKOUTS; 2) COMMERCIAL FORECLOSURES (across the State of Florida); 3) COMMERCIAL EVICTIONS; and 4) REO COMMERCIAL CLOSINGS.30+ years’ legal experience means - WE CAN HELP!

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