A land trust is typically created through a written agreement that conveys an interest in real estate to a named trustee. The trustee holds title to the real estate on behalf of one or more beneficiaries. According to the Florida Statute 689.071 on the Florida Land Trust Act, “Beneficiary means any person or entity having a beneficial interest in a land trust. A trustee may be a beneficiary of the land trust for which such trustee serves as trustee.” A land trust agreement is typically signed by everyone to go over the trustee’s role and responsibilities. These duties are not of many as the trustee may hold title but does not make the executive decisions that would have an ultimate effect on the property outside of what is administered by the beneficiaries. The beneficiaries in turn have the option to utilize the property as if they owned it altogether.
A properly formed land trust should provide a copious amount of benefits to beneficiaries.
Trust beneficiaries (the actual owners) can stay anonymous — only the trustee’s name shows up in the public records. The beneficial interests in a land trust has the capacity to be easily transferred through a straightforward assignment document, without the regulations of a contract.
The beneficial interests in a land trust can be possessed by numerous owners but typically only one individual, the trustee, is required to sign documents affecting the property.
Third parties dealing with the trustee of a land trust, including title insurers, do not need to look into the right of the trustee to purchase, sell, or lease real estate within a land trust. This attribute can be of use in order to maintain the confidentiality of trust documents that would need to be provided on other transactions not involving land trusts. Another benefit of a Land Trust is that Florida law provides that a beneficiary of a Land Trust can Homestead a personal residence owned by the Land Trust.
In some instances, transferring a home limited by a mortgage to a Florida land trust will not provoke the due on sale specification comprised in the majority of mortgages. A co-owner of beneficial interests in a land trust is usually not influenced by judgments, bankruptcies, and related aspects that govern other owners. These circumstances do not determine title to the real estate; they only control the beneficial interest of the individual owner. These are only a couple of the countless advantages of having real estate in a Florida land trust. For most property owners, especially those who prefer their privacy and facility of ownership, a land trust holds value compared to traditional ownership. Despite this, One size does not necessarily fit all in regard to property ownership, and land trusts are not always the right alternative in certain occasions.
There are times where ownership in an LLC or Corporation may be advantageous.
The best approach is to seek competent counsel before purchasing or transferring any type of Florida real estate asset. That is where our legal team at Kadoch Law Group comes in.
Do not hesitate to call today for your free estate planning consultation and to find out if a land trust is ideal for you!