Land trusts are a useful tool for individuals who want to protect their identity while holding real property in Florida. However, many argue these legal arrangements are not worth the cost involved in setting up and maintaining them.
This way, would the costs associated with a land trust in Florida outbalance the benefits like privacy and relatively good asset protection?
In this article, you will find out the essentials about land trust cost in Florida, including setup and maintenance costs.
Explaining Florida Land Trusts – What is It?
In essence, a land trust is a trust that only holds real estate or other related assets (e.g., notes, mortgages, interest in a property, etc.). In a land trust, the trust maker (grantor) transfers the title of real property to a trustee to benefit a beneficiary.
Commonly, in a land trust is the beneficiary who effectively controls the property held into the trust, being granted the power to direct, replace or remove the trustee, if necessary.
In many cases, a grantor in a land trust is also its own beneficiary. Even though it is not uncanny, it is not the recommended approach, as courts in Florida tend to deem this type of arrangement as “self-settled” trusts.
The main advantage of a land trust is that the identity of the trustor and beneficiary in a land trust remain confidential, as their names neither appear in public records nor get disclosed to the public (except in cases of court order).
Setting Up a Land Trust in Florida – The Basic Requirements
In the state of Florida, a land trust can be set by either an individual or a group of people (e.g., members in a limited liability company).
Commonly, a trust maker setting up a land trust in Florida will need to work his/her way through various forms, but the three main documents will be the deed of trust, the trust agreement, and a memorandum of the trust agreement.
The most important of the trio is the trust agreement, which is the document that identifies the beneficiaries of the land trust. Plus, if there is more than one beneficiary, it acknowledges each party’s interest in the property held in the trust.
Notice that the trust agreement must be kept confidential and is not recorded in public records.
On the contrary to the typical arrangement of a living trust, the beneficiaries retain the ownership rights over the property held in the land trust. The trustee has a fiduciary duty with the beneficiary, answering to them and acting in their best interest only.
Setting Up a Land Trust in Florida – Standard Costs
Generally, a land trust cost in Florida is considered to be an affordable option for most people who want to hold real estate while remaining anonymous.
The initial cost to set up a land trust in Florida is normally a set-up fee, which can range from $250 to $500. In many cases, there are attorney fees associated with the administration of the land trust, which includes tax forms, bills, and other similar expenses.
Considering the annual fees, the maintenance of a standard land trust in Florida would cost approximately $300 a year. Nonetheless, the costs involved vary according to each particular case.
Concerning taxes, the beneficiaries in a Florida land trust should file tax returns as part of their personal income reports, although the trust itself will not be taxed.
Land Trust Cost in Florida – Working with an Expert Attorney Is Crucial
The process of setting up a land trust in Florida involves several factors, such as reuniting the necessary documentation, determining the people involved in the arrangement, and most importantly, making sure to comply with all related legal provisions at the state level.
Working with an experienced estate planning attorney is a crucial step to avoid wasting time and money when setting up a land trust. In this sense, an expert attorney can help by:
- assessing if a land trust is the best option or not;
- ensuring the trust arrangement is compliant with the Uniform Trust Code (UTC);
- reviewing the content in the trust agreement and all other documents;
- clarifying the legal complexities involved in a land trust;
- perfecting a land trust with valuable insights and suggestions; or
- dealing with all the necessary paperwork to save the client’s time and energy.
We Can Help You Set Up a Land Trust in Florida
Attorney Romy B. Jurado Esq. is an experienced attorney to assess your situation and help you set up the ideal land trust.