Friday, August 29, 2014
Orlando REALTOR® | September/October 2014
For many property owners,
a land trust is a valuable alternative to traditional ownership
By D. Scott Baker, Esq.
The Florida Legislature recently amended the Florida Land Trust Act to improve existing law and encourage the use of land trusts. Today the land trust is a valuable tool for property owners who want a flexible, anonymous, and efficient means of holding title to Florida real estate. This article briefly explains how a land trust is formed and then summarizes some of the uses and benefits of a land trust.
A land trust is formed by recording an instrument, usually a deed, that transfers an interest in real estate to a named trustee. The trustee holds title to the real estate on behalf of one or more beneficiaries who are not named in the recorded instrument. A separate land trust agreement is usually signed by everyone to spell out the trustee’s role and duties. These duties are very few; the trustee holds title but makes no decisions affecting the property except as directed by the beneficiaries. The beneficiaries in turn get to use the property just as if they owned it outright.
A properly formed land trust offers several benefits to beneficiaries. A few of these are as follows:
*Trust beneficiaries (the true owners) can remain anonymous. Only the trustee’s name appears in the public records.
*The beneficial interests in a land trust can be easily transferred by means of a simple assignment document, without the formalities of a deed.
*The trust agreement can specify successor beneficiaries in the event of the original beneficiary’s death, thereby avoiding probate.
*The beneficial interests in a land trust can be owned by many owners but only one person — the trustee — is necessary to sign documents affecting the property.
*A co-owner of beneficial interests in a land trust is generally not affected by judgments, bankruptcies, and similar matters affecting other owners. These matters do not affect title to the real estate; they only affect the beneficial interest of the individual owner.
These are but a few of the many benefits of owning real estate in a Florida land trust. For many property owners, especially those who seek privacy and ease of ownership, a land trust is a valuable alternative to traditional ownership.
D. Scott Baker, Esq., Zimmerman, Kiser, and Sutclifte, P.A., is a member of the Central Florida Real Estate Attorneys Council. CFREAC provides this column on real estate law issues as a service to ORRA members to provide a general understanding of the law on various topic interest, not as a substitute for individual legal advice or consultation, and should not be relied on in specific situations without consulting with a real estate attorney. For more information, please visit www.centralfloridarec.com.