What is a Florida Land Trust?
Few people have heard of Florida Land Trusts, a seldom-used trust, designed to buy, manage, and sell Florida real estate. Rest assured, more property owners would use it if they knew about it. That’s because Florida Land Trusts keep your name off the public record, waive much of the liability associated with owning property, and help owners avoid paying transfer tax upon deeding the property as well as helping beneficiaries avoid inheritance tax at the time of your death.
The land trust involves three parties: the grantor who sets up the trust, the beneficiary (the owner or owners), and the trustee (a fiduciary group like a bank or broker). If desired, the owner can serve as both grantor and beneficiary. The good news is that, in a land trust agreement, the beneficiary retains all the usual rights of ownership while also enjoying the anonymity and flexibility of a trust.
Land trusts have existed in Illinois for over a hundred years, but they are relatively new in Florida. The Florida Land Trust Act was significantly revised in 2007 and is modeled on the Illinois land trust. In fact, land trusts still only exist in eight states today, and, as a result, remain largely unknown. Real estate agents often don’t receive training on them. And even in those eight states where land trusts are a legitimate form of real estate ownership, they are poorly understood.