By: D. Scott Baker
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, which 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:
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. However, it should be noted that many of the same benefits of land trusts are available to Florida property owners who use LLCs, corporations, and other entities to hold their real property assets. One size definitely does not fit all when it comes to property ownership, and land trusts are not the ideal alternative in some situations. The best approach is to seek competent counsel before purchasing or transferring any type of Florida real estate asset.
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