Overview of the Florida Land Trust
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What is a Florida Land Trust?
The Florida Land Trust is a simple and inexpensive solution for holding legal title to real estate or personal property. The Florida Land Trust is a fully revocable grantor trust drafted specifically to buy, hold, finance and sell Florida real estate or other personal property in a confidential or private manner pursuant to the Florida Land Trust Act that was adopted by the Florida legislature in 2006.
The State of Illinois was the first jurisdiction within the United States to formally recognize and codify the Land Trust, so you will often hear the Land Trust referred to as the Illinois Land Trust. You may also hear it referred to as the Title Holding Trust, especially in California.
There are many benefits of buying and holding property in a Florida Land Trust. The most common use is to keep your ownership interest of Florida real estate or other personal property confidential and private because the Florida Land Trust keeps your name off the public record. Holding property in a Florida Land Trust also limits most of the liability associated with real property ownership while retaining most of your rights of ownership including, legally claiming the Homestead exemption if the property is your primary
Exeter Fiduciary Services, LLC, as Trustee of the Florida Land Trust, acquires and holds legal and equitable title to the real property or personal property pursuant to the terms of an unrecorded Florida Land Trust Agreement.
Who Can Set-up a Florida Land Trust?
The Florida Land Trust can be set-up and used by any individual, any group of individuals, any general partnership, any limited partnership, any other revocable or irrevocable trust, another trustee or trust services provider such as an out-of-state trust company or bank, any limited liability company (LLC), any corporation, or any other type of business entity.
The natural person or legal entity that established a Florida Land Trust is commonly referred to as the Trustor, Grantor or Settlor ("Trustor"). The Trustor is generally the Beneficiary as well.
Who Serves as Trustee of the Florida Land Trust?
The Land Trust is created through the execution of two documents: 1) a Deed in Trust, where the real property is conveyed into the name of the Trustee in its fiduciary capacity as Trustee (not in its corporate capacity), and 2) a Florida Land Trust Agreement pursuant to which the Trustee administers the terms of the Land Trust.
Exeter Fiduciary Services, LLC is named or appointed by you as Trustee of your Florida Land Trust under the terms of the Florida Land Trust Agreement. Exeter Fiduciary Services, LLC merely serves as Trustee of your Florida Land Trust and has no authority to act without specific written authorization and direction from the Beneficiary(ies) of the trust.
About Exeter Fiduciary Services, LLC
Exeter Fiduciary Services, LLC is a private, professional fiduciary services company that administers specialty trust accounts and services for real property investors and property owners throughout the State of Florida, and is a wholly-owned subsidiary of The Exeter Group, LLC.
Who Owns the Florida Land Trust?
The Beneficiary(ies) own the Florida Land Trust. All ownership rights, often referred to as the benefits and burdens of ownership, are retained by the Beneficiary(ies) of the Florida Land Trust. The Beneficiary(ies) retain the power of direction over the trust unless they choose to delegate the power of direction to another individual or entity.
Who Owns the Real Estate or Personal Property?
Exeter Fiduciary Services, LLC serves as Trustee of the Florida Land Trust and owns the real or personal property in its name in its fiduciary capacity as Trustee of the Land Trust. Public records, including the County Recorders', County Assessors' and County Tax Collectors' public files and records, would reflect the legal title and ownership of the real estate or personal property as follows:
Exeter Fiduciary Services, LLC, as Trustee for, Trust No. XX XXXX.
The Beneficiary (legal owner) of the Florida Land Trust will not show up on any public record or database, and the Beneficiary's information will not be disclosed to anyone unless approved to do so by the Beneficiary, the actual Florida Land Trust Agreement, or required to do so under local laws or by any order by the court.
Who Has the Power of Direction?
Generally, the Beneficiary retains the full and complete power of direction over the Florida Land Trust unless the Beneficary chooses to delegate the power of direction to another individual or entity. The Trustee merely holds legal and equitable title to the real property or personal property subject to the written authorization and direction of the Beneficiary or any party that has a power of direction.
How Does the Florida Land Trust Work?
The Trustor enters into a standardized Florida Land Trust Agreement with Exeter Fiduciary Services, LLC. The Trustor appoints or names Exeter Fiduciary Services, LLC as Trustee of the trust, designates one or more Beneficiaries (owners) of the trust and can also appoint or name one or more Successor Beneficiaries under the trust. The initial Beneficiary is generally the Trustor and the Successor Beneficiaries are generally the Trustor's children, but could be anyone designated by the Trustor.
The Beneficiary(ies) of the Florida Land Trust retain complete control over the real estate or personal property held in the trust. They manage the property or retain agents to manage the property on their behalf. They collect and distribute any income and pay any and all expenses. They insure, develop, finance, lease or sell the real estate as they see fit.
The trust may be modified, updated or terminated at anytime. Additional real estate or personal property can be added to the trust at anytime. The Trustee executes grant deeds, promissory notes, deeds of trust, leases and otherwise deals with the property held in the trust only upon specific written authorization and direction from the Beneficiary(ies) of the trust.
The beneficial interest(s) in the Florida Land Trust is personal property and not real property. This beneficial interest includes the right to receive any income and any proceeds from the sale or mortgage of the property. The Beneficiary(ies) reserve the right to live on or otherwise possess and use the real estate. Their beneficial interest in the trust, as personal property, can be easily assigned to another party without the need to prepare, sign, notarize and record a Warranty Deed.
When Should the Florida Land Trust be Set-up?
The most effective way to use the Florida Land Trust, especially when confidentiality or privacy of property ownership is a primary concern, is to have the Florida Land Trust acquire and hold title to the real or personal property upfront when you initially acquire it. This way the Beneficiary's (owner's) name will never appear on any recorded document, legal title or public record.
The Florida Land Trust can be set-up at any point in time, however, in order to take advantage of the other benefits of acquiring and holding real or personal property in a Florida Land Trust.
What the Florida Land Trust Does Not Do
Florida Land Trusts provide many benefits to real estate investors and property owners. There are, however, certain areas where the Florida Land Trust may not benefit you. You should consult with your legal counsel for specific guidance regarding your transaction.
Income, Transfer or Gift Taxes or Property Assessments
The Florida Land Trust will not get around or avoid any kind of income, transfer, or gift tax consequences or any kind of property assessments or reassessments that would otherwise be due and payable if the property were conveyed and not held in a Florida Land Trust.
Due on Sale Clauses
The Florida Land Trust will not get around or avoid any due on sale clause contained in promissory notes secured by the property held in the Florida Land Trust when the beneficial interest is assigned and transferred to another party and the current beneficiary no longer has an interest in the Florida Land Trust. You should have your legal counsel carefully review your loan documentation to ensure compliance with the terms of your promissory note and mortgage.
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