Creating land trusts can deliver a range of benefits when used to hold titles for investments of real estate. These land trusts will hold the title to an investment property of some sort. Part of the usefulness of land trusts comes from the fact that there is not anywhere that they are registered.
Land trusts represent a useful real estate tool for delivering asset protection as well as privacy related to the ownership. Trusts serve as your defense to protect you, as well as your loved ones, from the lawsuits that occur regularly.
If you try to do your own research, you will quickly learn that information regarding land trusts, both specific to Florida and in general across the country. Furthermore, very few attorneys will be familiar with the process of setting up as well as administering title holding trusts.
To create your land trust to protect ownership and privacy, you should start by printing the basic agreement for land trusts. Printing a physical copy will help you go through and take notes on your draft before you fill it out electronically.
There are three preambles in your trust agreement, only one of which will apply to your situation. You can then delete those that do not apply. Take the applicable preamble and fill in the Trustee's name and the trust's name.
When naming the land trust initially, you can choose almost anything, provided it does not involve copyright infringement. When naming the Trustee, you will find it easiest to have the Trustee be in the state that the Trust Agreement is from, such as Florida for both. After a year has passed, you can change your Trustee to someone located within another state. This is the most private solution, especially if the Trustee's last name is different than yours.
As you create the agreement for your land trust, you will notice a decision as to whether it will be irrevocable or revocable. If you want to be able to adjust the agreement's terms via amendments in the future, you want a revocable agreement. If you want the terms to be unable to be changed, then you want an irrevocable agreement. In the case of irrevocable trusts, the trust will stay the same until it expires.
Keep in mind that irrevocable trusts provide additional asset protection compared to revocable ones. However, you may need to file tax returns separately, have tax identification numbers, and pay taxes at a higher rate compared with your individual taxes. As such, it is a good idea to always get legal as well as tax advice before you create a land trust that is irrevocable.
As you continue through your trust agreement, you will need to select the beneficiary. If you currently own the property in question and choose someone as the beneficiary that is not your spouse or you, there may be gift tax implications. Because of this, some experts suggest making the beneficiary your LLC, corporation, or trust for personal property. This can deliver additional asset protection in the future.
There is the option to go with multiple or single beneficiaries, depending on your situation. You must also name a successor beneficiary (or beneficiaries). This beneficiary will automatically become the beneficiary if the primary beneficiary dies.
As you go through the agreement for the land trust, you will also need to decide and indicate:
Because of the complicated nature of land trusts, it is best to hire a professional to assist you with the process of forming these trusts.