Florida land trust are generally used so the owners can do one of two things (and sometimes both) : hide their actual value, or keep their property under wraps. In many cases, land trusts are developed by the rich and powerful to keep themselves safe in the case of a lawsuit. This may not be the only reason, but maintaining anonymity is reasonable many fold. Let's take a look at what your responsibilities may be if you decide to become a trustee; yes, even for yourself.
Becoming a Trustee
Becoming a trustee is as simple as signing your name on the dotted line. Easy, right? Maybe not so much. You'll need to check into what your contract really says. While we'll get deeper into that in the next section, being aware of what your contract states is the most important thing that you can do to make sure to protect yourself.
You may not need to do this if you're becoming a trustee for yourself or your own LLC (or the reverse), which is a pretty common practice in today's legal world.
What are My Responsibilities as a Land Trustee?
Your responsibilities as a land trustee can range an enormous gamut that may leave you legally responsible for injuries, debts, or even evasion if connected with the property. When you sign a land trust document to become a trustee, you are legally saying that you are responsible for what happens to that land and the things connected to do it.
Yeah, it's lot deeper than just signing a dotted line.
Before you decide to become a land trustee, we recommend looking into the history of the property. Are back taxes owed? Don't get involved unless the contract states that you are absolutely not responsible for the property in any financial meaning. Otherwise, you could get a very high bill in the mail.
Have there been incidents on the land or are there legal issues ongoing? Don't touch that with a yardstick unless your contract completely absolves you of any and all contract with the current problems plaguing the owners.
Essentially, avoid any situation in which you have any, and we mean any, viable responsibility for the property itself. Your sole purpose should be a name on a document and absolutely nothing else. Many trustees end up in over their head when they sign up for the job and it can get even deeper very, very fast. Be aware of the situation, have a lawyer read through the contract and give them a total list of all your concerns. They'll look for issues with the property and may have more access to documentation than you do as a civilian.
Should I Use an LLC?
Essentially, avoid any situation in which you have any, and we mean any, viable responsibility for the property itself. Your sole purpose should be a name on a document and absolutely nothing else. Many trustees end up in over their head when they sign up for the job and it can get even deeper very, very fast. Be aware of the situation, have a lawyer read through the contract and give them a total list of all your concerns. They'll look for issues with the property and may have more access to documentation than you do as a civilian. Should I Use an LLC? You can indeed use an LLC in a trust situation. However, your exact situation is unknown to us. In most cases, LLCs are used in trust situations when the company should have been the primary holder to begin with. Though this isn't always the problem, it commonly is. We strongly recommend taking a look at your personal reason for creating a land trust and deciding this on your own: can the LLC cope with the liabilities of being involved in the land trust if there are problems unforeseen by the current circumstances? If not, leave the LLC out of it.
Anonymity and the Double-Sided Razor
The primary, or at least the most common desire in a land trust, is that of anonymity. Whether it's due to an impending lawsuit or another legal matter, or something entirely different, land trust almost always come down to hiding some part of someone's possessions for their particular gain.
And there's nothing wrong with that, but it can complicate things and some courts may even throw out a land trust if it is discovered, forcing the owner to come into the light and admit to the property ownership. While the latter is rare, it does occasionally happen. Don't wait to file your land trust if you desire anonymity.
A land trust, like most other legal trusts, is a wonderful way of protecting your property when things get hot. However, they can be easily reversed by a judge if discovered. They do not change the way that people are taxed for the property nor are they a way to get away from property taxes in general. However, they are a very useful way of covering your real estate investments if you do not desire for these to be uncovered for whatever reason you have.