The Benefits Of Placing Your Home In A Family Trust
A family home is often the most valuable asset owned by a family, and as such is often a key factor in estate planning. Leaving a family home to descendants can help to leave a lasting legacy and impact future generations for the better. However, this implies the question of how to preserve and protect this property to pass it on. There are various ways to protect a valuable asset for estate planning, one of which is a family trust.
Trusts are separate legal entities that manage and protect assets according to the will of a grantor. A family trust will be managed by trustees who oversee the trust and ensure that assets are protected for the beneficiaries, who are the recipients of the assets invested in a trust. A family trust is another name for a living trust covered by certain Florida statutes, which may help a family home avoid probate, reduce taxes, and help protect the grantor’s legacy.
Estate planning law can be complex, but a skilled Florida estate planning attorney from Loughlin Law, P.A. may be able to help. Consider scheduling a consultation to discuss the benefits of a family trust today by calling (561) 677-8384.
Family Trust Benefits for Homeowners
Transferring the ownership of a family home to a trustee under the Florida Trust Code can provide numerous distinct benefits for homeowners. The primary reason homeowners will place their homes in a family trust is for the benefit of probate avoidance. When bequeathing an asset through a will, the will must first go through a long and costly probate process. The bureaucracy can slow down the process and may subject certain assets to taxes. However, a trust is legally distinct from the grantor, and as such can transfer assets much more quickly without going through probate.
A family trust may also provide additional tax benefits. Despite Florida’s homeowner-friendly tax climate, a family trust could still offer additional tax benefits for Floridians. Trusts also help protect the privacy of assets and family affairs. While wills are a matter of public record, trusts are private legal entities that may help protect a family’s privacy.
Trusts, specifically revocable living trusts, also may provide an additional degree of flexibility for estate planning. Due to the trust’s separation from the grantor’s assets, adjusting or managing a trust may require less hands-on effort from the grantor.
Disadvantages of Putting Your Home in a Trust
However, while family trusts are incredibly helpful tools for estate planning, they may not be the right solution for every family. Trusts can be complex to create and may require the grantor to pay certain fees or other hidden costs. Additionally, an irrevocable trust could lead to less control over assets in some situations.
Another drawback of placing a family home in a trust is the potential loss of Florida’s homestead exemption. The Florida Department of Revenue offers a significant tax benefit to Florida homeowners, which can reduce the rate the property tax increases as well as exempt some of the value of the property from tax entirely. Ensuring that a family trust still allows for the Florida homestead exemption may require a careful hand and current legal experience.
Consider speaking with a Florida estate planning lawyer from Loughlin Law, P.A. for more information on the Florida homestead exemption.
How to Put Your Home in a Trust in Florida
A revocable trust used effectively, however, can be a significant asset in Florida estate planning. Family trusts can help preserve and protect assets like a family home. Understanding the process of setting up a family trust may help clarify any potential challenges or circumstances to prepare for.
Create a Trust
The first step in securing a family home in a trust is to create a trust. This may involve determining what trust is right for the family in question. Revocable trusts, irrevocable trusts, and others are all suitable options depending on the needs of the individual. To create a family trust, one may need to create a trust with a Family Trust Company established and registered under the relevant Florida laws.
Consult with Legal Counsel
When creating a trust, the aid of a legal professional could provide invaluable insight and advice. Estate planning lawyers generally have much experience with estate planning entities like trusts and wills, and may be able to evaluate the needs of the individual and suggest a certain type of trust. A skilled lawyer may also be able to assist in drafting a trust document and ensuring that the needs of the family are looked after in the terms of the document.
Choose and Sign a Deed
Once a valid family trust is created, the deed to the property must then be signed under the trust and not the individual. A trust will not be able to protect or bequeath assets if they are still the legal possession of the grantor. To protect these assets, the grantor must transfer ownership of the asset to the trust. This may involve choosing and signing a new deed to transfer ownership of the house. Different deeds may allow for different flexibility or other benefits.
Notify Relevant Parties
There are many relevant parties who may require notification of changes in ownership. Transferring a home to a trust may impact the mortgage lender as well as any appointed trustees. Open lines of communication and ensuring that all parties involved are aware of the change may help avoid disputes or consequences in the future. Notifying these parties may also require the provision of updated documentation and any other information relevant to managing their part in the property’s management.
Update Records
A key aspect of estate planning is continuously updating documentation to reflect changes and provide clear information. If the house was a bequest in a previous will or was listed in any other estate planning documents, these documents may need to be updated to reflect the change. Additionally, any older deeds or other documentation regarding the ownership of the home may need to be updated. Clear records and accurate documentation can save time and confusion when sorting through estate planning documents.
Contact a Florida Estate Planning Attorney for Details
Estate planning can be a valuable practice that can help preserve important assets and benefit the next generation with clear planning and a strong legacy. Placing a home in a family trust can be a part of that legacy, as a family trust may help preserve the value of a house by protecting it from probate and certain taxes. For more information about placing homes in family trusts, consider speaking with an experienced Florida estate planning attorney from Loughlin Law, P.A. Consider scheduling a consultation today by calling (561) 677-8384.
