Buying Property in Florida Through a Trust: Pros and Cons
Purchasing real estate in Florida is a significant investment, whether you plan to live in the home, use it as a rental property, or hold it for the long term. For many individuals and families, buying property through a trust is a strategic move that offers more control, flexibility, and protection. However, like any estate planning tool, using a trust comes with both advantages and limitations.
At Pyle, Dellinger & Naylor, we help clients evaluate whether holding Florida real estate in a trust aligns with their broader financial and legal goals.
Why Use a Trust to Buy Property?
A revocable living trust allows you to place assets under the control of a legal entity while retaining control during your lifetime. You can serve as the trustee, name successor trustees, and determine how the property will be managed and distributed after your death. This arrangement can be beneficial if you own multiple properties or want to streamline the probate process.
Purchasing property through a trust can also offer privacy. When a home is titled in the name of a trust, your name does not appear in the public land records. This level of discretion may appeal to investors or high-net-worth individuals.
If you’re thinking of acquiring real estate through a trust, working with experienced will and trust attorneys can help you avoid pitfalls and ensure the transaction is structured correctly.
Benefits of Buying Property Through a Trust
One of the primary reasons for using a trust in a Florida property purchase is to avoid probate. When property is held in a trust, it does not have to pass through probate court upon your death. This means your beneficiaries can take ownership faster, with fewer legal fees and delays.
A trust also allows for greater continuity in the event of incapacity. Instead of requiring a court-ordered guardianship or power of attorney, the successor trustee you name can step in and manage the property on your behalf. This is particularly important for second homes, investment properties, or real estate portfolios.
Additionally, trusts allow you to control how and when beneficiaries receive the property. For example, you might delay a distribution until a child reaches a certain age or tie the transfer to specific conditions. These types of provisions can be tailored with the help of a qualified estate planning attorney in Port Orange, FL.
Possible Drawbacks to Consider
While there are many benefits, purchasing property through a trust isn’t right for everyone. One potential drawback is the initial cost and complexity of setting up a trust. The trust must be properly drafted and funded, and the property title must be transferred to the trust after closing. Mistakes in this process can render the protections the trust was intended to provide invalid.
Lenders may also require extra documentation when financing a property held in trust. While many banks are familiar with revocable trusts, underwriting requirements can be stricter. If you’re purchasing a property with a mortgage, it’s essential to verify whether your lender permits trust ownership and what conditions apply.
There may also be homestead-related issues. Florida’s homestead exemption provides significant tax and creditor protections; however, these protections can be compromised if the trust is not properly structured. Our practice areas include trust planning that accounts for homestead law, helping clients preserve all available benefits.
Title and Insurance Considerations
Properly titling property in the name of the trust is essential. If this step is skipped or done incorrectly, the property could be excluded from the trust and end up in probate. It’s also important to notify your title insurance provider and update your homeowners insurance policy to reflect the trust ownership.
Our attorneys assist with reviewing deeds, updating title records, and coordinating with insurance companies to ensure seamless transactions. This attention to detail helps ensure your trust functions as intended and that your real estate is legally protected.
Should You Use a Trust for Florida Real Estate?
Buying property through a trust in Florida offers a range of benefits, including avoiding probate, enhancing privacy, and increasing planning flexibility. However, these advantages depend entirely on proper drafting, funding, and titling.
At Pyle, Dellinger & Naylor, we help clients throughout Port Orange and Volusia County make informed decisions about real estate ownership. Whether you are buying a primary residence or investment property, our firm is here to provide reliable legal support every step of the way. Contact us today to explore your estate planning options and protect your real estate investment.
