Florida Trust also Works for Out of State Property
Many of my snowbird clients own a home in Florida and another state. Some of them have their homestead in Florida; others declare their legal residence in another state.
In either case, a Florida Revocable Living Trust is very useful to avoid probate in both states. If you are a Florida resident, you can own your homestead property via a Revocable Living Trust without losing your homestead exemption. In addition, you are eliminating the need for probate when you pass away. You can also transfer real estate owned in any other state to your Florida Trust. Generally, a Florida lawyer will prepare the Revocable Living Trust and Quit Claim Deed to transfer the Florida property into the Trust. If you are a Florida resident, the lawyer will also prepare a new Florida Last Will and Testament called a Pourover Will. This provides for the transfer to your Trust upon your death of any other assets not in the Trust or which do not have beneficiaries already designated. It is a security blanket to cover any assets payable to your Estate, such as insurance or personal injury proceeds, which you could not have anticipated prior to your death.
If you are not a Florida resident, you can still create a Florida Revocable Living Trust and execute a Quit Claim Deed to put your Florida property into the Trust. Your Last Will and Testament will be done by a lawyer in the state in which you have your legal residence. In addition, that lawyer can prepare a Deed to transfer the out of state property into the Florida Trust.
For Canadian citizens, there are possible tax aspects to be considered before you create a Florida Trust. These should be discussed with your Canadian accountant or tax attorney. In general, you will have to weigh the tax consequences versus the money and time that your heirs would save by avoiding probate in Florida.
Another favorable factor in creating a Revocable Living Trust is that you can always amend the Trust without having to change the Deed. In addition, once you create the Trust, you can always buy new properties in any state in the name of the Trust.
The Revocable Living Trust is recommended by most lawyers over a Deed which includes names of other persons, either as joint tenants, tenants in common or a Life Estate Deed. Once another person’s name is on a Deed, there are potential risks to you and your property. These include the possibility that the other person may undergo a divorce, bankruptcy, have a judgment against that person, or die before you or with you in a common accident. It may also affect your homestead exemption. All of these risks should be discussed with your attorney before deciding to put someone else’s name on your Deed. By contrast, the Revocable Living Trust eliminates those risks, since no other name is on the Deed. You simply transfer it from yourself to yourself as Trustee of your Trust.
This article covers only some basics regarding Revocable Living Trusts and Deeds. I offer a free consultation for all matters regarding Wills, Trusts, Probate and Estates. Please feel free to contact me at 954-569-4878 or 954-977-4878.
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