Considering the financial and emotional value of a residential home, it is crucial to protect it against judgments, liens, and other similar issues that may result in foreclosure. Transferring a residential home to a Florida trust must offer a valuable solution, but how much does it cost? Keep reading to find out.
Transferring Florida Property to a Trust – The Fundamentals
A trust is a fiduciary relationship in which one party holds the title of assets on behalf of someone else for the benefit of one or multiple persons. Every trust must have three elements – the trustor, the trustee, and the beneficiary.
The trustor (also referred to as “settlor”) is the person who creates the trust. The trustee is responsible for holding nominal ownership of the asset held in the trust and administering them according to the trustor’s wishes outlined in the trust instrument.
The beneficiaries are the individuals listed to benefit from the trusts, which are generally the trustor’s descendants or closest family members. Once the trustor dies, the trustee must follow the instructions in the trust instrument and distribute the assets held in the trust to the beneficiaries.
In Florida, it is possible to set up two types of trusts – revocable trusts and irrevocable trusts. A revocable trust is a trust that can be amended, modified, or revoked while the trustor is still alive. After the trustor’s death, all revocable trusts become irrevocable.
An irrevocable trust is a trust that cannot be modified, changed, or revoked. If properly signed and executed under Florida law, a revocable trust instrument does not accept changes without court intervention.
What Are the Advantages of Transferring Property to a Florida Trust?
The main advantage of transferring a residential property to a trust is avoiding probate. When someone dies owning assets solely in his or her name, the property must go through probate.
Depending on the size and value of the decedent’s estate, probate may result in a lengthy and complex process. While probate procedures are not complete, the decedent’s heirs and beneficiaries must wait to receive their fair share of the estate.
If a property is titled to a trust, it is not subject to probate. After the trustor’s death, the trustee must administer and distribute the property to the beneficiaries listed in the trust instrument without court supervision.
Also, trusts are valuable legal tools in the event of the trustor’s incapacitation. If the trustor becomes unable to manage his or her personal affairs, all assets held in a trust are managed by the trustee.
Please note that trustors must also designate successor trustees in case the original trustee dies, becomes unable to fulfill the trustee’s role, or resigns.
How Much Does it Cost to Put Your House in a Trust in Florida? – The Verdict
Transferring a residential property to a standard Florida trust would generally cost the trustor between $1,500 and $2,500. Once the trust is established, there are also maintenance fees and the trustee’s compensation fees based on the value of the trust.
It is fundamental to consult with an expert Florida attorney to identify whether transferring the title of your house to trust is the best approach – especially if the property is eligible for homestead exemption.