How to Put Your House in a Trust in Florida

Many of my clients express the desire to ensure a smooth transition to their heirs for their home without the complications of probate court. Let’s walk through the steps to put your house in a trust in Florida.

Why Put Your House in a Trust?

Let’s start with the basics: why consider a trust for your home? The answer is relatively straightforward. A trust can offer you several benefits, including avoiding probate, providing for minor children or family members who might not be financially savvy, protecting your estate from creditors, and possibly even reducing estate taxes.

Choosing the Right Trust for Your Home

The first step in the process is deciding what type of trust is right for you. The most common type in Florida is the revocable living trust. This type of trust allows you to maintain control over the property as the trustee while you’re alive and specifies how the property should be handled after your death. It’s flexible, amendable, and a popular choice for many homeowners.

Steps

Here are the steps to putting the house in a trust:

1. Draft the Trust Agreement: The trust agreement is the core document that outlines how your trust will operate. It names the trustee—who will manage the trust—and the beneficiaries. It’s crucial to work with an attorney to draft this document to ensure it’s legally sound and reflects your wishes accurately.
2. Selecting a Trustee: Your choice of trustee is important. You can select yourself during your lifetime, a trusted family member, or even a professional trustee. This person will be responsible for managing the trust according to your instructions laid out in the trust agreement.
3. Transferring Ownership of Your House: To fund the trust with your property, you will need to transfer the title of your house from your personal name to the trust. This is done by executing a deed, typically a quitclaim deed or warranty deed, that legally transfers the ownership.
4. Recording the Deed: Once the deed is signed, it must be recorded with the county recorder’s office where the property is located. This step is crucial as it makes the transfer public record and legally effective.

Important Considerations

• Inform Your Lender: If your home is mortgaged, you need to notify your lender about the transfer of the property into the trust. Most mortgage agreements allow such a transfer into a revocable trust without issue, but it’s best to inform them ahead of time to avoid any complications.
• Adjust Your Insurance: Make sure your homeowner’s insurance is updated to reflect the ownership change. The trust should be listed as the owner of the property on your insurance policy to ensure continuous coverage.
• Tax Implications: Transferring your primary residence to a revocable trust doesn’t create immediate tax consequences.

Homestead Exemption

You still get the homestead exemption after putting your house into a trust. Under Florida law, a person is entitled to the Florida homestead exemption even after the property is conveyed to a living trust.

We typically advise married clients to keep their homestead in personal names and to only convey the home to a trust after the death of a spouse. When a client is married, the home will automatically pass to the surviving spouse, who is guaranteed at least a life estate under Florida law.

Other situations, such as unmarried clients or when the home is not to pass to the client’s children, may warrant transfer to a trust sooner to achieve the client’s estate planning objectives.