Can a Living Trust Qualify for the Florida Homestead Exemption?

You can still get the homestead exemption even if your home is owned by your living trust. In Florida, a homestead exemption can offer significant property tax savings and legal protections for a homeowner’s primary residence. However, whether a living trust can qualify for a Florida homestead exemption depends on how the trust is structured and the specific circumstances.

Ownership Through a Trust

Florida law accommodates the homestead exemption for properties in a revocable living trust. This arrangement hinges on the trust beneficiary, who should also be the home’s occupant, maintaining direct control over the trust.

The individual must have the authority to revoke the trust, signifying they possess substantial control over its assets. In this context, the beneficiary, who establishes the trust, must use the property as their primary residence to qualify for the homestead exemption.

The rationale behind this provision is to ensure that the homestead protection and tax benefits extend to those who genuinely use the property as their primary and personal residence, aligning with the spirit of the Florida Constitution’s homestead exemption.

Revocable vs. Irrevocable Trusts

The distinction between revocable and irrevocable trusts plays a pivotal role in determining eligibility for the homestead exemption.

For revocable trusts, where the settlor (the person who creates the trust) retains the power to amend or revoke the trust, qualifying for the exemption is more straightforward. This is because the settlor can be considered the equitable owner of the property, as they retain control over the trust’s assets, including the home.

In contrast, with irrevocable trusts, the settlor relinquishes control over the trust’s assets, making it more complex to claim the homestead exemption. In such cases, the beneficiary of the trust—who must reside in the property—must demonstrate that they hold an equitable title to the property, which can be more challenging without the direct control characteristic of revocable trusts.

Legal Requirements

The Florida Constitution provides the legal foundation for the homestead exemption, but specific criteria must be met to benefit from it.

Primarily, the property must be the owner’s permanent residence or a dependent of the owner. When a trust owns the property, the law looks at the beneficiary of the trust to determine if it can be deemed the equitable owner for the exemption.

Equitable ownership implies that while the trust holds the legal title of the property, the beneficiary has the right to use and enjoy the property, particularly as their primary residence.

This concept is crucial in extending homestead protection to properties held in trusts, as it recognizes the beneficial interest of the resident over the mere legal title held by the trust.