How to Preserve Florida’s Homestead Exemption With an Out-of-State Trust
Florida’s homestead exemption is one of the strongest in the nation, and it can form the foundation of many effective estate planning strategies. However, the presence of an out-of-state trust could negate these benefits, and this might be an issue if you have recently relocated to Florida. To learn more about this issue, consider speaking with an experienced estate planning attorney in St. Petersburg.
You May Need to Amend the Trust to Include Specific Language
Although out-of-state trusts are still valid under Florida law, you may need to amend your trust in order to preserve Florida’s homestead exemptions. This is particularly important for new residents of the Sunshine State.
You may need to add specific language to your trust. As the Attorney General notes, the beneficiary of a trust does not necessarily have legal title to real estate when that real estate is placed into the trust. This is true even if the real estate is a personal residence or “homestead.”
This is important because the Florida Constitution specifically states that the normal homestead exemption only applies to those who have legal title to their permanent residences. Fortunately, the solution is relatively simple. You need to add specific language to your trust stating that the beneficiary (you) has the right to live in your Florida homestead for the rest of your life.
You might also need to choose a specific type of trust in order to enjoy Florida’s homestead exemption. Whatever your situation might be, you should discuss your out-of-state trust with an estate planning attorney who understands Florida law.
This issue is particularly serious for new Florida residents with out-of-state trusts. If you created your trust with help from an attorney in a different state, they are likely unfamiliar with the specific requirements under Florida law. If you created your trust after you arrived in Florida, your trust is much more likely to comply with these specific requirements.
Why Is the Florida Homestead Exemption So Important?
Why bother trying to preserve the Florida homestead exemption in the first place? Because this is one of the most powerful asset protection strategies in the country. While other states have homestead exemptions, Florida does not set an upper limit on this exemption. In other words, creditors can never force you to sell your home, no matter how much you owe. For example, you might owe $2 million. If you own a $2 million house, creditors cannot force you to sell in this situation.
Can a St. Petersburg Estate Planning Attorney Help Me?
If you want to learn more about how an out-of-state trust might affect the homestead exemption in Florida, consider speaking with an experienced estate planning attorney in St. Petersburg. New residents should take specific steps if they want to preserve Florida’s unique homestead exemptions, and guidance from a lawyer can make this process easier. Contact Drude Tomori Law today to learn more about the next steps.
Source:
myfloridalegal.com/ag-opinions/homestead-exemption-and-inter-vivos-trust-2