When it comes to using trusts to purchase Florida property, there’s definitely a lot to consider. What kinds of trusts can be used? Does it help avoid probate? What are the tax implications? In short, what are the advantages and disadvantages of trusts and is it worthwhile?
Let’s tackle the last question first. Is it worthwhile? The answer is – there is no simple, universal answer. Whether this is worthwhile for you depends on your specific circumstances. Therefore, it is important to consult with legal and financial advisors before pursuing this option.
Having said that, there are several pros and cons worth thinking about that we can summarize here. In general, the advantages of using trusts for this purpose are:
There are also some general disadvantages. These are:
Of course, this is largely contingent on what type of trust you use to make the purchase. The two most common types are revocable living trusts and Florida land trusts, which are both legal mechanisms for the purchase, ownership, and transfer of real estate.
Then there’s the Real Estate Investment Trust (REIT). This type of trust is actually a “corporate entity” that is specifically created in order to make certain real estate investments. These investments in “income producing” real estate are designed to lessen or eradicate corporate income. In exchange, the REIT passes the bulk of its income to its investors. Because there are different subsets of REIT with their own advantages and disadvantages, it is crucial to consult with an experienced real estate attorney before pursuing this option.
For more information about all of these possibilities and to learn which, if any is best for you, contact Loshak Leach LLP today. One of our knowledgeable Estate Planning attorneys will be happy to speak with you and let you know how we can help.