If your home is owned by your trust, can you still get homestead exemption in Florida?
Ronald: Yes sir, good morning. Thank you so much for taking my call. I've got a couple of properties here, residential. Excuse me, I'm going to stop driving. You hear me bouncing around. I've got one that is homesteaded and I'm interested in putting it into a trust. I've never done it before, but anyway my question about that is, can I put my homesteaded property into a trust and still keep my
homestead exemptions?
Attorney Tom Olsen: Ron, first of all we recommend that people do not put their homes under the trust, but if you go forward and you change the title to your home into the name of the trust, the answer is yes, you can get homestead exemption. However, it requires that you have magic language within the deed itself or within a trust itself. If you have that magic language within the deed itself or the trust itself, you can claim homestead exemption for real estate tax savings purposes.
Ronald: Perfect, really appreciate you taking my call. Thank you so much.
Tom: Hey Ronald, before we hang up now, you told me that you have another piece of property as well, is that right?
Ronald: Yes, that one I bought it about 20 years ago. It's a rental unit and I'm thinking about putting that one into a trust also, but I don't have homestead on that one.
Tom: Ron, when people talk about using trust out there, typically they're all talking about the same thing, a revocable living trust. People are using a revocable living trust for the purpose of avoiding probate. Tell me, what are you going to be using your trust for?
Ronald: Hopefully for passing on to kinfolk after I tip over. That was a real thought about it. It makes it easier for the property to go to my daughter or something like that.
Tom: I assume your daughter's an adult, is that right?
Ronald: Just turned 18, yes.
Tom: Ronald, we talked about using a trust for the purpose of avoiding probate. A second reason that people sometimes use a trust is that when they have the young children and they don't want to turn your assets over to their young children, often we're talking about kids that are 8 or 9 or 10 years old. Your daughter's 18. Even at 18 she's a legal adult, but she may be too young to receive your assets if you were to pass away in the near future.
Ronald: You got that right.
Tom: Your living trust would serve two purposes for you. Number one purpose would be to avoid probate and right on, that's the right thing to do. Then number two, your trust would typically say that if you passed away and any of your beneficiaries, whether they're your children or your grandchildren, are under the age of 25, then their share would be held in trust. It would be used to help your beneficiary, your child, or your grandchild, go to college, buy a house, buy a car. Typically then would say they would not get their money until they reach the age of 25. I'm just making up this age 25, that's just standard. If you said, Tom, I don't want her to get it till age 30 or 35, you can certainly arrange your trust to say that.
Ronald: I'm already thinking about 25, so you hit it nail on the head, yes.
Tom: Ron, you, with your living trust, it's going to stay as long as you are alive. You are the trustee of your trust. You're in charge. You can do whatever you want to. Your trust is going to need to name a successor trustee. That typically would not be your daughter because her money is going to be held in trust. It might be a brother, a sister, a niece, nephew, that would, if you passed away, would be doing two things. Number one, settle your estate. If you passed away, pay your final bills, doctors, hospitals, credit cards, file a final income tax return for you. Then manage your daughter's share of your estate on her behalf. Use it to help her go to college, help her buy a car, help her buy a house, and then turn it over to her outright free of trust when she turns age 25.
Ronald: Perfect. Perfect. Greatly appreciate you taking my call. It answers all my questions. Thank you.
Tom: Ronald, we're the Olsen Law Group in Orlando. We'd love to assist you with doing that living trust. Feel free to give us a call next week at 407-423-5561 or look at us through our website, olsenlawgroup.com. Ronald, thank you for the great question. We appreciate it.
[00:04:36] [END OF AUDIO]