If you have a Florida Revocable Trust, then you probably have been told that you should title your real estate into your Trust.  What exactly does that mean?

The idea behind Revocable Trusts or Living Trusts, as they are sometimes called, is to avoid probate at death or guardianship during lifetime in the event of an incapacity.  This works only if your assets are owned by your Trust.  For real estate this means that you need to transfer your real estate by executing a deed in favor of your Revocable Trust.

We often make this recommendation for investment real estate or second homes, but not a primary residence if that residence is located in Florida.  Our State has some quirky rules when it comes to a person’s homestead.  For example, if you are married, you cannot devise your homestead to anyone other than your spouse, unless your spouse validly waives his or her right to receive your home.

Therefore, if you transfer your home into your Florida Revocable Living Trust, the Trust must provide that your homestead will pass at your death to your spouse.  If it does not, then the devise is not valid.  Rather strange rule that we have, but as long as we are aware of it, we can properly plan for it or around it.

Investment real estate or second homes are not subjected to the homestead rules discussed above, and so, transferring those properties to a Revocable Trust will remove them from the probate experience.  Moreover, if your investment property is located out of state, it would be subjected to a probate in the state in which it is situated.  This is called an ancillary probate administration, which could be an additional headache on your family if you don’t place the property in your Trust.

A side note on the costs to transfer real estate to a Revocable Trust – the cost, other than document preparation fees, is the recording cost.  Generally, there are no documentary stamp taxes assessed on the transfer.

We’d be happy to explore your personal situation to find out if transferring your real estate to a Revocable Trust would be worthwhile.  Feel free to call!