If you wish to establish a trust fund, understanding the steps involved in this process is critical. Though you may be considering the different types of trust funds you can establish, or who you wish to appoint as your trustee, there may be one important aspect you’re forgetting to consider – how to actually transfer assets! Unfortunately, many are unaware of how to transfer assets like real estate into a trust in Florida. If this reflects your circumstances, you’ll want to keep reading to learn more about these matters, including the importance of working with Tampa trust lawyers to help guide you through this process.

Why Transfer Real Estate Into a Trust in Florida?

In general, one of the primary benefits of creating a trust fund is that it will avoid probate upon your passing. Probate is a long and tedious process that involves the court verifying the deceased’s will and distributing it according to the terms and conditions they have established. By avoiding this process, you can ensure your assets are immediately available for your beneficiaries.

Primary Benefits of Transferring Real Estate to a Trust

  • Avoids proceeding through the Florida probate process upon death
  • Allows immediate management by a successor trustee in the event of incapacitation
  • Confidential distribution of assets (probate is public record)
  • Allows you to control when and how beneficiaries receive assets
  • Irrevocable trusts allow asset protection
  • Simplifies multi-property estate administration

A properly funded revocable trust can provide protection against court-appointed guardianship in the event the owner of the property becomes incapacitated. The named successor trustee can immediately assume control of the property, allowing them to manage, refinance, and sell the real estate without court intervention.

What Types of Trusts Can Hold Florida Real Estate?

Before you are able to transfer assets to a trust fund, you must first ensure you have a valid trust established. The type of trust you create will impact control, protection, and the tax implications. Trust funds in Florida are governed in accordance with the Florida Trust Code, Chapter 736 of the Florida Statutes.

Under Florida Statutes § 736.0402, a trust is established only if there is a definitive beneficiary, a trustee with explicit duties, and a properly executed intent. Similarly, real property transferred into a trust fund must comply with Florida Statutes Chapter 689. Failure to meet these standards can invalidate the transfer of the property to the trust fund.

Common Trust Types Used for Real Estate in Florida

  • Revocable Living Trust
    • Most common option for estate planning
    • Grantor maintains control during the lifetime
    • Avoids probate but does not protect assets from personal creditors and lawsuits
  • Irrevocable Trust
    • Permanent transfer of ownership and subsequent control of an asset
    • Can protect assets from certain creditors
    • Cannot be easily modified after its creation
  • Special Needs Trust
    • Protect eligibility for certain government assistance programs
    • Used when a beneficiary receives SSI or Medicaid

What Steps Must I Take to Transfer Real Estate?

In general, the process of transferring assets into a trust fund involves retitling the assets. Listing property in the trust fund is not enough.

Step 1. Create and Execute the Trust Fund

  • Draft and sign a trust agreement in accordance with Florida law
  • Ensure the trust is named property
  • Appoint a trustee and consider naming a successor trustee
  • Ensure that you adhere to all Florida execution requirements

Step 2. Prepare a New Deed

In order to transfer property to your trust, you’ll need to create a new deed that transfers ownership from you as an individual to you as the trustee of a trust fund. As such, common deed options for those establishing a trust in and around Tampa include:

  • Quitclaim Deed
    • Transfers interest held
    • Used when transferring property into your own trust
  • Warranty Deed
    • Provides guarantees regarding the title
    • More common for third-party transactions

Additional deed drafting matters that must be considered in Florida include:

  • Enduring the grantor and trustee names match the trust fund exactly
  • Including a full legal description of the property
  • Including the full trust name and the date on which it was executed
  • Confirmation of the grantor’s marital status
  • Reviewing any stamp tax implications is applicable

Step 3. Sign, Notarize, and Witness the Deed

In order to execute a deed, Florida law requires:

  • Two eligible witnesses at the signing
  • Notarization
  • Comprehensive legal description of the property
  • Accurate trust name and trustee designation

Step 4. Record the Deed with the County

When a new deed is established in the Tampa Bay area, including Hillsborough, Pinellas, and Pasco Counties, you must ensure that it is properly recorded with the County Clerk in the county where the real estate is located. Each court may implement local procedures and fees that will vary by county. For property in Tampa, you must contact the Hillsborough County Clerk of Courts. This step is imperative to ensuring that the transfer is legally recognized, which can ultimately protect against future title disputes.

Step 5. Notify Your Mortgage Lender, If Applicable

If the property you transferred to the trust fund has a mortgage, you’ll need to:

  • Review your loan agreement
  • Inform your mortgage lender of the change
  • Ensure compliance with the federal Garn-St. Germain Act

Under federal law, transferring property to a revocable living trust where you remain a beneficiary typically does not trigger a due-on-sale clause.

Common Mistakes to Avoid When Funding a Trust with Real Estate in Tampa

Unfortunately, erroneous and improper transfers can disrupt your estate plan and put your property at risk. That is why creating an estate plan under the guidance of an experienced attorney is generally in your best interest, as they can help you avoid the most common mistakes to ensure your wishes are honored.

Most Common Errors That Cause Probate or Title Problems

  • Failing to record the deed
  • Using an improper trust name format
  • Failing to complete the required legal descriptions
  • Failing to update the title insurance
  • Forgetting to transfer property held out of state
  • Failing to consider homestead protections

Florida Homestead Considerations

Florida homestead property is eligible for special constitutional protections, which require additional, careful consideration when transferring property. As such, you’ll need to ensure adherence to these matters to preserve:

  • Property tax exemptions
  • Creditor protections
  • Restrictions on devise for those married or who have minor children

How Real Estate Differs From Funding Other Assets

Unlike other types of property in Florida, real estate cannot be included in a trust fund by simply updating the beneficiary designation.

How Are Other Assets Funded Into a Trust?

  • Bank Accounts: Retitle in the name of the trust fund
  • Retirement Accounts: Examine tax implications before naming the trust
  • Life Insurance: Name the trust as the primary beneficiary
  • Brokerage Accounts: Update ownership registration to name the trust

Contact an Experienced Tampa Trust Attorney Today

As you can see, the process of transferring real estate into a trust fund is not as simple as you may assume. That is why it’s in your best interest to connect with an experienced attorney with Tampa Law Group to help guide you through this process. Our team can help you explore the different options so you can make the most informed decisions for your circumstances. Connect with us today to learn how we can help you achieve peace of mind for the future.