Can a Florida Trust Own Property in Another State?

Yes, a Florida trust can own property in another state. When you establish a trust in Florida, it can hold various assets, including real estate located in other states. This allows you to manage out-of-state properties effectively while maintaining the legal protections and flexibility a trust offers.

What Is a Trust?

A trust is a legal arrangement where a person (the grantor) transfers assets to a trustee, who manages those assets for one or more beneficiaries.

The grantor sets the terms, which govern how the trust assets are managed, distributed, or preserved over time.

Trusts can be revocable, meaning they can be changed or dissolved by the grantor, or irrevocable, meaning the terms cannot be modified without beneficiary consent.

Why Would You Want a Trust to Own Property in Another State?

Owning out-of-state property through a trust helps avoid ancillary probate.

Ancillary probate is a separate legal process required to direct the distribution of real estate to beneficiaries after the owner dies. It can be costly and time-consuming.

For Florida residents, a Florida trust can bypass this process entirely by holding the title to out-of-state real estate.

Frequently Asked Questions

1. Can a Florida trust hold any type of property in another state?
Yes, a Florida trust can hold residential, commercial, and undeveloped land in other states, provided it complies with the laws of those states.

2. Are there tax implications for owning out-of-state property in a Florida trust?
Potentially. While Florida has no state income tax, other states may impose property taxes or income taxes on rental income generated from properties located there.

3. Will the trust need to be registered in the other state?
A trust does not need to be registered in the state where the property is located. However, it must comply with local laws, which may include specific deed requirements or tax filings.

4. How does a Florida trust manage real estate in another state?
The trustee, appointed by the grantor, manages the out-of-state property under the terms of the trust. This includes responsibilities like paying property taxes, collecting rent, maintaining the property, and making decisions about selling or leasing.

5. Can you transfer out-of-state property into an existing Florida trust?
Yes, transferring out-of-state property into an existing trust involves retitling the property deed in the name of the trust.

About the Author

Gideon Alper is an attorney who specializes in asset protection planning. He graduated with honors from Emory University Law School and has been practicing law for almost 15 years.

Gideon and the Alper Law firm have advised thousands of clients about how to protect their assets from creditors.