Florida Irrevocable Grantor Homestead Trust: Having Your Cake and Eating It Too — First Course

The saying “you can’t have your cake and eat it too” means you can’t have two good things at once. But in Florida, using a special trust called a Florida Irrevocable Grantor Homestead Trust (FIGHT), you might be able to keep the benefits of homestead protection without some of the drawbacks. The FIGHT is a way to protect your home from creditors and taxes by putting it into a special trust. This trust also helps you avoid some legal restrictions on passing your home to your family after you die. It’s important to understand the rules and requirements of Florida homestead protection to make sure the FIGHT is the right choice for you. There are some important things to consider before using a FIGHT, like tax implications and mortgage clauses. It’s also important to carefully draft the FIGHT to make sure it meets your needs. The Florida Bar created a law called Section 732.4017 to clarify when someone can give away their homestead property before they die without it being treated like a gift in their will. This law says that as long as the person doesn’t keep the power to change their mind and take the property back, they can give it to someone else while they’re alive. This law was made to help parents who have young kids and want to make sure their kids can keep the family home if something happens to them. If all the rules are followed, the property will still be protected from creditors and taxes. In the case Stone v. Stone, the court had to decide if a property held in a trust could be given to someone else after the owner’s death. The owners, husband and wife, had separate trusts for their home, and when the husband passed away, the property was supposed to go to their daughter. The court had to determine if this was allowed under the law, since the wife was still alive and technically owned part of the home. The court ruled that the homestead was subject to the restrictions in the husband’s will because it was not transferred according to the terms of a certain trust. The wife also gave up her rights to the homestead by signing a deed that included the homestead as part of the property being transferred. The court pointed out that it’s okay for property owners to transfer homestead property to a trust, but the terms of the trust should control what happens to the property after the owner dies. This case shows that using a trust can help avoid certain restrictions, but it’s important to make sure the trust controls what happens to the property after the owner’s death. If someone transfers their property to a trust and still has the right to live there for life, the property may still be protected from creditors. This means that even if the person no longer owns the property, they can keep living there without worrying about their debts affecting it. This protection also applies if the property is passed on to someone else after the person’s death. So, as long as the trust is set up the right way, the property can be kept safe from creditors. After someone dies and their property is put into a trust, the homestead exemption and tax benefits can still be maintained. The person who set up the trust can still have the homestead exemption, and the property can still qualify for tax benefits as long as they have a beneficial interest in the property. If the property is put into a trust for the benefit of their family or heirs, the exemption and tax benefits can still apply. In Florida, a properly-drafted trust can still receive tax benefits for a homestead property. This means that the tax benefits for owning a home can still be received even if the home is put into a trust. This is supported by Florida law and court cases. It’s important to understand all the considerations before putting a home into a trust, which will be discussed in more detail later. In Florida, there are rules about protecting a family’s home from being taken by creditors or being given away in a will. If the home is in a city, only a certain amount of land around the home is protected. If it’s outside the city, a larger amount of land is protected. This is meant to make sure that a family doesn’t lose their home to debt or to someone else’s will. If someone owns a home in a city, the home is restricted from being given away in a will, unless the owner’s family lives there. If the home is outside of a city, it might not be restricted. There are rules about how to protect a home from being given away in a will, and there are some legal cases that show how these rules work. It’s also possible to use a special agreement to protect a home from being given away in a will. A QPRT is a trust that helps people save on taxes when they transfer ownership of their house to someone else. The Stone case in Florida showed that if a house is considered a homestead, the transfer of ownership may be restricted. This means that the person using the QPRT may not be able to sell the house right away. The court also used a previous case called Holden v. Gardner to define what counts as a homestead, which is important for how the QPRT works. In Florida, the homestead creditor exemption may apply to a trust if the heirs have the right to use the residence for life. However, if the beneficiary is only entitled to an equivalent value from the trust assets, the homestead creditor protection may be lost. The Florida Supreme Court has broadened the definition of “heirs” to include any family member within the category of persons in the state’s intestacy statute. In certain cases, where the transferor retains the right to reside in the property for a certain term, they may still be entitled to a homestead exemption. A Florida law article talks about how a person can put their home in a trust to save on taxes. The article cites a legal opinion that says it’s okay for a trust to own a home as long as the person who will live there gets to use it. The article is written by a lawyer who specializes in estate planning and tax law. It’s part of a series from the Real Property, Probate and Trust Law Section.

Source: https://www.floridabar.org/the-florida-bar-journal/florida-irrevocable-grantor-homestead-trust-having-your-cake-and-eating-it-too-first-course/