≡ Menu
≡ Menu

Florida Land Trusts vs LLCs for Real Estate Investors [Which is Best?]

Florida Land Trust vs. LLCs

This topic is a key Florida asset protection question for real estate investors who hold multiple properties.  This question concerns whether to title your real estate investment property in Florida in Florida Land Trusts vs. LLCs in Florida and this depends upon the goals and preferences of the investor.

The 2 most common “recommended” ways to hold real property investments in Florida are a Florida LLC or Florida Land Trust.

Exploring the pros and cons of these Florida estate planning options is the stuff of this week’s article.

Florida Land Trusts vs Florida LLCs for Real Estate Investors

For Florida investors doing estate planning, Florida LLCs and Florida land trusts are both effective ways to hold real property depending upon one’s goals.

The Florida LLC

LLCs are extremely simple to set up in virtually every State and everyone in the real property world, from brokers to County workers, essentially knows about them.

This means that people are not typically confused by your asset protection structure (of holding assets in an LLC) and this means that your daily life may be less complicated.

LLCs are extremely flexible, and if prepared properly, offer key asset protection benefits.

Of course, by prepared properly, I mean that setting one up yourself without an Operating Agreement may not be an effective strategy, whereas, getting professional help and creating a solid LLC structure goes a long way.

If you set up an LLC for estate planning purposes to hold your real property investments, you’ll need to decide whether you’ll be the only owner of the membership units (a single member LLC) or whether you’ll have other partner members (multi-member LLC).

In many jurisdictions, such as Florida, multi-member LLCs offer a more solid asset protection plan than the single member LLC.

My recommended process to create an LLC is to file Articles of Organization with your State of choice and then have supporting documents created to support your LLC.   The State will require a renewal fee every year and you’ll need to decide who your Registered Agent will be…whether you or a third party.

We’ve also discussed in previous posts what should be considered in creating a Florida LLC operating agreement.

After this, the real property may be transferred to the LLC and you’re good to go.  An LLC will require an annual state maintenance fee and needs to be administered with certain formalities.

Finally, an LLC can be set up to avoid probate in Florida either by placing the ownership of membership interest in a revocable living trust in Florida OR by including a transfer upon death provision in the Florida LLC Operating Agreement.

The Florida Land Trust

A Land Trust is essentially holding real property by contract. The Florida Land Trust option is different from an LLC in Florida because the former is typically is not filed with the State and thus offers greater privacy and anonymity.

So, the Land Trust document (contract) is created and the Trustee (who must be a third person or entity) is appointed by the Trust.  The Trustee will essentially hold the real property for you or your entity of choice as the Beneficiary.  Therefore, a key advantage to Land Trusts is privacy.  The public records for property that is held by a Land Trust is afforded greater privacy because only the land trust name needs to appear on the deed.

FL Homestead Options

Another possible advantage to Florida Land Trusts vs. LLCs is that a Florida homestead property may be held in a Land Trust.  As a quick overview of homestead protection in Florida, the FL Constitution affords asset protection of the full value of a home that is within certain parameters and is a primary residence in Florida. Although it varies from county to county, a Land Trust may be used to provide additional privacy around homestead ownership.

Finally, avoiding having to open a probate in Florida is another distinct advantage of Florida Land Trusts because a beneficiary is designated for the real estate and if an individual beneficiary passes, a successor can be designated.

Key disadvantages are that City and County officials may become confused by Land Trusts whether dealing with a homestead or not. You also need to be comfortable essentially conveying your title to a third party as the Trustee if you go this route, noting that the Trustee will be bound by fiduciary duties and the terms of the Trust.

Florida Land Trustees often charge annual fees as well.

If you decide to go with the Land Trust option, you can still utilize an LLC as the Beneficiary of the Land Trust, which can double your asset protection.  For more information about getting a Florida Land Trust visit here.

Real Estate Investors In States Other Than Florida, Texas, Arizona, Ohio, Illinois, Indiana, North Dakota, Virginia and possibly California, may not have the estate planning option of a Land Trust.

The states referenced above are the only ones that have land trust statutes and generally the real property must be situated in the State that the Land Trust is created.

This is a key distinction with Land Trusts vs LLCs because a Florida LLC can hold real property located in Texas, and this is usually the case with LLCs in various States.

Moreover, ideally the Trustee should also be located in that same jurisdiction as the Trust and the real property, so the rules for Land Trusts may be more restrictive than LLCs, because the LLC Managers can be anywhere (although the Registered Agent must be locally based in the State).

Also, with Land Trusts, if you have multiple real properties in the same State, they must be “contiguous” (next to each other) in order to title them in the same Land Trust, and this is not the case with LLCs.

Of course, all of the above is a basic distinction and a great asset protection plan may utilize both Land Trusts and LLCs.

All of the above should also tie into your overall estate plan and this may require directing the real property in your LLC or Land Trust to your Florida revocable living trust upon death.


16 comments… add one
  • Eyal izik May 26, 2019, 7:19 am

    I would like to open a land trust or trust In Florida and to put property that I am planing to buy

    Can you please let me know what will be the cost to open a land trust or a trust?

    Can I put 2 properties in the same Trust or Land Trust and if it a good idea.

    Thank you

    • gibbslawfl May 26, 2019, 10:06 am

      Hello, thanks for reading and commenting. In general, you can’t put more than 1 property in a FL Land Trust unless they are contiguous (next to each other). Cost will be based upon how complicated the transaction is and we always begin with an initial consultation. Let us know if you’d like to get started.

      Best, Steve Gibbs, Esq.

      • Francisco Lopez July 28, 2020, 11:41 am

        Need to create a Land Trust for my commercial building

        • gibbslawfl July 28, 2020, 9:36 pm

          Hello Francisco, land trust can be used for a commercial building yet may or may not be advisable, with an LLC as a viable alternative, based upon your goals an circumstances. A confidential consultation is recommended and you can schedule this at info@gibbslawfl.com.

          Best, Steve Gibbs, Esq.

  • robert h konegen February 22, 2020, 2:36 pm

    I am interested in learning more about Florida Land Trust, the initial cost to set it all up, and whatever the expense is to manage it on an annual basis?
    Thank you,

    • gibbslawfl February 23, 2020, 5:12 pm

      Hello Robert, thanks for commenting. Feel free to reach out to Gene at admin@gibbslawfl.com for all scheduling concerns.

      Best, Steve Gibbs, Esq.

  • Gene Eleveld June 1, 2020, 6:12 am

    Buying a residential property and want to put it in a Florida land trust.
    What is the cost?

    • gibbslawfl June 1, 2020, 1:56 pm

      Hello Gene, I would suggest having us explore why you’d like the land trust because sometimes LLCs are preferable. LLC fees range from $1500 on up for traditional services but rolling out some web based options in the near future. Keep an eye on the website for details. If you’d like a conversation to discussion, e-mail Gene at admin@gibbslawfl.com to discuss.

      Best, Steve Gibbs, Esq.

  • Kelsey August 26, 2020, 3:06 pm

    Does the trustee have to be the same as the beneficiary? For example can the trustee be my LLC and the beneficiaries be me and my husband? Also in Florida can you obtain a mortgage while the property is in the name of the land trust?

    • gibbslawfl August 28, 2020, 11:12 am

      Hi Kelsey, thanks for your comment. Generally, you cannot be the trustee of your land trust (either as an LLC or individually). So you would typically have an independent trustee and you or your LLC may be beneficiary. This is different than with a revocable living trust where you (individually and not your LLC) can be both trustee and beneficiary.

      Best, Steve Gibbs, Esq.

  • Dave December 8, 2020, 8:48 pm

    Hello, my brother and I have an investment commercial building in Florida from a trust. The trust needs to dissolve? So we need to put the building in an LLC or a new Trust. The building has a long term tenant/lease that wants to remain in the building and has offered to buy when we are ready to sell. Also, I live in SC and my brother lives in NY. What is the best to form an LLC or a new Trustee.

    • gibbslawfl January 12, 2021, 4:16 pm

      Hi Dave, the LLC should be formed in FL with a well prepared Operating Agreement. This will offer the most effective asset protection with flexibility in my opinion. Let us know if we can help: info@gibbslawfl.com.

      Best, Steve Gibbs, Esq.

  • chandu February 7, 2021, 12:36 pm

    Hello there!
    this is really good info. I came across your article when i was searching for land trust in Florida and how is it different in Florida then rest of the states. As of i am aware in other states the land trust is to hold title or tile holding vehicle for anonymity. is there any added advantage in Florida or how is it different then other states. Also, i am an RE investor looking to form a structure with my estate planning shadowing with asset protection(inside/outside protection), creating anonymity and also looking for tax advantage structure. As you said , yes it is easy to create an LLC but more logical to create a taxation structure and Operating agreement also i see you put a line saying the multi-member llc has provisions then single member llc not sure on member managed or manager managed. upon primary investigation on my req’s i came up with a structure but honestly looking for professional service/help with affordable price range for services when compare to my income/liabilities. Can i seek your services followed by a consultation?

    • gibbslawfl February 9, 2021, 1:19 pm

      Hello and thanks for your inquiry. Sorry for the delay as am just getting to blog comments now. Land trusts can be problematic and LLCs are often preferable for a number of reasons. If you’re interested in a consultation to discuss further, connect with Gene at info@gibbslawfl.com.

      Best, Steve Gibbs, Esq.

  • kathy November 27, 2022, 1:58 am

    Hello Steve,
    Happy Holiday! I came across your article when I search Land Trust and FL LLC information, There is great information on this Blog and it helps me a lot.

    I currently live at California. I created a LLC in state of FL to manage my two rental properties and I am single member for the LLC. I just saw this statement in your article :

    In many jurisdictions, such as Florida, multi-member LLCs offer a more solid asset protection plan than the single member LLC.

    So for the asset protection purpose, how can I add additional member into Florida LLC? and I do have revocable living trust .

    2. And I also saw this statement:
    “because a Florida LLC can hold real property located in Texas”, I also have rentals in Maryland, so far they are all deeded to Florida LLC by Title Company ( I do not know how they did) so, can you explain how Florida LLC can hold the properties in other states?

    3. For this statement

    “Finally, an LLC can be set up to avoid probate in Florida either by placing the ownership of membership interest in a revocable living trust in Florida OR by including a transfer upon death provision in the Florida LLC Operating Agreement.”

    How to include transfer upon death provision in the Florida LLC operating Agreement or placing the ownership of membership interest in a revocable living trust in Florida?


    • gibbslawfl December 1, 2022, 5:28 pm

      Hi Kathy, this is a long list of specific items that really warrant a legal consultation because you’re asking for specific guidance for your situation vs general information.

      So, given those ethical constraints, I’ll leave it there.

      Best, Steve Gibbs, Esq.

Leave a Comment