Florida Land Trust Agreement

FLORIDA LAND TRUST AGREEMENT

TABLE OF CONTENTS

1. Parties and Establishment
2. Recitals
3. Definitions
4. Trust Property
5. Trustee's Title; Statutory Powers
6. Beneficial Interest — Personal Property Designation
7. Power of Direction
8. Trustee's Duties (Limited per § 689.071(2)(c))
9. Trustee Liability and Indemnification
10. Successor Trustee
11. Succession of Beneficial Interest on Death (POD)
12. Assignment of Beneficial Interest
13. Homestead Acknowledgment
14. Documentary Stamps; Tax Matters
15. Term and Termination
16. General Provisions
17. Execution, Witnessing, and Notarization

ARTICLE I — PARTIES AND ESTABLISHMENT

Section 1.1 Trust Name

This trust shall be known as the [TRUST NAME] Land Trust, dated [__/__/____] (the "Land Trust" or "Trust"), created under Fla. Stat. § 689.071.

Section 1.2 Settlor

Settlor:

Section 1.3 Trustee

Trustee:

Section 1.4 Beneficiary(ies)

Initial Beneficiary(ies):

Total: 100%

Section 1.5 Holder of the Power of Direction

ARTICLE II — RECITALS

WHEREAS, Settlor is the record owner of the real property described in Schedule A;

WHEREAS, Settlor desires to convey legal and equitable title to said real property to Trustee in trust pursuant to the Florida Land Trust Act, Fla. Stat. § 689.071;

WHEREAS, a contemporaneous Deed in Trust has been or will be recorded that expressly confers on Trustee the powers required by § 689.071(3) and § 689.073;

WHEREAS, the parties intend the beneficial interests hereunder to be personal property only, as provided in § 689.071(6);

NOW, THEREFORE, in consideration of the mutual covenants herein and the sum of $10.00 and other good and valuable consideration, the parties agree as follows.

ARTICLE III — DEFINITIONS

Capitalized terms shall have the meanings set forth in Fla. Stat. § 689.071(2) and as supplemented below:

"Beneficial Interest" — the vested or contingent interest of a Beneficiary in this Trust, designated as personal property under Article VI.

"Beneficiary" — any person or entity holding a Beneficial Interest. A Trustee may also be a Beneficiary (§ 689.071(2)(b)).

"Holder of the Power of Direction" — the person identified in Section 1.5 with authority described in § 689.071(2)(d).

"Recorded Instrument" — the Deed in Trust recorded in the public records of [COUNTY] County, Florida, conferring the powers described in § 689.071(3) and § 689.073(1).

"Trust Property" — the real property described in Schedule A, including all appurtenances, additions, and proceeds.

"Trustee" — the person or entity named in Section 1.3 and any successor.

ARTICLE IV — TRUST PROPERTY

Section 4.1 Conveyance

Settlor has conveyed or will simultaneously convey to Trustee by Recorded Instrument the real property legally described in Schedule A.

Section 4.2 Additions

Additional real property may be added by recorded instrument conferring the same statutory powers on Trustee, subject to Trustee's written acceptance.

ARTICLE V — TRUSTEE'S TITLE; STATUTORY POWERS

Section 5.1 Vesting Under § 689.071(3)

By the Recorded Instrument, both legal and equitable title to the Trust Property is vested in Trustee, with full power and authority to:

(a) protect, conserve, sell, lease, encumber, partition, exchange, convey, mortgage, or otherwise manage and dispose of the Trust Property and any interest therein;

(b) execute deeds, leases, mortgages, satisfactions, releases, contracts, and other instruments;

(c) hold proceeds and reinvest as directed.

Section 5.2 No Duty to Inquire (§ 689.071(4))

Any third party dealing with Trustee under the Recorded Instrument is not obligated to inquire into Trustee's authority, the identity of any Beneficiary, the application of consideration, or any unrecorded declarations or agreements collateral to the Recorded Instrument.

Section 5.3 No Merger; Statute of Uses Inapplicable

Pursuant to § 689.071(4)–(5), the Statute of Uses (Fla. Stat. § 689.09) and the doctrine of merger do not execute this Trust or vest the Trust Property in any Beneficiary, regardless of any lack of duties on Trustee or the passive nature of the Trust.

ARTICLE VI — BENEFICIAL INTEREST: PERSONAL PROPERTY DESIGNATION

Section 6.1 Personal Property Only (§ 689.071(6))

The interest of each Beneficiary in this Trust is hereby expressly declared to be personal property only. This designation is controlling for all purposes when such determination becomes an issue under the laws or in the courts of Florida.

Section 6.2 No Real Property Interest

No Beneficiary has any legal or equitable interest in the Trust Property as real estate, except as provided in Article XIII (Homestead) and except as may arise upon termination of this Trust.

Section 6.3 Tax Treatment

For federal income tax purposes, the Trust is intended to be disregarded as a grantor trust under IRC §§ 671–679, with all items of income, gain, loss, deduction, and credit passing through to the Beneficiary(ies).

ARTICLE VII — POWER OF DIRECTION

Section 7.1 Vesting

The Power of Direction is vested in the Holder identified in Section 1.5, in accordance with Fla. Stat. § 689.071(2)(d).

Section 7.2 Exercise

Trustee shall act with respect to the Trust Property only upon the written direction of the Holder of the Power of Direction (or, in the absence of a designated Holder, by direction of all Beneficiaries or a majority of Beneficial Interests as specified herein).

Section 7.3 Successor Holder

Upon the death, incapacity, or resignation of the Holder, the Power of Direction shall pass in the following order:

Section 7.4 Trustee Reliance

Trustee may conclusively rely on any written direction reasonably believed to be genuine and signed by the Holder.

ARTICLE VIII — TRUSTEE'S DUTIES (LIMITED PER § 689.071(2)(c))

Section 8.1 Limited Statutory Duties

Consistent with Fla. Stat. § 689.071(2)(c), Trustee's duties are limited to:

1. The duty to convey, sell, lease, mortgage, or deal with the Trust Property, or exercise such other powers concerning the Trust Property as provided in the Recorded Instrument, in each case as directed by the Beneficiaries or by the Holder of the Power of Direction;
2. The duty to sell or dispose of the Trust Property at termination of the Trust;
3. The duty to perform ministerial and administrative functions delegated to Trustee in this Agreement or by the Beneficiaries or the Holder of the Power of Direction.

Section 8.2 No Affirmative Management Duty

Trustee shall have no duty to inspect, manage, insure, repair, maintain, lease, pay taxes on, or otherwise undertake active responsibility for the Trust Property except upon written direction.

Section 8.3 No Investment Duty

Trustee shall have no duty to invest, reinvest, or diversify.

Section 8.4 Beneficiary Control

The Beneficiaries shall have the exclusive right to manage, possess, lease, collect rents from, and otherwise enjoy and control the Trust Property, subject to the directions given to Trustee.

ARTICLE IX — TRUSTEE LIABILITY AND INDEMNIFICATION

Section 9.1 Limitations on Personal Liability

Trustee shall have the limitations on personal liability provided by Fla. Stat. §§ 736.08125 and 736.1013, applied to the Trustee under § 689.071(7).

Section 9.2 No Liability for Direction

Trustee shall not be liable for any act or omission taken in good faith upon written direction of the Holder of the Power of Direction.

Section 9.3 Beneficiary Indemnity

The Beneficiaries, jointly and severally, shall indemnify, defend, and hold Trustee harmless from claims, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of the Trust Property, except those arising from Trustee's willful misconduct.

Section 9.4 Beneficiary Non-Liability

Except as provided in § 689.071(8), no Beneficiary shall be personally liable, solely by reason of being a Beneficiary, for any debt, obligation, or liability of the Land Trust.

Section 9.5 Trustee Compensation

Trustee shall receive compensation of $[____] annually and reimbursement of expenses.

ARTICLE X — SUCCESSOR TRUSTEE

Section 10.1 Resignation or Removal

Trustee may resign upon thirty (30) days' written notice to all Beneficiaries and the Holder of the Power of Direction. The Holder of the Power of Direction may remove Trustee with or without cause upon written notice.

Section 10.2 Designation of Successor

The Holder of the Power of Direction shall designate a successor Trustee in writing. If no successor is designated within thirty (30) days, the Beneficiaries acting by majority of Beneficial Interests may designate a successor, or, failing that, any Beneficiary or the resigning Trustee may petition the circuit court of the county where the Trust Property is located.

Section 10.3 Vesting in Successor

Upon acceptance, the successor Trustee shall succeed to all rights, title, powers, and duties of the predecessor Trustee. To the extent required to confirm vesting of legal title, the parties shall execute and record a confirmatory deed or affidavit identifying the successor Trustee.

ARTICLE XI — SUCCESSION OF BENEFICIAL INTEREST ON DEATH (POD)

Section 11.1 Payable-on-Death Designation

Each Beneficiary's interest shall pass on death to the contingent beneficiary(ies) listed below without probate of the Trust Property:

Section 11.2 Mechanics

Upon receipt of a certified death certificate and a written claim from the contingent beneficiary, Trustee shall amend the Beneficial Interest register accordingly. No deed shall be required.

Section 11.3 Joint Beneficial Ownership

Beneficiaries may hold their interests as ☐ tenants in common ☐ joint tenants with right of survivorship (where personal-property survivorship is expressly created herein).

ARTICLE XII — ASSIGNMENT OF BENEFICIAL INTEREST

Section 12.1 Assignability

A Beneficial Interest is freely assignable by written assignment delivered to and acknowledged by Trustee.

Section 12.2 Form

An assignment shall identify assignor, assignee, percentage assigned, and shall be signed by the assignor before two witnesses and a notary (matching the formalities for the underlying trust amendment, Fla. Stat. § 736.0403).

Section 12.3 Effective Date

An assignment is effective upon Trustee's written acknowledgment on the Beneficial Interest register.

Section 12.4 Restrictions

☐ No restrictions on assignment.
☐ Right of first refusal among existing Beneficiaries.
☐ Consent of all Beneficiaries required.
☐ Other: [_______________________________]

ARTICLE XIII — HOMESTEAD ACKNOWLEDGMENT

Section 13.1 Florida Homestead Protection

If a natural-person Beneficiary occupies the Trust Property as his or her principal residence, the parties acknowledge that, under Fla. Const. art. X, § 4, and consistent case law (e.g., Engelke v. Estate of Engelke, 921 So. 2d 693 (Fla. 4th DCA 2006)), such Beneficiary may continue to assert Florida homestead protection (creditor exemption, tax exemption, descent-and-devise limitations, and ad valorem cap under Fla. Const. art. VII, § 6) notwithstanding the holding of legal title by Trustee, provided the Beneficiary's equitable interest is sufficient under controlling authority.

Section 13.2 Beneficiary Representation

The Beneficiary occupying the Trust Property as homestead represents and warrants:

Section 13.3 Devise and Descent

Trustee acknowledges that constitutional restrictions on devise of homestead (art. X, § 4(c)) may limit the disposition of the Beneficial Interest where the Beneficiary is survived by a spouse or minor child. The parties shall consult with Florida counsel before any contrary disposition.

ARTICLE XIV — DOCUMENTARY STAMPS; TAX MATTERS

Section 14.1 Documentary Stamp Tax

The parties acknowledge that the conveyance to Trustee, and any subsequent conveyance by Trustee, may be subject to documentary-stamp tax under Fla. Stat. § 201.02, except as exempt (including, where applicable, transfers between grantor and grantor's revocable land trust without change in beneficial ownership).

Section 14.2 Property Tax Roll

The Beneficiaries shall remain responsible for ad valorem real property taxes assessed against the Trust Property. Where homestead is claimed, the Beneficiary shall file the homestead application with the county property appraiser.

Section 14.3 Federal Tax

The Trust shall be treated as a grantor trust where applicable; otherwise, Beneficiaries shall report their respective shares of trust income.

ARTICLE XV — TERM AND TERMINATION

Section 15.1 Term

This Trust shall continue until the earlier of:

• ☐ [____] years from the date hereof;
• ☐ The date of full sale and distribution of the Trust Property;
• ☐ Written direction of all Beneficiaries to terminate.

Section 15.2 Rule Against Perpetuities

Notwithstanding any other provision, this Trust shall terminate no later than the period permitted by Fla. Stat. § 689.225 (Florida's rule against perpetuities — 360-year limit for trusts created after 2000).

Section 15.3 Distribution at Termination

Upon termination, Trustee shall, after payment of fees and obligations:

• ☐ Convey the Trust Property to the Beneficiaries as tenants in common pro rata to their Beneficial Interests; or
• ☐ Sell the Trust Property and distribute net proceeds pro rata.

ARTICLE XVI — GENERAL PROVISIONS

Section 16.1 Governing Law

This Trust is governed by the laws of the State of Florida, including Fla. Stat. § 689.071 et seq. and applicable provisions of the Florida Trust Code.

Section 16.2 Severability

If any provision is invalid, the remainder shall continue in effect.

Section 16.3 Amendments

This Agreement may be amended only by writing signed by Trustee, all Beneficiaries, and the Holder of the Power of Direction, with the same formalities as the original (two witnesses and notary).

Section 16.4 Notices

All notices shall be in writing and delivered to the addresses set forth in Article I.

Section 16.5 No Partnership

This Agreement does not create a partnership or joint venture.

Section 16.6 Counterparts

May be executed in counterparts.

Section 16.7 Due-on-Sale

Beneficiaries acknowledge potential due-on-sale consequences of conveyance to Trustee or assignment of Beneficial Interests. The Garn–St. Germain Act exemption may apply to residential property of fewer than five dwelling units where the borrower remains a beneficiary; verification with the lender is the Beneficiaries' responsibility.

Section 16.8 Confidentiality

Trustee shall not disclose Beneficial Interest ownership except as required by law, court order, or the Beneficiaries' written authorization.

Section 16.9 Construction

This Agreement and the Recorded Instrument shall be construed consistently. Where § 689.071 provides a default rule, that default applies unless varied herein.

ARTICLE XVII — EXECUTION, WITNESSING, AND NOTARIZATION

Section 17.1 Settlor's Signature

Executed in [_______________] County, Florida, this [____] day of [_______________], 20[____].

SETTLOR:

X _______________________________________
[PRINTED NAME]

Section 17.2 Trustee's Acceptance

TRUSTEE:

X _______________________________________
[PRINTED NAME / TITLE]
Date: [__/__/____]

Section 17.3 Beneficiary Acknowledgment

X _______________________________________
[BENEFICIARY 1 PRINTED NAME] Date: [__/__/____]

X _______________________________________
[BENEFICIARY 2 PRINTED NAME] Date: [__/__/____]

Section 17.4 Power of Direction Holder Acknowledgment

X _______________________________________
[HOLDER PRINTED NAME] Date: [__/__/____]

Section 17.5 Witnesses

Signed in the presence of the following two witnesses, who attest in the presence of each other and of the signatories:

Witness 1:

X _______________________________________
Printed Name: [_______________________________]
Address: [_______________________________]

Witness 2:

X _______________________________________
Printed Name: [_______________________________]
Address: [_______________________________]

Section 17.6 Notarial Acknowledgment

STATE OF FLORIDA
COUNTY OF [_______________]

The foregoing instrument was acknowledged before me by means of ☐ physical presence or ☐ online notarization, this [____] day of [_______________], 20[____], by [NAME OF SIGNATORY/IES], who is/are personally known to me or who has/have produced [_______________________________] as identification.

_______________________________________
Notary Public, State of Florida
Print Name: [_______________________________]
My Commission Expires: [__/__/____]
Commission Number: [_______________]

[NOTARY SEAL]

SCHEDULE A — LEGAL DESCRIPTION OF TRUST PROPERTY

Common Address: [STREET ADDRESS, CITY, FL, ZIP]

Parcel ID / Folio Number: [__-__-__-______-______]

Legal Description:

[INSERT FULL LEGAL DESCRIPTION — LOT, BLOCK, PLAT, RECORDING REFERENCE, OR METES AND BOUNDS]

Recorded Instrument (Deed in Trust):

SCHEDULE B — BENEFICIAL INTEREST REGISTER

(Maintained by Trustee; not recorded.)

Holder(s) of Power of Direction:

SOURCES AND REFERENCES

• Fla. Stat. § 689.071 — Florida Land Trust Act
• Fla. Stat. § 689.072 — Real estate interests transferred to trustee
• Fla. Stat. § 689.073 — Powers conferred on trustee in recorded instrument
• Fla. Stat. § 689.09 — Statute of Uses (inapplicable per § 689.071(4))
• Fla. Stat. § 689.225 — Florida rule against perpetuities (360-year limit)
• Fla. Stat. § 736.08125, § 736.1013 — Trustee liability limitations
• Fla. Stat. § 736.0403 — Trust execution formalities
• Fla. Const. art. X, § 4 — Florida Homestead
• Engelke v. Estate of Engelke, 921 So. 2d 693 (Fla. 4th DCA 2006) — homestead via land trust
• 12 U.S.C. § 1701j-3(d) — Garn–St. Germain due-on-sale exemption
• The Florida Bar — Real Property, Probate and Trust Law Section materials on land trusts