Whether real estate in Florida can be homestead if it is in a trust depends on whether the trust is revocable or irrevocable and it depends on the language in the trust. Generally, real estate in a revocable living trust can be homesteaded and real estate in an irrevocable trust cannot, unless the irrevocable trust has specific language that allows real estate owned by the irrevocable trust to be homestead.
A homestead in Florida can only be owned by a “natural person.” An entity, such as a corporation, LLC, partnership, or most irrevocable trusts cannot claim homestead protection because those entities fall outside the definition of a “natural person.”
Generally, real estate in an irrevocable trust cannot be homestead unless the irrevocable trust is drafted to allow the real estate to be homestead. To accomplish this, the irrevocable trust must be drafted with precise language and the trust beneficiary must reside in the property as the beneficiary’s permanent residence. The trust language must grant the trust beneficiary the exclusive and continuous present right to full use, occupancy, and possession of the homestead owned by the trust for the life of the beneficiary. In addition, the trust must be passive and waive any fiduciary duty of the trustee to sell the homestead or diversify trust assets.
Irrevocable trusts that do not have precise language outlined above cannot be homesteaded. Most irrevocable trusts do not have such language. If you want your irrevocable trust to allow for the homesteading of real estate, then you must ask the attorney drafting the trust to include the language.
The downside of homesteading real estate in an irrevocable trust is that you will lose the benefit of anonymity for the trust beneficiary. Anonymity will be lost because the beneficiary’s name will be on public tax records if the real estate is homesteaded.