Florida Trust Question

[momjd]

I am a newly admitted Florida attorney. As a favor, I am creating a trust for my best friend's mother. Her goal is to avoid probate and leave her residence to her three adult children in equal shares after she dies. I have two questions. First, will transferring the deed to the trust extinguish her Florida homestead tax exemption? Second, will transferring the deed to the trust ruin the step up basis in the house the kids would get if it was left to them in a will (let's assume she bought the house for $100k, and at the time of her death it is worth $500K)? Any guidance would be appreciated.

 

[seniorjudge]

I am a newly admitted Florida attorney. As a favor, I am creating a trust for my best friend's mother. Her goal is to avoid probate and leave her residence to her three adult children in equal shares after she dies. I have two questions. First, will transferring the deed to the trust extinguish her Florida homestead tax exemption? Second, will transferring the deed to the trust ruin the step up basis in the house the kids would get if it was left to them in a will (let's assume she bought the house for $100k, and at the time of her death it is worth $500K)? Any guidance would be appreciated.

What does your research on these two questions suggest?

 

[momjd]

Thank you for your reply. I haven't found anything on the step-up basis question (I have a call in to a CPA), but I've found several articles stating that the Florida homestead protection does not extend to trusts, only to "natural persons." But, I've also found a few conflicting articles that state that a properly drawn trust can still get the homestead protection, without indicating what exactly would give this protection to a trust.