Real estate, estate planning and trust law in FL state, process of purchasing real property in a revocable trust

Your question does not have sufficiently clear information for any type of resolution. For example, is the home already in the Seller's Trust, or is the Buyer going to place the home in a revocable trust, once the Buyer acquires the house (or both)? In Florida, however, it is most often not recommended that a home be placed into a revocable trust, as the trust offers no protection from creditors, does not reduce your federal estate tax and/or state death tax. Most often, therefore, there does not seem to be any reason to place your home into a revocable trust.

If you are planning on buying a home in a revocable trust, BEWARE. First, a Trust is not like a corporation, where you can buy the shares of stock, and then own the corporation. Interests in a Trust are either legal interests (e.g., like the title to the property, without any of the right to enjoy it) or equitable interests (e.g., the right to possess and enjoy the property, without the "title" to same). Typically, the trustee owns the legal interests, while the beneficiaries own the beneficial or equitable interests. When a Trustee sells trust property, he/she is typically selling the legal interest which the Trustee typically owns and at the same time is also selling the equitable or beneficial interests, which he is selling on behalf of the beneficiaries of the Trust. In selling these equitable interests, the Trustee can only exercise the powers granted to him/her by law or in the trust document itself. Therefore, if the trust document does not give the trustee the power to sell real property, and/or if the law does not provide the trustee with the power to sell real property, then the Trustee is powerless to do so, even if the Trustee has absolute control over, and is the sole Trustee, of the trust.

And this is just the tip of the proverbial iceberg. Buying or selling property in atrust can be extremely complex. Some typical issues which need to be resolved include the validity of the trust, whether the trust adequately provides the necessary powers to the Trustee to do everything necessary to complete the transaction, are there any laws which may affect the powers of the trustee, does the trustee qualify under the law to act as a trustee, are all of the requirements for transfer of title in Florida being met, etc., etc. And these issues are compounded by Trusts which have been created in other states or countries, etc.

Last, but certainly not least, obtaining advice like this over the internet and then thinking you know enough to forego proper and experienced representation is a potential financial and legal disaster waiting to happen. The reason for this is that there are about a hundred or more different questions which need to be asked and answered, before an attorney could advise you how such a transaction should be handled and how to best protect your interests under the circumstances. So, do not sign anything before selecting and obtaining the representation of an experienced real estate attorney with a background in estates and trusts. And depending upon the size of your estate, there is the likelihood that your accountant and/or your estate planning attorney should also participate in advising you regarding these matters.

Good Luck!!

P.S. The “process” will ultimately boil down to the execution of a Real Estate Purchase and Sale Contract and then closing the transaction according to that Contract. There are standard real estate contracts available in Florida, but not for what you are doing. And it is doubtful that the title examination and the documents needed for closing would be standard.

Thanks for question. In answering your question-I will make the following assumptions.
1-The grantor is also trustee.
2. The language in the trust perserves a life interest in the homestead for the benefit of grantor.
3. The deed prepared to trust also perserves a life interest for benefit of grantor.
If the proper language is in the deed and trust-then the grantor(s) can purchase homestead property into the trust and have full use and enjoyment of trust property without loss of the benefits of individual ownership plus gain the benefits of avoiding probate.

You may have trouble obtaining financing if the trustee of the revocable trust is purchasing the home. If the trustee is paying cash, then there are several variables to consider. We need to look at the language in the trust. If the person who set up the trust (called Donor or Grantor) and the trust document also names the Donor as the initial Trustee, then they would be considered the Trustee. A successor Trustee is the person who steps into that position after the initial Trustee is unable or unwilling to continue because of death, disability, incapacity, etc. I would not recommend placing our Florida home in a revocable trust at this time. The law is evolving where we will be able to but not yet. The best solution would be for the Donor to keep a life estate interest and the revocable trust to have the remainder interest which is accomplished by the language on the deed.