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Real Estate and Estate Planning With Cobb Cole: Here’s What You Can Expect

At first glance, you might not think Real Estate Law and Estate Planning have a connection. Most people think of Real Estate Law as being related to issues like purchase and sales agreements, property disputes, and construction contracts. And Estate Planning is commonly believed to focus on wills and trusts, guardianships, and tax planning.

However, anyone who invests in real estate should be aware of potential Estate Planning issues that could apply to ownership and other activities.

Cobb Cole attorneys specializing in Real Estate Law and Estate Planning often collaborate to assist clients in developing strategies that address current property matters and anticipate long-term estate implications.

What is Real Estate Law?

Real Estate Law is a broad, multi-faceted practice that includes dozens of issues related to land, property, and real estate buying, selling, owning, leasing, developing, and managing. It has a critical role in ensuring property rights are protected and land use is regulated.

  • Property transactions, including buying, selling, and transferring ownership, typically involve drafting and negotiating contracts, conducting due diligence, and ensuring clear title.
  • Lease and rental issues can be related to contract terms and breaches, landlord/tenant responsibilities, and dispute resolution.
  • Zoning and land use matters generally deal with obtaining permits, researching variances, and ensuring compliance with zoning laws.
  • Real estate development often deals with regulatory approvals, land acquisition, financing, and contracts for property development projects, including commercial complexes, residential communities, and mixed-use structures.
  • In eminent domain matters, a Real Estate attorney ensures property owners receive fair compensation.
  • Title and title insurance services include title searches and defect resolution as well as reviewing title insurance policies to ensure they protect against future claims.
  • Real estate financing services typically involve reviewing and advising on mortgages, loans, and other financial paperwork, including promissory notes.
  • Environmental and regulatory compliance representation deals with land use and development issues such as brownfield redevelopment.
  • Real estate investment and taxation matters often require structuring partnerships and joint ventures as well as property, capital gains, and estate taxes.

What an Estate Planning Lawyer Does

An Estate Planning attorney helps you strategically arrange your personal, business, and financial affairs to ensure your assets are distributed as you desire after death. Various legal tools and documents, including wills, trusts, powers of attorney, and healthcare directives, help manage matters like end-of-life medical decisions, guardianship for minor children, philanthropic wishes, and tax efficiency.

Wills and trusts set out how you want your assets distributed among various beneficiaries and let you maintain a higher level of control over who receives what. They also offer privacy and potentially reduce estate taxes. Estate tax planning helps you minimize beneficiary tax burden through strategies like gifting, exemptions, and charitable giving.

Done right, Estate Planning preserves wealth for future generations.

When Real Estate Law and Estate Planning Intersect

Though there are many scenarios where you might require the assistance of a Real Estate lawyer and Estate Planning attorney, an obvious one occurs when property is a significant part of your estate. Real estate assets are often the most valuable assets someone owns, so proper management and distribution should be carefully considered.

  1. Trusts. Revocable living trusts allow you to transfer ownership of real property to a trust while maintaining control in your lifetime. They allow for uninterrupted management if you become incapacitated and can help your heirs avoid probate, simplifying property transfer.
  2. Investment properties. Whether you own one vacation home or multiple income-producing properties, Estate Planning designates how they should be shared or sold upon death. This helps prevent disputes and ensures the properties remain a source of enjoyment or income for the next generation.

Property holdings can also impact your estate’s total value and tax liability. An Estate Planning attorney can advise you on structuring ownership and transfers in a way that minimizes your tax exposure, including gifting property during your lifetime or establishing a trust.

Because Real Estate Law and Estate Planning intersect on critical issues, the legal expertise of both a Real Estate lawyer and an Estate Planning attorney is essential to successfully navigate property transaction complexities.

Estate Planning in Florida for Property Owners

Essential Estate Planning considerations to keep in mind when you own a substantial amount of real estate in Florida include:

  1. Developing a comprehensive estate plan that reflects the complexity of your holdings. This can consist of a will, trusts, and other essential documents that state how you want your real estate and other assets distributed.
  2. Creating a revocable living trust to hold your real estate assets, allowing easier management during your lifetime and smooth ownership transfer after your passing.
  3. Ensuring proper titling, whether it’s joint tenancy, tenancy in common, or another ownership structure.
  4. Factoring in Florida’s homestead exemption, especially if you own multiple properties in the state.
  5. Estate and gift tax implications require strategies for minimizing estate taxes.
  6. Planning how rental properties will be managed and distributed after death. This sometimes includes appointing one or more trustees to oversee property management and rental income distribution.
  7. Charitable giving options as part of your estate plan, including charitable trusts or foundations that allow you to provide financial support to causes you care about while offering potential tax benefits.
  8. Contentious family dynamics can lead to conflicts amongst beneficiaries when dividing real estate assets. These concerns should be addressed through clear communication and detailed estate planning documents.
  9. Retaining professional advisors, particularly if you have complex real estate holdings. Qualified Estate Planning attorneys, Real Estate lawyers, financial advisors, and tax professionals can ensure Florida’s laws and regulations are adhered to while preserving the value of your estate.

Estate Planning for a substantial real estate portfolio can be intricate, with state and federal laws governing property and taxation varying. Working with legal professionals who specialize in Estate Planning and Real Estate Law helps ensure your property assets are fully protected, managed, and transferred according to your wishes.

Tax Implications of Real Estate Transactions and Estate Planning

The good news is that Florida does not have an inheritance or estate tax, making the state attractive for wealthy individuals looking to reduce their tax liability. However, if you die still owning property located in other states, you might still owe an estate tax in that location.

That said, every deceased citizen or resident of the United States must pay the federal inheritance tax or estate tax. What your estate would owe depends on the value of your assets, which is multiplied by a progressive tax rate that starts at 40 percent and applies whether the assets are individually owned or part of a trust.

  • The federal estate tax exemption is currently $13 million, which increases with inflation.
  • The exemption can be applied against lifetime gifts and post-death bequests by a trust or will.
  • For married couples, a surviving spouse can take advantage of a carried-over credit equal to the amount not used after the other spouse’s death. This “Deceased Spousal Unused Exclusion” means most Florida residents are overly concerned about estate tax liability.

If your estate includes multiple commercial or residential holdings that generate income, it’s important to know that capital gains tax can have a significant impact if the properties are sold, even if they’re held in a trust. One caveat is that when a rental property is inherited, it’s revalued on a “step-up-basis” for tax purposes. So if the heirs decide to sell one or more income-producing properties shortly after the owner’s death, there could be little, if any, capital gains due.

Consulting with an attorney who understands Florida’s real estate and estate planning laws can help you devise strategies for optimizing tax efficiency.

Joint Ownership and Survivorship Rights in Real Estate and Estate Planning

If you own one or more properties in joint tenancy, tenancy in common, or with survivorship rights, it could have implications on property ownership and inheritance.

When a property is owned by two or more titleholders, it’s not uncommon for legal disputes to arise that require the involvement of a qualified Florida Real Estate and Estate Planning lawyer.

  1. Joint property ownership in Florida can be held by tenants in common, a joint tenancy, and joint tenancy with rights of survivorship, and a tenancy by the entirety.
  2. Tenants in common ownership gives each person listed on the deed the right to equal ownership and use of a property unless expressly stated otherwise, meaning it’s possible for ownership stakes to be unequal.
  3. Joint tenancy allows one or the other party to sell their share of a property. Unlike tenants in common, joint tenants always own equal shares.
  4. Joint tenancy with the right of survivorship means the real estate’s full title goes to a surviving owner, who automatically owns 100% of the property upon the other owner’s death.
  5. Tenancy by the entirety is a form of joint ownership that only married couples in Florida may take advantage of. During their ownership, the spouses are viewed as a single entity, rather than individual owners, with each considered the owner of the entire property. Under Florida law, when one spouse dies, the property automatically passes as it would in a joint tenancy with the right of survivorship.

Questions About Real Estate Law and Estate Planning?

From structuring real estate holdings to advising on the implications of gifting or transferring property and minimizing estate tax liabilities, attorneys specializing in Real Estate Law and Estate Planning can help you best manage complex assets, including commercial properties, rental properties, and properties held in partnerships or corporations.

It’s often the case that Real Estate lawyers and Estate Planning attorneys work together to help people address multiple challenges that often arise during the distribution of real estate assets. This can include:

  • Coordinating the transfer of multiple properties to various beneficiaries.
  • Ensuring family vacation homes are passed down without conflicts arising.
  • Navigating various legal intricacies involved with passing on investment properties.

As you can see, the seemingly dissimilar realms of Real Estate Law and Estate Planning can converge in ways that significantly impact your and your heirs’ financial future and well-being.

The Real Estate and Estate Planning attorneys at Cobb Cole understand that real estate investments often make up a substantial portion of an individual’s personal or business wealth, particularly in Florida. We guide our clients in how to effectively integrate these assets into their broader estate plans and help them align real estate strategies with estate planning goals. In that way, they can safeguard their investments now, provide for loved ones in the future, and leave a legacy that reflects their wishes and intentions.

When you choose Cobb Cole for your Real Estate Law and Estate Planning needs, you benefit from working with a team committed to protecting your assets and securing your legacy with unmatched expertise and dedication.

Contact us online or call 386-255-8171 to learn more.

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