How to Hold Title

     Land Trust

Most people believe holding Title in a Corporation, or LLC, will protect them from liabilities, and that may be true for a business you created, but for Real Estate it is not going to work. 

Anyone with internet access can in minutes go to the website of their state and enter the name of the Corporation or LLC and find the names of the principles of those entities. What type of protection is that

Once they know the names of the individuals, they can then go into county records and find all the information on those individuals, again what type of protection is that. 

Once someone sees all of your information they will easily see how much property you are associated with, and if they see the property is worth a sizable sum they may choose to sue you. 

People today will sue at the drop of a hat, for what ever reason, they fell on your property, they may feel you owe them for a contract, they may believe they can become extremely wealthy at your expense.

They contact a Lawyer and then you are in big trouble, even if you're innocent, the problems it causes, the time and mental anguish is more than you need.

    There are several methods of holding title to property,

Tenancy in Common - Sole Ownership - Community Property - Joint Tenancy - Community Property with Right of Survivorship – Living Trust - Land Trust

    What is the Best way to HOLD TITLE

The Land Trust, many real estate attorneys, title companies, and lenders are not familiar with the Land Trust, but now you are.

Land Trust (Benefits)
Privacy
Asset Protection
Ease of Transfer
Flexible
Ownership
Estate Planning

The Land Trust is a method of taking title to property, giving you the Property Owner many Benefits.

       Privacy - Asset Protection - Ease of Transfer - Flexibility of Ownership - Estate Planning

    Benefits of the Land Trust

The most important benefit of a Land Trust is keeping you from being a "target."

The most important ingredient to financial success is to protect your wealth. 

In today's litigious atmosphere, If your like many people you may actually feel more insecure than when you had fewer assets, simply because you know that now you could be sued at any moment, sometimes for completely frivolous reasons.

The Land Trust is a legal method for protecting your assets. 

If you're planning on owning more than your homestead, you need to consider asset protection. 

Even if you aren't yet concerned with this issue, now is the time to start and protect yourself with the use of a Land Trust.

                               What is a Land Trust

The Land Trust is an agreement between the officer of the Trust, the "Trustee ", and the person or persons called the " Beneficiary ".

The Trust identifies certain duties that each agrees to perform. 

The agreement is then signed by all parties, and it becomes the property of the Beneficiary(s), with the Trustee retaining a copy.

The Beneficiary(s) own the Trust, and the Trust owns the property.

The Trustee has only those powers granted by the Beneficiary(s), and performs those duties spelled out in the Trust agreement.

The Trustee has no personal liability or responsibility to do anything more than those duties that the Trust has spelled out.

A Land Trust and a Living Trust are Not the same.

In a Living Trust, the Trustee has legal title, and the Beneficiary(s) have equitable title. 

The Trustee in a Land Trust holds legal and equitable title, the Beneficiary(s) have a beneficial interest (The Beneficiary(s) interest is personality, Not realty)

    Secrecy

Secrecy is one of the most important aspects of a Trust.

No one knows who the Beneficiary(s) are, except the Beneficiary(s), and the Trustee.

When the title of the property is searched, all that is found out is the property is owned by a Trust, no one knows the Beneficiary(s) name.

The only possible way the Beneficiary(s) can be reveled is through a court order.

A deed is recorded at the courthouse, and it bears the name of the Trustee as grantee.

Nowhere does it mention the Beneficiary(s) name. 

The Trust document, itself remains in the possession of the Beneficiary(s) It is Not recorded anywhere, nor does it become public knowledge. 

The only way the Trust document has to be presented is with a court order.  

The Trust is a legal entity therefore it can assume a loan, create seller carry back financing, etc. the Trust takes title to the property, the Trustee signs the note as Trustee.

When the property is transferred, the "Beneficial Interest " is assigned, therefore nothing changes at the courthouse, the Beneficiary(s) and the Trustee signs a document called " Assignment of Beneficial Interest ".

    Privacy 

In most Land Trust agreements, the Trustee may not reveal the identity or ownership interests of the Beneficiaries(s) without the written consent of the Beneficiaries(s).

Only under a Court Order can the Trustee reveal this information.

Reasons for Privacy: To keep your identity out of the Public Records, which is extremely important.

    As a Developer

Trying to buy parcels of land, or properties, it is prudent to let as few people as possible know what properties you own in the area. 

An example--
Your buying single family houses in a couple block area, knock them down and redevelop the area.

Anyone can check out Public Records right from their computer, if they found out you were the ones buying the houses it would start to become impossible to complete your project.  

    As a Landlord

It is good idea to keep your ownership of properties from the tenant's. 

When you are working with your tenant's as owner of the property, you are at a disadvantage negotiating with them as they view the owner as someone who is wealthy enough already.

    Preventing Lawsuits,

Owning property in your name is inviting problems from many different directions. 

You wouldn't carry around your financial statement, then it makes sense not to have your most valuable assets open to anyone that knows how to access Public Records. 

Anyone can see what assets you have, if they have any desire to sue you, or to file a judgment against you for their own personal gain.

(Many lawsuits are filed for nuisance value) An attorney working on a contingency fee basis will first check to see what assets you have, if they find no assets they may decide to move on.

    Asset Protection

The Land Trust is extremely effective as a carefully planned Asset Protection program.

Owning Real Estate in your own name leaves you open to all kinds of problems. 

For example a judgment has been filed against you, and all of your property is in your name, all of that property will have a lien attached to it. 

You will not be able to sell or refinance any of that property, because No Lender will approve a loan without Title Insurance and No Title Insurance company will issue a policy without a guarantee of a clean Title. 

You may be forced to satisfy that judgment even if it is felonious, or be faced with the fact that you lose some or all of your property.

    Placing your property in a Land Trust has many Advantages.

Again Secrecy is one of the most important aspects of a Land Trust.

No one knows who the Beneficiary(s) are, except the Beneficiary(s), and the Trustee.

When the title of the property is searched, all that is found out is the property is owned by a Land Trust, no one knows the Beneficiary(s) name.

    Legal Entity

The Land Trust is a legal entity therefore it can assume a loan, create seller carry back financing, etc. the Land Trust takes title to the property, the Trustee signs the note as Trustee.

When the Trustee signs the document " as Trustee " the Trustee is not liable.

    Beneficial Interest

When the property is transferred, the "Beneficial Interest " is assigned, therefore nothing changes at the courthouse, the Beneficiary(s) and the Trustee signs a document called " Assignment of Beneficial Interest ".

In the Land Trust, the Beneficial Interest is not an interest in real estate, therefore a judgment against you personally, will not automatically attach to your properties allowing you to move your properties using the Land Trust procedures.

    Ease of Transfer

Holding properties in your own name, in a Corporation or an LLC, the documents, which transfer an interest in real estate, need to have two people witness the document, then must be sworn before a notary public, and then it is recorded in the Public Records,

 Ease of Transfer - Holding your properties in a Land Trust creates one of the greatest benefits, and that is to Easily Transfer your interest. Beneficial Interest -- A Beneficial Interest under the Land Trust is considered to be Personality, not Realty, therefore a Transfer of Interest need not be witnessed or notarized. 

    Transfer of Beneficial Interest -

In most real estate transactions the closing can be very time consuming and not the most fun day in your life.

Under the rules of the Land Trust, a transfer of Beneficial Interest is very simple, it's done as easily as transferring stock certificates in an corporation.

There are No closing costs such as, documentary stamps, recording fees, etc.  The only fee you should have is to the Title Company.

    Flexible Ownership  

  Multiple Ownership

Holding your properties in a Land Trust makes it very convenient to have multiple owners.

If a property is held in Corporation, LLC or as General Partnership, all partners may be required to sign the legal documents at specific times. 

It may be very difficult and very inconvenient if all the signatures had to witnessed and notarized.

The Land Trust only requires the signature of the Trustee.

    Estate Planning Avoiding Probate

Estate Planning is often overlooked for many reasons, when this should actually be at the top of your list. 

Most people avoid even thinking about Estate planning, they think that's for when they get rich, or are just too busy making money.

The Land Trust remains in place when you pass away.  Remember you do not own the property, it is held in title by the Land Trust and is controlled by the Beneficiaries.

Unless you are the Trustee, your name appears no where on the document.

Why create a large estate and then pay someone thousands of dollars to sort this all out, when you can easily place your assets in a Land Trust and YOU can plan your estate as you grow.

You place each of your properties in individual Land Trust (2356 Trust) naming each Trust with the address numbers makes it easy for book keeping.

You create a Living Trust (See chapter on Living Trust) and place all of your Trusts into the Living Trust.

This also provides you peace of mind as you don't know what each day brings, and each day, no matter what happens, you know that you have provided for the future of your family.

By placing your assets in Land Trusts, you have left your affairs in order where your absence will not produce panic or distress because you may or may not have left a will to be probated.

Probate is the process that the court officially proves and recognizes a Will.

Probate is a very expensive and time consuming process depending on the size of your estate. 

The time is takes for the court to decide who gets what, your property in the estate may be losing value, because it may not be managed very well.   

Land Trust (Benefits)
Privacy
Asset Protection
Ease of Transfer
Flexible
Ownership
Estate Planning

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