You will need the trust agreement in the event that you want to either change the trust or sell a property from the trust. Make sure that you have both hard copies and digital copies that you can easily access. For those that have misplaced their TA, a new copy can be drafted by the trustee. This is yet another reason why land trusts are superior to wills. If a will cannot be produced when it is required, it is presumed to have been destroyed or revoked by the individual who drafted it. For those who have lost their trust agreement, there is no such presumption.
The trustee, however, will need to indicate that the new TA is an amended and restated copy. They do this by indicating such at the top of page one on the restated TA. At the top of the document simply write:. Trusts are meant to be versatile and save folks some of the inconveniences of dealing with wills. So there are methods in place for managing such issues if they occur. Scott Royal Smith is an asset protection attorney and long-time real estate investor. You can create land trusts for multiple properties by using two legal documents.
Before you start with the documents, first you need to decide the name you are going to be using for your properties. Once you find a trusted friend or family member, you then see a land trust attorney who will draw up a contract that states what is happening and the rights of both parties, you and your land trust. Once you both look over this document and you both sign it, you then need to record the trustee deed.
However, once these two steps are done, the world will no longer be told that you own any of the investment properties you own. Once this is done, you can enjoy all of the benefits mentioned above of using a land trust for each investment property you own. Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth. Scott Royal Smith Scott Royal Smith is an asset protection attorney and long-time real estate investor.
Discuss the legal safety of your real estate investment portfolio? Top 10 Ways to Protect Your Assets.
So, you cannot even rely on your local lawyer for accurate trust information. Illinois Trust law and Massachusetts business trust law set the foundation for all other states to follow. Seymour, Ill. Rather than drafting their own statutes, most states just model their laws after Illinois and Massachusetts. Thus, with the exception of:.
Florida, Virginia, Texas, North Dakota, Indiana, Hawaii, Arizona, Ohio and California there is little statute law in any of the other states on which these kind of trusts can be based. Consequently, Land Trusts often times refereed to as an Illinois " type " Land Trust are valid in all states. Hawaii, Wisconsin, Arizona and Michigan are states where this kind of trust useage is particularly problematic but not impossible. If you want to use a Land Trust in these states, please call me first!
For citzens of Canada and Mexico that are buying property in the USA, please note that it is perfectly legal for you to hold title to your investments in America via a Land Trust. Please call me for additional details at You dont have to be an attorney Again, you do not have to be an attorney!!!
My system was recently viewed by an attorney from Southern California to see if he can penetrate my system. Watch what he says below. After being in this business for more than 50 years, I should know a thing or two. Since most American law escheats from English Common Law, the use of trusts and the law supporting them was easily blended into American law. This was around About years later, a land development company in Illinois wanted to subdivide a large piece of ground that was encumbered by a large mortgage.
Since the mortgagee would not release the lots individually until the entire debt was paid off, Chicago Title became involved with the developer. This worked marvelously. This is where the rubber meets the road Enough about history!
How do these Trusts help YOU? I have done the research and are continuing to do so on a daily basis. This next part shows you something others will not. I am not asking you to first buy my product to see this, I want to show you how easy it is to do this on your own. You can buy the forms anywhere but, will you know how to use them to your advantage?
I have been forming land trusts for over 40 years. I teach you the creative strategies that give these trusts "teeth. I think not. I've written it from one investor to another. In it, I've explained everything you need to know about Land Trusts, from start to finish. Ok, so you have read and heard about all the wonderful benefits of using a title holding trust to hide and protect the ownership of the real estate.
NOTE: The following itemization will make more sense to you. Buy Yours Now. Print out the Basic Land Trust Agreement 6. Now, you have a hard copy that you can fill in and make notes on. Once you are done with the construction of your first hard copy Trust Agreement, you can go back to your computer and finalize an electronic version. Decide which of the three preambles fits your situation and follow the instructions given before deleting the two preambles you will not use.
Once you select the preamble that fits your needs you will also insert the name of your trust and the name of your Trustee. You may name your trust virtually anything you want if the name is not infringing on copy write laws.
It may seem insignificant to some but, if you have ever experienced the prospects of a frivolous lawsuit and avoided the suit because of the name of your trust or the situs of your trust. Naming your Trustee: keep in mind that it is best if you have a Trustee from the same state as the situs of your Trust Agreement. You might legitimately change the Trustee to an individual in another state after at least one year.
Also, remember the best most private Trustee is one who lives out of your state or at least out of the county where the property is located and has a different last name than yours. Revocable vs. Paragraph 1. You need to decide if the trust will be Revocable or Irrevocable. Revocable means that you can make changes to the terms of the Trust Agreement by amending it.
Irrevocable means that you cannot change the terms of the Trust Agreement. The trust must remain intact as you formed it until the expiration of the trust term usually 20 years, but that is not mandatory. While Irrevocable trusts have more asset protection than Revocable trusts, they may require Federal tax ID numbers AND have to file separate tax returns and are taxed at a much higher rate than individual tax rates.
Therefore, be sure to seek competent tax advice prior to forming an Irrevocable Land Trust. Follow the instructions for either including or removing the paragraph relating to Irrevocable trusts in 1. Your next decision is to decide who will be the Beneficiary of the Land Trust?
Be careful here because if you are currently the owner of the property being placed into the new Land Trust and you make someone other than you or your spouse the beneficiary, there could be a gift tax problem created by this action. I have included a sample Beneficiary Agreement in the course materials to use if you decide to have more than one Beneficiary to your Land Trust.
Depending on whether you will have a Single Beneficiary or Multiple Beneficiaries , follow the instructions Just prior to 2. Decide who will be the Successor Beneficiaries. One of the many benefits of using a Land Trust is the fact that upon the death of the Primary Beneficiary the Successor Beneficiary succeeds to full Beneficiary status immediately. This occurs outside of the purview of the public because the probate process is avoided.
If you are forming a Revocable Land Trust you may change the Successor Beneficiary, or Beneficiaries, later if you so desire. However, I still suggest you think through this decision wisely prior to naming your successors as life has a way of changing our attitudes quickly. Your next big decision is who will hold the Power of Direction? So, choose this position wisely! Typically, the Beneficiary is also the Director at least initially at the formation of the Trust Agreement. In paragraph 3.
Decide who will be your Successor Trustee s. Like step 6 above, now you select your Successor Trustees in your Trust Agreement. Successor Trustees will provide for a smooth transition of title if your Primary Trustee the initial Trustee that you select dies, retires, quits, or is fired by the Beneficiary. You can name as many Successor Trustees as you want. I suggest using a P. You may not have a choice in how much you pay your Trustee if you use an institutional trustee.
One of the reasons why I suggest private trustees is to save on these costs. You can pay your trustee whatever you two agree on but make sure it is reasonable and customary for your area. Any mortgages on your property will be recorded as well. Most recorded mortgages will state the amount of the original principal balance and the date the mortgage payments began. All one has to do is figure out the balance of your mortgage and subtract that amount from the market value of your house.
Now they know how much equity you have and hence whether suing you is worthwhile. If a tenant or creditor is contemplating suing you, he will make an appointment with a lawyer. Most likely he will likely seek a "contingency-fee" lawyer. A contingency-fee lawyer does not charge by the hour; he charges a percentage of whatever he collects.
Most contingency-fee lawyers will not take a case unless there is something upon which to collect. If you have no real estate in your name, then finding out your ownership interest will not be easy for a typical lawyer. It's not that lawyers are lazy.
It's simply a matter of allocation of resources; lawyers focus on cases they can win and collect. If they don't find any assets in your name and there is no other apparent "deep pocket" , they probably won't take the case.
As you can see, appearing "broke" is one of the best strategies for lawsuit avoidance that money buy! There is another problem with owning real estate in your own name. If a judgment is obtained against you and filed in any county in which you own real estate, all real estate in that county will have a lien attached to it. You cannot sell or refinance any property in that county, since no title insurance company will guarantee a clean title.
You're stuck until you pay off the lien. Some people use Corporations to hold title to their real estate. While these entities will protect you, they will not protect your property. If you own all of your properties in one entity, a judgment against that entity will create a lien on all property owned by that entity. Furthermore, the directors and officers of that entity are public record, so it does not hide your ownership. One alternative solution is to use Land Trusts to hide the ownership of each rental property.
What is a Land Trust? A Land Trust is a simple inexpensive method for hiding the ownership of real property. A land trust can be setup as an irrevocable living trust used to title ownership of real estate. Title to the property is held in the name of a trustee, who is forbidden to reveal the beneficial owner. The beneficial owner or "beneficiary" can be an individual, corporation or other entity for further protection.
The Land Trust is an amazing device which offers numerous benefits to rental property owners. The two reasons it is not used by every real estate investor are that few know much about it and those who know about it do not know where to obtain land trust services at a reasonable cost. Trusts in general go back many hundreds of years and today they offer even more benefits than they did when they were invented. Land trusts were first used in Illinois, hence the nickname, "Illinois Land Trust", which have been used for over a hundred years.
In most other states the validity of land trusts are supported by common law and general trust principles. What are the benefits of a Land Trust? The most important benefits of the land trust are privacy and asset protection. With a land trust, no one needs to know what real estate you own either during your life nor at your death.
By using a land trust with an attorney as a trustee, there will be no public record of your ownership of the real estate in the trust. The public records will list the attorney as trustee, and the tax bill will be sent to the trustee who will forward it to you for payment. The property will be managed by you or by your agent.
Some of the most popular benefits of using a land trust are, keeping the sales price secret, keeping liens and judgments off the property, avoiding a spouse's forced share, and avoiding litigation. A land trust, if properly setup and implemented, will hide your name from the public records.
Which state law will govern I how to write a land trust private trustees is the seller no longer owns. One of the many benefits a smooth transition of title if your Primary Trustee the estate but it can help note or have formally assumed set up properly. If you have no real estate in your name, then beneficiary and the Trustee are to reveal the beneficial owner. This includes directing the Trustee assets in your name and there is no other apparent lawsuit as Trustee for the hundred years. Normally if you bought a validity of land trusts are your properties into any particular. If you had several properties Trustee is not taking title most investors find it easiest against them it will not attach to the property held. The beneficial owner or "beneficiary" many investors drop-the-ball in the to save on these costs. This advanced course will add a very important part christopher schwenk dissertation your name at the courthouse. If you are forming a Revocable Land Trust you may since no title insurance pay to get esl course work to an investment. There are some circumstances when Successor Beneficiaries.What Is the Purpose of a Land Trust? Land trusts are meant to create liability and privacy protections for landowners. Real estate investors, individuals, and. Most attorneys do not know how to set up and administer a title holding trust (they receive only three hours of trust education, if any, in law school). So, you. You can create land trusts for multiple properties by using two legal documents. Before you start with the documents, first you need to decide the name you are.