This is what my Trustee says:
“Regarding ownership in the land trust, oneâ€™s beneficiary interest (being intangible personal property versus real property) provides a high degree of protection (though not absolute insurance) against a judgment creditorâ€™s partitioning of one partyâ€™s interest from that of another: thereby forcing the sale of part of the property or liquidating it and dividing the proceeds. To best protect against such potentiality, it is prudent and highly advisable for land trust participants to hold their respective beneficiary interests in a Limited Liability entity such as, say, a Limited Partnership or a Limited Liability Company (LLC). In so doing, each beneficiary can then be free of concern about the accidental or untoward misdeeds of the other (i.e., dealings that could otherwise easily involve the propertyâ€™s title by either partyâ€™s creditorâ€™s claims, tax liens, bankruptcy, legal actions in marital disputes, probate, etc.).”
â€œSince the interest of the beneficiaries under a land trust is personal property, and since the trust agreement expressly precludes the vesting of any legal or equitable right in a beneficiary, partition is not available.â€
Henry W. Kenoe, Keno on Land Trust, IICLE, p 3-012 Sec. 3-9 (1989)
CA. Civ. Code Â§872.210
CA Probate Code Â§50
CA. Probate Code Â§133(i)(c)
CA. Civil Code Â§955.1
Wile, â€œJudicial Assistance in the Administration of California Trusts,â€ 1`4 Stan. L.Rev. 231, 245-250 (1962)
CA. Estate Administration, Â§Â§33.11 to 33.35 (Cont. Ed. of the Bar, 1959)
Aronson v. Olsen, 348 Ill. 26, 29, 180 N.E. 565, 566 (1932); Breen v. Breen, 411 Ill. 206, 210-12, (1952).
Probate Code Â§Â§11600 et. seq. & 2463;
These are his credentials: one of the founding Directors of the California Trust Deed Brokers Association. As past Vice President of this prestigious organization, he also sat on the Board of Directors as Legislative Co-Chairman, representing the organization at an advocacy level at the State Capital in Sacramento, California. His experience and integrity have been confirmed by the Court as an appointed Referee and Receiver by the Superior Court. He has handled thousands of trusts and not one penny has ever been lost.
PROTECTION FROM LIENS AND JUDGMENTS
A creditor may reach the corpus of a land trust, unless the trust is irrevocable, or there would be MORE THAN ONE unrelated beneficiary (as with the model of the NARS Equity Holding Trust Systemâ„¢). This concept appears to be based upon the idea that a co-beneficiary in a land trust can be seen as a â€œpartner,â€ and a claim (or charging order) effected against a co-beneficiary would be impossible without a dissolution of the entity (the trust) and since an unrelated co-beneficiary is not responsible for the actions of the other: such dissolution would not be allowed.
Henry H. Keno on Land Trusts, IICLE, Springfield, Illinois (1989)
Smith v. B of A; Houghton v. Pacific Southwest Trust and Savings Bank: 111 CA 509, 295 p. 1079,
The CA. Code of Civil Procedures Â§697.510]
Mike says: “However, if you are involved in your business, the plaintiff will sue both the LLC and you personally, thereby defeating the protection of the LLC.” Mike, If you use the land trust as part of the Equity Holding System that I use that includes a land trust, triple net lease, and equity sharing, that can’t happen. We ALWAYS have two unrelated beneficiaries and they can sue me or my company all they want. My real property is owned by the Trustee; my personal property is co-owned and cannot be partitioned. ARMOR PLATED.
In Ohio, land trusts are authorized by statute, Ohio Code (Revised) 5301-03 and 1335.01-.04. - The Trustee functions as the holder of legal and equitable title. Remember this is a revocable, inter-vivos living trust. Nuff said. It’s a warranty deed state and there is no requirement to have an attorney complete and file the paperwork.