I’ve recently been reading up on land trusts and the more I read the more I’m getting confused. I think it’s the “too much too fast” syndrome, not to mention the different legal names thrown out. Is this the gist of it?
Investor Ian buys a property and decides to assign it to a trust. Now the name of the trust is “Investor Land Trust”. Investor Ian is both the grantor and beneficiary to the trust and his name is no longer tied to the property.
Now my questions:
Who is the trustee? What exactly is the role of the trustee. Perhaps I’m just confused what a trustee is.
The beneficiary is the investor correct? Is the beneficiary and grantor ideally the same thing?
I deleive you are correct, the ben. and the grantor are the same just two diferant was of stating it.
I think where the confustion is: a land trust has a grantor and a grantee
A living trust has a trustee and a beneficiary the trustee is the person in control of the trust and the beneficiary is the person who owns or recieves the property in the event of the death of the trustee. I THINK! dose any one agree?
ForeverINvestor,
I posted my replies under your questions.
Now my questions:
Who is the trustee? What exactly is the role of the trustee. Perhaps I’m just confused what a trustee is.
Well, the trustee is legally whoever you wisht to can trust to fill that role but you would want to preferably use a out of state corporation whom is a non-profit and can perform the fidicuiary responsibilities of being at trustee especially for properties in trusts that are geared for longer holds in the trust.
The beneficiary is the investor correct? Is the beneficiary and grantor Now my questions:
Who is the trustee? What exactly is the role of the trustee. Perhaps I’m just confused what a trustee is.
The beneficiary is the investor correct? Is the beneficiary and grantor ideally the same thing?
Yes, they are the grantor or settlor are the party that vests the title of their property to their designated trustee automatically become beneficiay/ies in the trust they are commonly referred to as the settlor beneficiary. By IRS tax law the grantor must maintain a min of 10% beneficial interest in the trust or a transfer conveyance takes place under IRS rules.
Another nice thing in using trusts is you are not illegally taking title thus violating the Garn ST Germain act of 1982, or the lenders due on sale clause.
You are correct when investor IAN vests his title to the trustee his name comes off the public record thus shielding ownership and remember the identity of the beneificiaries remain secret and that is the trustee responsibility to provide that privacy to you as the beneficiary in the trust.
In benceficiary directed revocable inter vivos Illinois type trusts the benefciaries via a letter of direction direct the trustee in all affairs of the trust property as long as all beneficiaries agree whether it is to change a legal document, sell the property and so on.
The beneficiary can be whomever you wish to assign that beneficial interest being the grantor you have the power to do just that.
For asset protection of your real property I would highly suggest you assign beneficial interest to another party preferably a corporate entitly or an individual since this provides good asset protection should a creditor or attorney charging order by levied againest the trust. The asset protection feature is due to the non-partitionality of personal property which is what your beneficial interest is characterized as in 48/50 states in the nation. ( LA and TN are exempt).
It also allows investors to invest in your property legally, ethically and of course safely so all parties are protected from judgements, liens evern IRS tax liens, marital disputes, bankruptices and the list goes on.
Let me know and I will forward to you the 30 benefits of using these type
trusts in your R/E investing. My contact number is in my posting if you have further questions regarding land trusts in your R/E investing.
Thanks.