those of you who currently hold many properties, can you please describe how your entities are set up in order to protect your assets?
i’m not asking why u do it the way you do it. it’s also not a contest of who’s structure is better… i’m just asking out of curiousity to see the many different ways people do assett protection around the US.
and please, mention what state you are in.
thanks
I take title in a land trust, which has the effect of converting ownership of real property to ownership of personalty, even though such ownership is characterized for income tax purpose as ownership in real estate. The primary purpose of the trust is to provide its beneficiaries a practical, economical (and anonymous) alternative form of real estate ownership and use.
It is a method of real estate ownership whereby a trustee holds legal title to real estate, while the trust’s beneficiary(s) have complete control over its management and the power to dispose of the property.
With a land trust, ownership becomes a private matter. County records will reflect my non-profit corporate Trustee as the titleholder in a trust capacity. Privacy and anonymity is one of the most important aspects of a Land Trust. No one can tell from the public record who the Beneficiary(s) are. 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.
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. The Beneficiary(s) name does not appear anywhere on the document, therefore the Beneficiary(s) are not personally liable. When the Trustee signs the document " as Trustee " the Trustee is not liable.
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.
Judgments and tax liens against a beneficiary do not attach to property in trust. Death, incapacity, and divorce of one of the owners will not necessarily affect the ability to sell, mortgage, or otherwise deal with the real estate. Also, one owner cannot compel the property to be partitioned.
The land trust itself does not provide asset protection, just privacy. However, a co-beneficiary land trust, properly structured, provides solid asset protection.
I have to agree with the use of a land trust for holding property. It becomes even more powerful when used with partnerships, LLCs, corporations, and trusts.
residence is in a land trust. investment properties are in an LLC. My business is an LLC taxed as a C-corp, which can provide better employee benefits.