According to Arizona law, the name and address of the beneficiary must be disclosed. Are there any advantages to holding property in a trust in Arizona since the whole world will know who the beneficiary is? I am thinking about putting my properties directly into an LLC at time of purchase. Your feedback is appreciated
Absolutely. I live in AZ. My personal home is in a land trust and my investment properties are always in a land trust. Public records show that my home is owned by my trustee’s non-profit corp.
Regarding ownership in the land trust, one’s beneficiary interest (being intangible personal property versus real property) provides a high degree of protection (though not absolute insurance) against a judgment creditor’s partitioning of one party’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 property’s title by either party’s creditor’s claims, tax liens, bankruptcy, legal actions in marital disputes, probate, etc.).
“Since 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.” Even if they knew you were a beneficiary they would be unable to break the trust.
The LLC protects your personal assets, the land trust protects the real property. Good luck.
One more thing. Be careful to select a professional non-profit Trustee corp. as your trustee and NEVER be both Trustee and Beneficiary of your own trust. If a trustee is also a beneficiary, a merger of title is created (see Doctrine of Merger), invalidating the trust if challenged in court as being a bona fide land trust.
Da Wiz
Da Wiz,
Thanks for your crystal clear reply.
Hobbyinvestor