Looking for experienced opinions on using land trusts to protect assets. I am interested in pros and cons from anyone who has used them, has researched them, why and why not? What is your opinion on the best way to set up a trust? Thank you.
I was wondering the same thing about land trusts. With all this talk about the “Due on Sale” clause problem with transfering property to a LLC, land trusts seem to be a viable option. I am just not sure how much actual protection they provide. The two lawyers I am friends with are not familiar with land trusts.
I guess most attorneys are not familiar with them. I need to discuss costs and if giving a percentage to the company who sets you up in a land trust, them being named a beneficiary, is kosher. Any comments from the peanut gallery?
First, I am not an attorney, so consider yourself warned that I am not qualified to give legal advice.
But I have used trusts, including land trusts, for many years. I like the low profile they provide me.
Before you do anything else, John Schaub has an Internet Reprint of one of his newsletters on the subject. Read it at:
Second, check out someone who is an attorney. They sell a course on this site by Bill Bronchick that is a pretty good course on land trusts and their considerations. It is located at the following link:
It’s worth the money. You will spend far more trying to get this much information out of an attorney near you. After you go through this course, you will also know more about land trusts than 90% of the attorneys out there.
For a little more money, you can get Louis Brown’s course on trusts. Very good information!
Google it, or check it out at:
If your budget is tight, Jack Miller has a great little book on Land Trusts for sale at his website at:
Jack also does a seminar from time to time on trusts. See his schedule for details on the next one.
By now you are possibly thinking that I must get a cut on these programs. I wish, but no.
Also you now realize that this can be a very complex subject - more complex than a simple forum can handle for all you need to know. True. But they are not impossible to master. And once you know the fundamentals, they become routine.
In a nutshell, a trust is just a contractual arrangement between a trustee, a grantor and a beneficiary. There are several advantages to using them. I cannot think of any negatives to using them except the fact that they add a little bit more complexity to a transaction. I’m sure other people will not agree about this, however.
For a little more detail on why you might want to use one, see Mr. Bronchick’s article at:
I hope this helps!
Looking for experienced opinions on using land trusts to protect assets.
As a general rule, trusts do NOT provide any asset protection. A trust does provide some measure of anonymity, but does nothing to shield your assets from attack in the event of a lawsuit.
A friend of mine directed me to this site. There is definitely some very interesting comments and questions, of which many I can’t respond to, simply because I am not qualified to do so. My momma always told me, “It’s better to sit there and look stupid, instead of opening your mouth and removing all doubt.”
That being said, I would like to make a few comments on this subject of land trusts. These will be specific comments and not “Generalizations”.
First let me say, I am not an attorney, or a CPA or an accountant. All of my comments herein reflect my personal experience only.
On a previous post several websites were referenced. I’ve have not visited all of them, however I would agree that most of them have extremely helpful information.
Let’s get to the point.
Land Trusts can, IF done properly, provide the most inexpensive form of virtually “Bulletproof”, Asset Protection.
Land trusts, done properly, are indeed, one of the best kept secrets in this country. Sure most of us have heard of them, some of us actually know a little about them. Trusts of all sorts have been around 100’s of years. The most familiar of which is the so called “Living Trust” which is a great way to avoid probate, but offers virtually no protection, and is also not very difficult to set up yourself, inexpensively. Look here> http://www.suzeorman.com/
With land trusts you can do a whole lot more “IF” they are set up properly.
The following are some of the features of an “Illinois” Type Land Trust. (Which, incidently, is legal in all states. However, in Tennessee and Louisiana some of it’s benefits are not available)
Here we go:
• Avoid Probate
• Nearly complete Anonymity (A trustee can be served a court order to appear with good reason which is up to the charging party to provide)
• Legal in All States
• Full power of direction remains that of the trusts beneficiary (property owner)
• Avoidance of legal actions such as, but not limited to:
- IRS Liens*
- State Liens*
- Charging Orders*
- Except in Tennessee and Louisiana
• Ease of Transferring ownership interest.
• Ease of Multiple Ownership control over property… i.e. AITD’s, Wrap Around, Lease Options, Subject to, and virtually all other types of creative financing.
• A buyer, under certain conditions, may be able to qualify for the interest tax write off
• Investors may control a property without being on title, leaving them open to being able to acquire other properties because there credit is not impacted.
…And a whole bunch of other stuff.
I have been using land trusts nearly three years and have studied all applicable laws. I reiterate, land trusts done the “Proper” way, are the best kept secret in our country. Be careful of expecting a land trust to give you all of these benefits if they’re not completed the using all of the necessary agreement, documentation, etc.
Should anyone care to respond, I welcome all comments and questions regarding this matter.
- Except in Tennessee and Louisiana
In one of the earlier posts in this thread, Brickhaus said
Looking for experienced opinions on using land trusts to protect assets.
The usual context for this sort of question regards protection of personal assets – not trust assets. Nothing in your post addresses this question. Perhaps you could fill this gap and explain how an Illinois-type land trust provides asset protection for your personal assets once your beneficial interest in the trust is discovered.
I agree that anonymity, probate avoidance, and ease of transfer are all excellent benefits to be derived from a trust, but I don’t see protection of your non-trust assets as a benefit of a trust.
I apologize for using the term “Asset Protection”, in such a general sense. Seeing your question “…using land trusts to protect assets.”, I didn’t realize that you also meant “Personal Property”. Land trusts provide this protection for real property only. Although, technically speaking, interest in a land trust is personalty, personal property.
I cannot address how to protect personal assets outside of land trusts.
Actually, I never used the term “Personal Property”. I used the term “Personal Assets” and even clarified my use of the term to mean “non-trust assets”.
It is like a play on words since this guy who posted evidently has knowledge of land trusts.
What he is speaking of is real estate asset protection not personal asset protection and if you need help in the latter I’d suggest you do get with a good R/E attorney to setup a living or family trust and go from there.
Your post you stipulated that trusts do NOT provide any asset protection. Well Land trust or title holding trust do provid real estate asset protection in numerous ways but a Land trust do not protect your or the personal asset such as jewelry, stocks, bonds and other securities.
Let me also say from MR. no bananas post is that a title holding land trust provides to the beneficiraies; the beneficial interest in personal property not real property due to the merger of equitable conversion which only 2 states do not recongnize and they are Tennessee and Louisana which I see this guys did state so he is correct.
Let not talk apples and oranges let all be on the same page since Iam sure people who do not understand this dave are getting more and more confused on this topic…
Dave I hope there is no misunderstandings taken since you do provide some very good posts from my reading on this forum.
If a person maintains control of the assets in a land trust, that beneficial interest in it is subject to creditor claims. If this beneficiary is sued and a judgment is entered against them, a creditor can force them to list all assets they own and (any creditors attorney worth there salt will do this) any beneficial interests a person holds in trust. The creditor can then force a person to sign over his or her beneficial interest to him.
In a asset deposition an attorney can ask “are you a trustee or beneficiary in a trust”, now a person can lie and comit perjury or tell the truth, so the anonymity in a tust is a myth. Usually there is also a paper trail that never seems to be completely disappear when taking title to a property.
Land Trusts are not the proper form of asset protection as DaveT was saying.
John $Cash$ Locke
I agree with Mr. Cashlocks statement regarding land trusts being subject to creditor claims. This is a caveat of a simple land trust.
At this point, I must reiterate, a land trust which is properly set up is virtually impervious to any and most all creditor claims.* How a land trust is structured makes all the difference.
- In very rare instances the state may attach retroactively up to two years after the establishment of a “protected” land trust. A simple trust is not protected.
Gentlemen (and Ladies, too),
I like to use a land trust to hold the title of any property that I intend to keep, but I use it as just a first line of defense. By itself, it cannot work any asset protection miracles like some of the gurus claim, but it can’t hurt much either. Just be aware of their limitations.
However, I might rethink this strategy since everyone seems to be jumping on board with them, thanks to all the guru courses and claims. They have been misused a little too much it seems, and now they are starting to get a little of the wrong kind of attention, if you know what I mean.
In any case, they are just one part of an overall asset protection strategy. Your first goal should be not to get sued in the first place. Have good insurance and take care of problems before they get big enough to result in a lawsuit.
Also, don’t hold the beneficial interest in the land trust yourself! An LLC or a corporation works better for this, as does another trust in another jurisdiction.
Also, you should keep liens and other encumberances on your properties (possibly controlled by a friendly lienholder) that will be ahead of any judgment claims in case your first lines of defense are penetrated.
You can even booger up title to the property as long as you know how to unravel it when the need arises, although most people won’t have any need to do this.
These things can be layered as much as you want. It just depends upon your level of paranoia.
No one tool does it all, but that doesn’t make the tool valueless.