I am hearing a lot of buzz about these NARS/PAC trusts and other creative trusts. I understand that they have come to be because of the new legislation in states such as Texas and North Carolina. My question is, “Why are these trusts more beneficial than a standard land trust in states where this legislation is not an issue?” I live in Minnesota where nothing has changed legislatively speaking and I am noticing some investors use these new trusts anyway. I just don’t understand why. Could someone please explain. Thanks.
Land Trusts date back to feudal England but were perfected by the devious minds of Chicago Land Title for the benefit of the likes of Al Capone. By no means is it a new concept. There are inherent benefits involved in a properly crafted land trust that have been addressed on this board. One thing to remember, a land trust is not the method, it’s simply an underlying vehicle to accomplish the same objectives of any type of CREI, safely, legally and ethically.
Regards,
Dave
To answer your question, Bill Gatten developed the NARS land trust system in 1984 and it has been used successfully by many investors since that time, myself included. I use it because I feel it is the best way to manage your property once you have acquired it, no matter how you did so.
The NARS land trust has not come to be because of the laws you mentioned, but has come to the forefront as a legal asset management strategy that those laws cannot touch due to its protection under Federal Law, specifically section (d) (8) of the Garn-St. Germain Act of 1982.
The NARS land trust is unique because both legal and equitable title to the property is vested in your Trustee. NARS recommends the use of a non-profit corporation as Trustee for asset protection. In addition, the Seller remains as a Trust Beneficiary until the trust is terminated and does not transfer actual title to the property until his mortgage has been paid off and he has received all of his agreed upon equity.
In fact, some investors share future profits with the seller as well as the buyer/beneficiary. It all depends upon personal preference.
Sonriffic, go at the top of the page…where it says “search”…type in “NARS”, and you will have tons of discussion threads on them. That is a pretty heated debate right now, but you will see a lot of stuff on them, both pro and con.
I think the NARS discussion is right up there with “should I get my license”, “who pays the commission”, and “what came first, the chicken or the egg”.