PUTTING PERSONAL RESIDENCE IN LAND TRUST

i and my sister will be on the title
my sister will borrow the loan from the bank

Your sister will be on the loan and I assume the title will be in her name. All she has to do is place the property in a land trust and name you a beneficiary.

Da Wiz

call me slow, but I need further explanation after reading this entire post.

Mind you this is in the Commonwealth of VA

  1. I buy a property
  2. Total of 3 people have intrest in this property
  3. A LLC is set-up 50% owner to one person, 25% to each of the others
  4. The LLC is not recored until after the property is acquired…This is where the
    Living trust gets confussing for me.
  5. Should the LLC not be recorded, but rather the LLC should be the benificary of
    the living trust???
  6. The LLC will now be the benificiary, and the trustie (could be an attorney, someone that
    will do what the benificiary advices, tenet…is this correct???)
  7. The Living trust will now be recored at the local court house

If Im missing the boat please help me get on board.

First, the trust is established and you name your trustee and record a grant deed to your Trustee who takes title. I ALWAYS recommend you use a non-profit corporation that is established and familiar with the duties of a trustee.

Make the LLC a beneficiary of the trust. There is no need to record anything as this is a simple assignment of personal property. The trust is NOT recorded and is a private document.

As to your Trustee, DO NOT use an attorney. Here is why I recommend against using an attorney as your trustee. Using one’s own attorney would perhaps not pose a problem as long as no other unrelated beneficiaries were involved who would have separate and independent interests and financial objectives within the arrangement.

An individual trustee’s failure to charge a fee would not support the land trust’s validity in court. The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.

An attorney or law firm would most likely not be bonded as a trustee for land trusts; though his/her malpractice insurance may suffice as protection against malfeasance and/or errors and omissions.

An attorney or law firm would likely not be recognized as a bona fide trust holding institution by any court that would be challenging the integrity and purpose of a a co-beneficiary land trust title transfer.

One’s own attorney would not create a mutually trusted, unbiased third-party “escrow” entity. A biased attorney (acting in primary favor of a client) could wreak havoc in a contest involving dissention between/among beneficiaries.

Da Wiz

what is the different bet. grant deed and trust deed ?

I have a pretty basic question. How do I go about setting up a land trust? Do I have to do this through an Attorney? Do title companies handle this type of thing?

Da Wiz “First, the trust is established and you name your trustee and record a grant deed to your Trustee who takes title. I ALWAYS recommend you use a non-profit corporation that is established and familiar with the duties of a trustee.”

Do you have any recommendations for a non-profit corporation to use as a trustee?

Absolutely, I always use the same trustee whom I have come to trust and respect and I recommend his corp without reservation. I’m not sure how to tell you who he is without being accused of advertising or board hustling or some other such nonsense although I have nothing to do with his company. The best I can say is PM me and I’ll give you the info.

Da Wiz

I PM’d you mtn wizard.

I was told by an attorney that there are tax issues when using land trusts in California

Fire your attorney. He doesn’t understand land trusts. Better yet, ask him to be specific, then post it here. I’ll be happy to point out his misconception. or I will be even happier to recommend one of several California attorneys who are experienced with land trusts. Are you in Smogville or No. Cal? You can also PM.

Da Wiz

Ok so you put your home in a land trust - did any one tell you that you lose your tax exemption which is $250,000. Also if you put your apartment building into a land trust you lose your 1031 opportunity.
These are things they don’t tell you at the seminars. :o

The reason they don’t teach you that is that you are wrong.

TAX DEFERMENT - ; transfer is a “contingent sale,” possibly deferring capital gain for years. 1031 Like Kind Tax Deferred Exchange privileges can remain intact.

ASSET PROTECTION - The Trust may shield against tax-liens and creditor judgments.

An investor friend of mine said: "I’ve done a few 1031 Exchanges in Oregon and California involving NARS trusts. The first accommodator I contacted told me that trusts were illegal in Oregon. Needless to say, I looked for and found another accommodator. "

I suggest that you contact Carl Tully at Heritage Group 1 (800-767-1031), an IRS qualified 1031 Exchange intermediary since 1980 to get the straight info from the best in the business. However, if the price of documentation is your major concern, Carl will be the first to tell you that you should look elsewhere. His services are more expensive than most others, but his Docs are the best. Nobody does better work!

The $250,000 exemption does apply. You must live in a house for 2 out of the last 5 years to claim the $250,000/500,000 exclusion on your gain. Presuming the seller/grantor has lived in the home 2+ years, they would then need to sell within 3 years in order to enjoy this exclusion. I personally have done this and have enjoyed this exemption using a land trust.

I don’t know where you got your information, but I suggest to you that instead of coming on to a forum with your first post throwing out a bunch of incorrect, unsupported statements, prove them.

Da Wiz