7 Reasons to Use a Land Trust

7 Reasons to Use a Land Trust

7 Reasons to Use a Land Trust
by Bill Bronchick

The land trust is a very powerful tool for the savvy real estate investor. A land trust is a revocable, living trust used specifically for holding title to real estate. Each property is titled in a separate trust, affording maximum privacy and protection.

Here are seven reasons to use land trust for titling property to real estate.

1. Privacy: In today's information age, anyone with an internet connection can look up your ownership of real estate. Privacy is extremely important to most people who don't want others knowing what they own. For example, if you own several properties within a city that has strict code enforcement, you could end up being hauled into court for too many violations, even minor ones. Having your real estate titled in land trusts makes it difficult for city code enforcement to find who the owner is, since the trust agreement is not public record for everyone to see.

2. Protection From Liens: Real estate titled in a trust name is not subject to liens against the beneficiary of the trust. For example, if you are dealing with a seller in foreclosure, a judgment holder or the IRS can file a claim against the property in the name of the seller. If the property is titled into trust, the personal judgments or liens of the seller will not attach to the property.

3. Protection From Title Claims: If you sign a warranty deed in your own name, you are subject to potential title claims against you if there is a problem with title to the property. For example, a lien filed without your knowledge could result in liability against you, even if you purchased title insurance. A land trust in your place as seller will protect you personally against many types of title claims because the claim will be limited to the trust. If the trust already sold the property, it has no assets and thus limits your exposure to title claims.

4. Discouraging Litigation: Let's face it, people tend to only sue others who appear to have money. Attorneys who work on contingency are only likely to take cases which they can not only win, but collect, since their fee is based on collection. If your properties are hard to find, you will appear "broke" and less worth suing. Even if a potential plaintiff thinks you have assets, the difficult prospect of finding and attaching these assets will discourage litigtation against you.

5. Protection From HOA Claims: When you take title to a property in a homeowner's association (HOA), you become personally liable for all dues and assessments. This means if you buy a condo in your own name and the association asseses an amount due, they can place a lien on the property and/or sue you personally for the obligation! Don't take title in your name in an HOA, but instead take title in a land trust so that the trust itself (and thus the property) will be the sole recourse for the homeowner's association's debts.

6. Making Contracts Assignable: The ownership of a land trust (called the "beneficial interest") is assignable, similar to the way stock in a corporation is assignable. Once property is title in trust, the beneficiary of the trust can be changed without changing title to the property. This can be very advantageous in the case of a real estate contract that is non-assignable, such as in the case of a bank-owned or HUD property. Instead of making your offer in your own name, make the offer in the name of a land trust, then assign your itnerest in the land trust to a third party.

7. Making Loans "Assumable": A non-assumable loan can become effectively assumed by using a land trust. The seller transfers title into a land trust, with himself as beneficiary. This transfer does not trigger the due-on-sale clause of the mortgage. After the fact, he transfers his beneficial interest to you. This latter transaction does trigger the due-on-sale, but such transfer does not come to the attention of the lender because it is not recorded anywhere in public records. This effectively makes a non-assumable loan "assumable".

As you can see there are many creative and effective uses for the land trust, limited only by your imagination!

__________________

Anita
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"FAILURE IS NOT AN OPTION"


fyi

a repost for those that may need it. Pleas add to this if you have questions or pertinent info.

__________________

Anita
******************************************
TWITTER - anitarny / FACEBOOK - anitarny

"FAILURE IS NOT AN OPTION"


parden my dumb question

How exactly do you use, or get a land trust?

__________________

~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~


not a dumb question

read this post for more info

http://www.deangraziosi.com/real-estate-forums/contracts/18125/answers-a...

also Kimmy has posted some really great info on here about land trust, you can do a search in the forums for even more info.

__________________

Anita
******************************************
TWITTER - anitarny / FACEBOOK - anitarny

"FAILURE IS NOT AN OPTION"


shall do

thank you...I appreciate that

__________________

~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~


land trust

Iam a newbee and i was reading about making land trust loans assumable . i bought ahouse and have the loan in my name . i bought it for my daughter and her 2 kids . She wants to buy the house but her credit is terrible and so is her husbands .How do i put it in a land trust so i can let them assume my loan , with the house already recorded in my name . Any help would be appreciated . Thank you for any help you might have .


Land trust- What if ???

Hello all. I am so excited to be apart of this and everyone's comments are very encouraging, especially Anitarny. my question is what if I use a land trust and the seller dies? The lender has the note in the seller's name, will they assume something is going on there. Or how about if the loan goes dilinquent? Then what happens? Sorry if the questions offends anyone!


if somebody wants too

You can have all of the insurance in the world...Can you say civil! Just because we have bonds does not mean somebody cannot sue us! I made a promise no more key-board...I wanted to reply on this since i first heard of it many moons ago. If you think you are protected...I know of some people that thought the same way...Don,t get me wrong they where running INC. Still when they have the power too make it civil...All bets are off! My point anybody can sue anybody and anita, did you not say something about P.I.! If you are true too yourself...They can find you?

okrand/Take action


Two questions.

If you have to get a loan to close the escrow, the loan will be under your name if you don't use LLC or other entity.

Will the bank let you transfer it under land trust?

Will the home insurance company let you do that?


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