50 Reasons to Use a Land Trust

By: Randy Hughes

Have you ever thought about using a Land Trust to hold title to your real estate investments? Here are 50 reasons for you to consider the benefits of using a Land Trust.

1. Avoids property being probated (out of court transfer upon death of beneficiary)

2. Ease of Transferability (Documentary stamps may be avoided as well as title insurance)

3. Judgments against the beneficiary do not attach to the property (This allows an individual with judgments and or liens to buy and sell real estate freely without having to worry about those judgments or liens attaching to the property).

4. No Partition (avoids spouse’s “forced share” sale buyout upon divorce)

5. Easier management with multiple owners (multiple owners do not have to sign docs)

6. No costs upon transferring beneficiary

7. No registered agent needed

8. Legal and Equitable property interest in trustee’s name

9. Income and Expense conduit, not a business with tax consequences

10. No tax return to file (pass thru entity)

11. Trustee has no personal liability

12. No annual fees like other entities (if trustee is an individual or friend)

13. Estate planning – successor beneficiaries

14. Avoids state sales tax on transfers (in most states)

15. Avoids the due on sale clause

16. Privacy of ownership

17. Keep sales price private

18. Able to fracture interests of multiple owners without being partners

19. Ease of linkage to other asset protection entities

20. Non-judicial repossessions of real estate sold on installment contract

21. 1099 not required for transfers (personal property not subject to real estate regulations)

22. Ease of operating across state lines

23. Ability to insert poison pills

24. One Hundred Years of case law to support land trust usage

25. Many attorneys do not study this section of the law – not profitable for them

26. No recordation of the Trust Agreement

27. To avoid “seasoning” problems (secondary market rules of ownership)

28. To save title insurance premiums (Trustee is the insured)

29. Good negotiating technique in the sale/purchase of property

30. To provide non-recourse financing

31. Stabilizes real estate taxes (prevents re-assessment)

32. Avoids state regulations that apply to corporations and LLC’s

33. Using the Beneficial Shares as collateral for a loan (makes for quick borrowing)

34. Protection from Title Claims (claims limited to the trust)

35. Helps avoid Identity Theft of your name and signature

36.  Makes contracts “assignable”

37.  Protection from Homeowner’s Association Claims

38.  Helps keep the Title clear of defects

39. Can use Beneficial Interest as Collateral

40. Good structure for doing business with others without using your personal name

41. Land Trusts and Corporations

42. No Personal Credit Reporting

43. Aides with Strategic Foreclosure

44. Ease of Management in the Event of Conflict (allows for buyout provisions)

45. Estate Planning Tool (transferring of Beneficial Shares)

46. Ease of Managing the Disability of the Trustee or Beneficial Owner(s)

47. The Beneficiary’ Interest Can be Used as Collateral for a Loan

48. Save money on State Income tax

49. Land Trusts create a lot of uncertainty

As you can see, Land Trusts are a wonderful tool for you to hide your assets, avoid real estate tax increases, privatize your sales transactions, avoid probate and use for many other benefits. Now you have a BASIC understanding of why people use Land Trusts. Are you working hard to acquire assets? You will spend a life time building your financial estate… spend a little time and money learning how to protect your net worth from the deadbeats and their contingency fee lawyers.

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