A Land Trust is a simple, inexpensive method for handling the ownership of real estate. Find out the facts about land trust through the presentations we have prepared.
Who may create a land trust?
A land trust may be created by anyone capable of entering into a contract. It may be created by an individual, by a group of persons such as a partnership, syndicate or business association, or two or more private individuals who desire to purchase and own real estate as a joint venture.
How does a land trust operate?
Under a land trust agreement, the beneficiary retains complete control of the real estate in the same manner as if the recorded title would be in their name. The trust may end whenever the beneficiary desires, or additional property may be added to the trust whenever. At all times the beneficiary deals with the property as though they were the record title owner. The trustee, only when directed in writing by the beneficiary, executes deeds and mortgages and deals with the property only if so directed.
What are the benefits of having a land trust?
Privacy of Ownership
Under a land trust, the real identity of the owner is never disclosed to the public. This feature can be important for many reasons. For example, a number of persons may be purchasing several parcels of real estate for some special purpose, and this result can be best accomplished if the objective is not made public. Co-owners may desire that the interest of each member be kept confidential. An individual owner may not want to be burdened with inquiries. Whatever the reason may be for not disclosing the real identity of the owner, the land trust provides the answer.
Protection for Owner
A land trust offers particular benefits in those cases where the real estate is held by two or more persons. If the property is owned by two or more persons, the title to the property might become faulty and unmerchantable because of death, legal disability, divorce, judgments or many other types of litigation affecting one of the co-owners. Where the property is held in a land trust, a judgment against one of the beneficiaries will not constitute a lien upon the real estate held in trust; neither will the ordinary legal proceedings against any of the beneficiaries becloud the title.
Succession and Ownership
It has been a common practice to create joint tenancy in real estate holdings solely for the purpose of providing a succession of ownership on death without the expense and delay of probate proceedings. Under joint ownership, however, either of the joint tenants is given an immediate interest in the ownership and management of that property; and in many cases it handicaps the real owner in his dealing with the property without the written consent of the joint owner and the other spouse. Under the land trust agreement, the party creating the trust can, if he so desires, retain sole control over the property during his lifetime.
Ease of Conveyance
A land trust affords a convenient means of mortgaging and selling a trust property without having to obtain deeds from all the beneficiaries and their spouses. It dispenses with the necessity of obtaining the release and waiver of homestead from the husband's or wife's of the party's interest in the trust real estate. These are especially noteworthy features if many individuals are interested in the property and are scattered throughout the United States. Also, since the beneficial interest is considered to have the legal characteristics of personal property, it can be pledged for a loan according to the same standards as stocks, bonds, automobiles or other personal property.