Fundamentals Of Land Trusts

By Author: Jay Butler
Total Articles: 7
Comment this article

Land trusts, sometimes referred to as Florida or Illinois trusts because of their favorable state laws, are designed to hold title to property. Technically, a land trust is an intervivos trust. Intervivos means "among the living" and hence the term, living trust. A land trust, along with other revocable trusts provides no asset protection! The purpose for using a land trust is anonymity, ease of transferring title, avoiding a due on sale clause, avoiding probate, assuming non-assumable mortgages as well as avoiding reassessment fees and transfer taxes. Land trust assets are considered personal property and not real property, which is not subject to judgment creditors in some states.

Reassessment fees may occur anytime there is a change in property ownership. In order to avoid reassessment fees when using a land trust, the percentage of ownership must remain unchanged and be the same the day after transfer of title as it was the day before. This includes continuity of ownership throughout the entities involved with the transfer. Should the ownership in the entities involved in the transfer differ from that of the property, ...
... you may be subject to reassessment fees. For people living in California, Proposition 13 allows immediate family members (father, mother, son or daughter) to be added to the title without invoking a change of ownership.

Land trusts help avoid a due-on-sale clause invoked by a lender (bank). A due on sale clause is when a lender intends to accelerate your loan payments by calling the loan due. Banks loan money to you for the purchase of a property, should you quit claim deed that property (transfer ownership) to an entity, even if you are sole owner of that entity (Corporation or LLC), that is a transfer to a different person and lenders consider that a sale. By utilizing a land trust you take advantage of the Garn - St. Germain Act and avoid the invocation of a due on sale clause. The Garn - St. Germain. Act permits the transfer of a property into a land trust without the lender's ability to invoke the due on sale clause. Land trust agreements are private documents, only the filing of title made with the county recorder's office is public. The land trust document, along with most documents for trusts, remains private as no public record of the agreement is ever filed. This provides excellent anonymity for both the trustee and beneficiary.

Author Info:-

Jay Butler is an asset protection specialist for an International Business Company in the Republic of Seychelles. Visit their website for more details and free consultations on how to properly use trusts or land trusts. For More Information visit us at:- http://www.assetprotectionservices.com/