Use a land trust as a second layer of asset protection to buy, take title, hold and sell real estate. They act as a separate entity although you retain total control. They create anonymous ownership that discourages litigation and ensure purchase and sales price remains concealed.
Plus they're easy to use and you'll:
Avoid Liens and Judgments
Avoid Seasoning or Chain of Title issues
and Inheritance taxes
Avoid Partition with business partners
Using a trust as the manager of your LLC or officer or stockholder of your corporation, you can keep your name off the public records.
Quick set-up. A trustee is named, use your favorite attorney. And a beneficiary is assigned. You can use your own name but we prefer to use one of our Corporations or an LLC because it keeps the trust tight. But only the trustee's (attorney's) name appears in public records, not yours or your company's info.
However, beware, never name any trust using your company name, your family name, or the street name of the property. Random numbers work best like Trust #92165B. Get Legal forms here.
Make a non-assumable loan assumable and a non-assignable contract assignable; simply by signing over your beneficiary rights. Trusts are especially advised if you're wholesaling or lease optioning properties.
Avoid seasoning issues, when you sell the property because instead of a sale it is legally seen as a transfer. The beneficial rights of the trust will be signed over to the new owner. The new owner will then control/own the trust and the trust will own the property. This type of trust will also help to keep closing and title costs low.
Secure collateral when lending money for real estate, by giving you control of the property until the note is paid. And you still get the tax advantages, even though it's not in your name.
Save money. The sale of the land trust or the property in it are never revealed which usually results in lower property taxes and no state sales tax. Also, you'll save on Title Insurance since the chain of title remains the same.
Use tax laws and legal maneuvers to keep land trusts off your tax return. Tell your CPA or accountant to report the income from the trust on a K-1 trust return to an assembly trust, that nets all the properties and enters a one line number on the trust return. Sounds like Geek but a CPA or tax professional will know how to do it, you just need to tell them to do it. That's what having the power of knowledge is all about.
The property in the Land trust is controlled by the land trust and the Land trust is controlled by the beneficiary. The beneficiary can be an LLC, or any other legal entity or an individual.
Pro Tip: Write all of your contracts, take possession and sell every property in a land trust.
The cost to create a trust. Usually, about $400 to create and $100 a year to maintain if you use a real estate or trust attorney. And the peace of mind knowing that you and all your assets are protected is priceless.