123's Of Subject 2
ok i really need for something to be cleared up.
1. when you have the seller put his property into a trust. What is exactly being entered. For example the seller IS the trustor, but who is the trustee ? ME, A freind of mine etc......
Is the the seller the original beneficiary and then assigns his interest to me where I become the beneficiary?
Also-
When you put the property into a Land Trust, and want to fill out the Warranty Deed is the Trust the Grantee on the deed, or is my LLC.
Also-
I have read some where you should also
include your contact information on the Warranty Deed to have all legal notices sent to you. The confusion in this reading was that they stated that it should say "my name",trustee. I did not think that i was the trustee in the Land trust. 
Not sure I am exactly correct but will take a stab since no once has.
[quote]
On 2003-10-11 23:55, chaynes wrote:
ok i really need for something to be cleared up.
1. when you have the seller put his property into a trust. What is exactly being entered. For example the seller IS the trustor, but who is the trustee ? ME, A freind of mine etc......
Anyone can be the trustee I think. But the trust is a layer of asset protection and nothing else. The purpose is to keep the owner's identity hidden. If you are trustee, you get little protection, if a friend, you get more, if an entity, maybe more, if out of state friend, even better ...
Is the the seller the original beneficiary and then assigns his interest to me where I become the beneficiary?
yes
Also-
When you put the property into a Land Trust, and want to fill out the Warranty Deed is the Trust the Grantee on the deed, or is my LLC.
I believe when you do the WD, you are filling it out to transfer property to trustee and referencing the trust. I know that isn't quite right but is very close.
Also-
I have read some where you should also
include your contact information on the Warranty Deed to have all legal notices sent to you. The confusion in this reading was that they stated that it should say "my name",trustee. I did not think that i was the trustee in the Land trust.
As eluded to above, you never want to be trustee of your own trusts (or LLC's). So, yes, you want to have note at bottom of WD to send all tax bills to "Your LLC" % of Trusttee at Trustee's address. This keeps anyone from knowing your location but keeps you informed of taxes and other notices.
Sootie You are making a blackman blush over hear...except sorry to inform you the Land Trust is NOT a form of a$$et-protection but a way of taking or holding title to a property.
The creative structures, added forms, contracts and beneficiary agreement give foundation to a$$et-protection features of LTs and the like.
The land trust should first be set up as a simple living trust with the owner/seller as the ONLY named beneficiary...
Then Get the Deed + a Pwr of ATTY and then have the owner/seller to either sign an ABI (assignment of Beneficial Interest) or DO IT YOURSELF now that you have the Pwr of ATTY!!!
RIGHT???
Locate a tenant buyer or quick turn the property (wholesale) for some quick Ca$H
or
Retail for even BIGGER CA$H and NO DOUBLE CLOSING COST$!!!
Doe this help you now???
I Hope that it does!
Derrick Ali
I agree that a land trust is a way of holding title to property, but for what purpose? You don't create more paperwork unless there is a reason for it and my understanding (keeping in mind, no deals yet) that the only reason to hold title in a land trust is to create a "curtain" for which someone must find a way to get behind it. In this way, it would be asset protection in that if someone is suing you, but can't find what properties you own (outside of the one being subject of lawsuit) they can't tie that property up or make it a basis for any damages. Does that sound better or what am I missing?
Land Trust are great if you're doing sub2 deals. It keeps the lenders from actually knowing who owns/has title to the property...especially if you set it up right.
They are less likely to proceed with the DOS clause if they think the actual owner just transfered title into a Land Trust.
Good luck~
What are the steps to setting up a Land Trust?
DaBuddha:
Nice to meet you!
First thing done when setting up a Land Trust is:
1 - Owner/Settlor or Grantor) Creates a Simple Living Trust (Pre-printed forms avl @ Office Supply Stores.)
2 - Name the Trust the "John Smith Trust"
or the
"123 Main St. Trust"
3- Settlor/Grantor conveys Warranty Deed Grantor or Trust Deed to the:
Trustee of the "name of" Trust!
4- The Deed is then recorded at the county courthouse along with a Delcaration of Trust form or Certificate of Trust form.
Sit back until termination of the Trust or REPEAT the prcess again with other A$$ets (RE) you purchase!
The entire process can cost about a couple hundred $ or so...
That is unless you are structuring a Creative RE transaction within an LT look for a range of 2% to 4% and CHARGE YOUR BUYER This AMT as Closing Cost or "Buy-in" payment for becoming a beneficiary-owner within your Land Trust.
I hope this helps!
Derrick
so basically the seller puts their property into a trust. the seller is the beneficiary.
the grantor/seller then signs over the Warranty deed and the grantee is the "trustee" of the trust that was created.
If the trustee is a friend or out of town relative etc. the deed would be recorded with their name. Do most people object to have their names recorded all over the place like that. I mean friend or relative or what ever would not want notice to the world that they are deeded on several properties? Why couldn't you use another entity or person for the grantee?Like a LLC or Corp?
What about tax information, I would want that not my "friend", yet some say to add a side note to send tax info etc to the trustee.
is the seller actually signing over their interest to me or the trustee?
CHaynes:
You Wrote---
[qoute]"...I mean friend or relative or what ever would not want notice to the world that they are deeded on several properties?
Trustee can be an LLC, Atty, Title Agency ,or a Bank 's Trust Ofcr.
Why couldn't you use another entity or person for the grantee?Like a LLC or Corp?
SEE ABOVE
"What about tax information, I would want that not my "friend", yet some say to add a side note to send tax info etc to the trustee. "
Trust don't pay income taxes...
Although the Trustee guarantees payment of property taxes and mortgage interest, these deductions are passed along to the beneficiary(s)
IRS rules allow these tax benes to be RESOLD as an addl. PROFIT-CTR if the trust has been structured properly...I can send you more info.)
"...is the seller actually signing over their interest to me or the trustee?"[/qoute]
The Trustee Holds both LEGAL & EQUITABLE Title to the property held within the Trust...
And EXCLUSIVELY for the rights and in complete FIDUCIARY obligation to the BENEFICIARIES (non-titled Owners.)
I hope this helps!
Derrick Ali
Is there anything wrong with having the interest of the trust in an LLC and you the trustee or vise versa.
NOPE!!!
Will I have protection if It's my LLC and I'm the trustee? I don't know why I would do that but I just want to know. I know one reason for the trust is to hide the owner, but I just want to make sure a lawyer wouldn't have a field day with me if I was the trustee and the LLC had the interest or vice versa.
WHOA...
okay so what protects me, if for any reason I have a intelligent person assigned as a trustee ; how am i protected? Also what is said to the seller to explain using an outsider as a trustee?
what i am getting is that the "Trustee" has the true power in this situation. Does my power of attorney supersede this power?
If the trustee is given the beneficiary interest and the equitable interest and I sell the house what happens?
Proud of you derek ali
NebulousD
Will I have protection if It's my LLC and I'm the trustee? I don't know why I would do that but I just want to know. I know one reason for the trust is to hide the owner, but I just want to make sure a lawyer
I think you already answered your own Q….
My take is I don’t know since I would never structure a Trust in the above manner.
CHaynes Wrote---
Quote:okay so what protects me, if for any reason I have a intelligent person assigned as a trustee ; how am i protected?
You are a Beneficiary,
Your Beneficiary Agreement,
Your Settlor Status and/or
Your Power of Atty Plus Voting Rights
All within a BENEFICARY DIRECTED (Not Trustee-Directed) LAND TRUST Agreement
Quote:Also what is said to the seller to explain using an outsider as a trustee?
NOTHING if you've got the POAtty + Majority Benefical Interest within the Trust
Quote:what i am getting is that the "Trustee" has the true power in this situation.
WRONG-unless you give it to them
Quote:Does my power of attorney supersede this power?[/qoute] YES!
[qoute]If the trustee is given the beneficiary interest and the equitable interest and I sell the house what happens?
First of all the TRUSTEE should NEVER have BENEFICIAL INTEREST unless they are the Settlor Grantor within the trust.
Less the protective sheild of a Trust can EASILY be BROKEN by even a not too bright ATTY.
In order to sell the house YOU Direct the TRUSTEE to TERMINATE the TRUST and place the property up for sell to an approved Buyer Capable of paying off the existing mortgage and intended YOUR PROFIT.
Make sense Yet??
I Hope it does!
Derrick Ali [ Edited by DerrickAli on Date 10/24/2003 ]
Okie, let me get this right...
The Trustee can be a LLC but can it be the buyer's LLC (the RE Investor's Company?)
The seller creates a simple living trust in the name of 123 Main St, Trust. They name the seller the beneficiaries? (or Buyers?). I'm so confused.
I know there are three parties to this plan: seller/grantor, buyer/grantee, trustee/third party<--confused here. Who picks or appoints trustees?
Maybe I'm just way off! Please help....I'm drowning!
[quote]
On 2003-10-24 11:21, DerrickAli wrote
CHaynes Wrote---
Quote:okay so what protects me, if for any reason I have a intelligent person assigned as a trustee ; how am i protected?
You are a Beneficiary,
"I thought the seller was the only beneficiary (and maybe the some family members)in the trust. Your above statement says otherwise. Am Iunderstanding that right?"
Your Beneficiary Agreement,
"which the seller has assigned over to me" or I assigned over to myself with the power of attorney"
Your Settlor Status and/or
"??"
Quote:okay so what protects me, if for any reason I have a intelligent person assigned as a trustee ; how am i protected? As Derrick Ali pointed out, a trust does not provide any asset protection. A trust provides a measure of anonymity. A trust is simply making it a little harder for someone to discover what assets you own. Once your ownership is discovered, however, the trust does not prevent any attack upon the assets.
Quote:Also what is said to the seller to explain using an outsider as a trustee?You tell the seller to make himself trustee when the seller sets up the original trust. When the seller assigns beneficial interest to you, then you appoint a neutral third party as a substitute trustee. The seller drops out of the picture.
Quote:what i am getting is that the "Trustee" has the true power in this situation. Does my power of attorney supersede this power?The power of attorney has pretty much served its purpose at this point. What controls the trustee going forward are the powers of the trustee as defined by the language of the trust.
Quote:If the trustee is given the beneficiary interest and the equitable interest and I sell the house what happens?You don't own the house, therefore you can't sell it. You can negotiate the sale of the property, but the trustee will sign the contract and the trustee will have to convey title from the trust to the buyer. As the beneficiary of the trust, you receive the proceeds of the sale, then dissolve the trust. I myself am not clear why Derrick says beneficial interest is vested in the trustee rather than the actual beneficiary. Either he misspoke, or, I don't have a good handle on this either.
CHaynes
Quote:"I thought the seller was the only beneficiary (and maybe the some family members)in the trust. Your above statement says otherwise. Am Iunderstanding that right?"
NOPE!!!
Before even selecting a Trustee one has to have a PURPOSE for the TRUST (Management of Your A$$ETS) and Role for the TRUSTEE (Your Employee Mgr of the A$$ETS)
It is YOU who Appoints the Trustee and
It is YOU who Conveys the Title of the property into a Trust and
It is YOU (the REI) who has Pwr of Atty,
Majority Voting rights in the Trust and...
Quote:Your Beneficiary Agreement,
"which the seller has assigned over to me" or I assigned over to myself with the power of attorney"
A SILENT Assignment of Beneficial Interest from the original Settlor/Owner (Not RECORDED but ACKNOWLEDGE ONLY by the TRUSTEE
DaveT
Quote:You don't own the house, therefore you can't sell it. You can negotiate the sale of the property, but the trustee will sign the contract and the trustee will have to convey title from the trust to the buyer. As the beneficiary of the trust, you receive the proceeds of the sale, then dissolve the trust. I myself am not clear why Derrick says beneficial interest is vested in the trustee rather than the actual beneficiary. Either he misspoke, or, I don't have a good handle on this either.
Dave You are near K-REKT...but I reviewed my previous post here and CANNOT FIND WHERE I SAID This Please show me where I goofed in case I did put it somewhere???
Sorry Derrick, I don't see where you did say it. Chaynes was paraphrasing you so much, I guess I let him put words in your mouth.
My mistake, I apologize.
I do apologize I did mis-contrue the words of Mr. Ali he actually said
"The Trustee Holds both LEGAL & EQUITABLE Title to the property held within the Trust...
And EXCLUSIVELY for the rights and in complete FIDUCIARY obligation to the BENEFICIARIES (non-titled Owners.)
I hope this helps!
Derrick Ali "
....and DavidT thanks for your input. This "lady" really appreciates it.
[ Edited by chaynes on Date 10/26/2003 ]
YOU ARE MOST INDEEDY WELCOME ME 'BAT' LADY!!!
D Ali