Avoid Having A Land Trust Deemed 'DRY'!
Gotthis from amember who PM'd me:
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Tone:
Is this a Subj-2 deals?
If so the lender can call the loan DUE (DOS violation) unless the Seller has at least 10% beneficial interest remaining inthe Trust.
'Dry' is a term that is used by a judge to determine the invalidity of a trust having no real purpose than to hide true ownership.
A Trustis a VALID Trust as long asALL ofit's components hold up under sctrutiny of trust formation laws of the State where the Trust is declared.
You need to have:
A Trustee
A Beneficiary
and
An Asset deeded to theTrustee for preservation on behalf of the Beneficiary(s)
The Trust cannot be 'busted' or deemed 'dry' if it is set up correctly...example being:
You the investor can be the Trustee(better to have a 3rdPty) the Owner whom sells to you can remain astheONLY listed Beneficiary and still forfeit the remaing % of their BI to YOU upon pay off ofthe existing mortgage and/or equity, etc.
a Trust having 2 or more non-related member co-beneficiaries can successfully withstand scrutiny of a judge and/or aggressive atty looking to un-sheild and grab up all the goodies held by theTrust.
As my mentor BILL GATTEN says: The Trustee can confidently tell theAtty to GO POUND SALT!! When they attempt to disolve your Trust Agreement.
Check the with your own RE/TRUST Atty to be clear on how to properly arrange your future transactions!
Let me know if you need a good referral as well!
Best of good fortune to you!
Derrick <IMG SRC="images/forum/smilies/icon_biggrin.gif"> [ Edited by DerrickAli on Date 11/19/2003 ]
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