Land Trust Or Llc
guy
which is better land trusts or llc
is it easy to get a loan under the trust name?
guy
which is better land trusts or llc
is it easy to get a loan under the trust name?
They are different. I work only with Equity Holding Trusts (more than one beneficiary). A creditor of a beneficiary in a co-beneficiary land trust may not attach the land or claim an interest in its corpus. (Such protection is similar in effect to holding a property in a limited partnership or multiple member limited liability company)
• Resnick, Bernard, “Is There Such a Thing As A California land trust?” See pg. 225, L.A. Bar Bulletin, April 1973
• Finnie v. Smith, 82 Cal. App. 707 (1927)
• IRC §1034; Rev. Rul. #66-159, 1966-1 C.B. 162
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Regarding ownership in the land trust, one’s beneficiary interest (being intangible personal property versus real property) provides a high degree of protection (though not absolute insurance) against a judgment creditor’s partitioning of one party’s interest from that of another: thereby forcing the sale of part of the property or liquidating it and dividing the proceeds.
To best protect against such event, it is prudent for land trust participants to hold their respective beneficiary interests in a Limited Liability entity such as a Limited Partnership or a Limited Liability Company (LLC). In so doing, each beneficiary can then be free of concern about the accidental or untoward misdeeds of the other (i.e., dealings that could otherwise easily involve the property’s title by either party’s creditor’s claims, tax liens, bankruptcy, legal actions in marital disputes, probate, etc.).
An LLC will protect your personal assets but leave the real property unprotected and subject to liens and encumbrances. The land trust provides that protection.
No -- you get a loan in your own name, or in the name of the LLC. [ Edited by mtnwizard on Date 10/27/2006 ]
You are correct about a simple land trust with only one beneficiary. A land trust with more than one unrelated co-beneficiary provides outstanding protection because one’s beneficiary interest (being intangible personal property versus real property) provides a high degree of protection against a judgment creditor’s partitioning of one party’s interest from that of another: thereby forcing the sale of part of the property or liquidating it and dividing the proceeds.
“Since the interest of the beneficiaries under a land trust is personal property, and since the trust agreement expressly precludes the vesting of any legal or equitable right in a beneficiary, partition is not available.”
Henry W. Kenoe, Keno on Land Trust, IICLE, p 3-012 Sec. 3-9 (1989)
Hope this clarifies this.
Not a lawyer.
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Not sure you need an attorney to setup S corporation check out http://www.instantinc.us
Sorry about that I thought you were looking for S corporation. Any real estate attorney in SC should know about land trusts[ Edited by ctsee11 on Date 11/01/2006 ]
There are few real estate attorneys in any state that know anything about land trusts. Take if from someone who uses them regularly.
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