Land Trusts And Liens/judgments?
If I deed a property into the "Smith Family Trust" (last name of seller) and the sellers get a lien or judgment against them- would this now attach to the property eventhough the trustee owns the property & I have a separate Assignment of Ben. Int. from the seller to me/my entity???
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joeyd,
What you are saying is that you are placing a property in a Land Trust with the seller being the benificiary and you having a separate assignment of of benificial interest., which has not taken effect.
Trustee LAW somebody who is given the legal authority to manage money or property on behalf of somebody else.
The trust owns the property not the Trustee.
Beneficiary LAW somebody who is entitled by a will, trust or insurance policy to receive money or property.
What this means is the seller albeit he or she is the beneficiary would still have to claim the property as an "asset", which then makes it attachable.
Land Trusts are not the catch all to hide assets, any attorney in a deposition can find what a person owns or is the beneficiary of, I would not recommend comitting perjury or fraud and not disclosing what you own when asked in a court authorized deposition or an IRS audit.
John $Cash$ Locke
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John $Cash$ Locke,
Glad to meet you also.
Once again you are correct inasmuch as if the trust is set up as you say, with the person seeking asset protection as the beneficiary they could be subject to releasing assets. BUt, it would be very foolish for a person seeking asset protection to be the beneficiary in a land trust. To properly perfect, the beneficiary would need to be a third trusted party that in unaffected by the charging party.
I also agree with you that it would be prudent for the poster to use another option in this instance, but that may not be available. Thus, a trust set up properly can be an effective avoidance and a reasonable option to employ, right?
Who is to say that they are infact the benificiaries? If he only records the Warrenty deed to Trust and holds the Documents himself and has both his co. and the sellers benificiary documents who knows who the ben. is? It is whoever the trustee wants it to be right??
If they ask them for their Assets and they say that they are ben. and this is not recorded and the trustee shows they are not, how is that affective? There would be no proof of public record that they are infact ben. of the property?
I see the benefit of the Land Trust as getting title to the property out of my name. I have named my LLC as the beneficiary to give liability protection.
billinseattle,
Are you saying you own the property and you use a trusted 3rd party as a Beneficiary thereby the property would not show in your name.
Now you are deposed by a creditor, the IRS or someone that has a claim against you, would you not say that you are the owner of a property that you really own?
What I say is you should hope this trusted friend does not decide one day to sell your properties and claim there are his and take the money for himself, because once you do it this way you have lost control of the property.
I talked at length with the powers that be in North Carolina about using land trusts with creative real estate investing and they call it fraud. Probably because they and other state agencies read discussion boards and see that it is not about asset protection but trying to hide ownership.
How long do you think it will be until other states pick up on this and decide to make some creative investor the scapegoat for using land trusts. You constantly read about attacks against the creative real estate industry, partly because of some of the methods employed by the less than truthful ways of doing business.
I have an acquaintance who specializes in asset protection for folks in the movie industry and corporate industry and Land Trusts did not show up as part of the asset protection plan.
John $Cash$ Locke
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lcboone,
Glad to meet you.
You can put the property into an LLC or other coporate entity without using a land trust when you are looking for Liability Protection.
Bottom line is when someone in authority wants to find out who owns the property they will.
John $Cash$ Locke
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I just had trouble getting title insurance on a property that was held in trust. The warranty deed to trustee did not specify the powers of the trustee. The trustee had multiple liens against him, and nobody could find the original land trust agreement which should specify the trustee powers. Fortunately the lender had their copy of the morgagees policy and my title guy wrote from that policy.
Make sure your warranty deed to trustee specifies the powers of the trustee.
Brenda
Isnt it true that you can put the benificiary of a trust into a Personal turst therefore making a trust inside of a trust?
Keep watching folks, I think I see a lesson about Trusts heading our way.
John M,
Thank you for jumping in, I think people are confused with what the purpose of a Land Trust is used for.
It is used for "Anonomity" reasons to a point, it probably got started as a way to hide ownership of a property from the lender when doing creative real estate deals and not true asset protection.
John $Cash$ Locke
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i always was under the impression that a trust is used for anonomity and your LLC was for asset protection, thats why you name your LLC as beneficiary, so you have both or like ryan said use a personal trust inside a land trust, with your LLC as beneficiary of the personal trust so its double anonomity. [ Edited by ZinOrganization on Date 03/13/2005 ]
John M,
I did not say that you would hide your beneficial interest from anyone, I merely said that you, as the beneficiary, have the use of the assets of the trust but DO NOT own the assets. As a judgment creditor, you have no action in that scenario. And it wouldn’t be a felony, it is fraud if you misrepresent ownership. A felony is punishable by imprisonment. In this instance, you can’t go to prison for a civil debt.
Also, just to keep things correct and precise. Land Trusts were never created for the explicit purpose of “anonymity” They were created for land and natural resource conservancy. Anonymity is a by-product of the methodology. Asset protection is a derivative of that.
joeyd - if you dont mind my asking, what is the title of that book and where did you happen to pick it up? thanks.
www.booksonlandtrusts.com
P.S. you might not be able to get onto that site because it is in a trust. You will have to ask the benificiary under oath is he owns that asset. If you cant do that dont bother.
you can go to www.amazon.com or one of these cheap books websites and type in Land Trusts or the author Mark Warda ZinOrganization -- and --very funny ryand.
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So let me get this straight.
The creditor gets a judgment from the court for the income or assets of the Beneficiary of the trust, which he can.
The Trustee says to hell with the court order I am not going to distribute any income or assets from the trust and the creditor is going to have to pay income tax on money he did not receive?.
Is this what you are saying.
John $Cash$ Locke
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officially confused. but i will read the post over a few more times
Bill,
Thank you for stopping by and setting the record straight.
If you want to know about trusts you have just read what the Leading Expert in this field had to say.
When you hear if from Bill Gatten you can take it to the bank as it is just like gold.
John $Cash$ Locke
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Bill,
You are always welcome here at TCI. I think I have paid enough dues here to make that statement.
Now that you are here I can take my keyboard and get back to posting in other areas of investing.
I was thinking about what you said posters on discussion boards and what came to mind was going on your discussion board as a Subject To investor, which is like being the anti-Christ of investing to the members there.
However, I was treated with courtesy and respect by the members there at all times.
Are you ready for another Tiajuana run, I still think she liked me better.
John $Cash$ Locke
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Hi All,
I recently set up a Nevada LLC to handle my Real Estate Investing and Nevada C Corp to mange my properties. I’m about to do my first transaction using a Land Trust that I received from Dwan Bent-Twyford and Sharon Restrepo legal forms. My questions are:
1. Who is responsible for filling out the Land Trust and making sure that it is done properly?
2. Will the bank have any problem with me putting title into trust? If so, what should I have as an alternative? Quiet Claim Deed? What is needed?
3. If I am the trustee and my LLC the beneficiary, aren’t my signatures going to show me as being both on the trust? Does the trust have to be recorded? If so, can’t someone look up the trust and see both signatures?
4. If my LLC is going to be the beneficiary, what LLC documents do I have to bring to closing?
5. Lastly, is there any tax filing associated with the Land Trust or is it being passed on to the LLC as the beneficiary?
I know this is a mouth full, but I greatly appreciate it.
Thanks, Robb