Posted by Bill Gatten on July 08, 1999 at 12:49:59:
Yep. Thas’ the durn troof (As they say back where my roots used to be).
Bill
Land Trusts to hold properties? - Posted by Ron
Posted by Ron on July 04, 1999 at 14:21:17:
I read that holding flip properties in a land trust protects you from lawsuits because the trust is closed once the property is sold and profit taken.
I read a little bit about this on Bill Bronchick’s site, and am tempted to get his $150 course on the subject. But first:
- I already buy properties through a corporation. Does the land trust offer increased asset protection?
- Is there a better source for info than Bronchick’s course? (Better means cheaper and/or more helpful)
Thanks.
Ron
There must be more than hiding the owner! - Posted by Ron
Posted by Ron on July 05, 1999 at 22:00:36:
I don’t get it. If the purpose of a land trust is to conceal the true owner of a property, it seems that it would be easy enough to learn that.
When I sell a property, the buyer knows who I am. I think it helps me to sell a property for the buyer to meet me and get a warm feeling for who I am and what I do (or will do). I think it would be harder to pretend that I was selling the house on behalf of some mysterious trust.
(I also introduce myself to neighbors when I start work on a house so they can give me a call if there’s a problem with the house.)
I thought there was some legal aspect of a land trust that limited liability beyond merely hiding the name and address of the true owner.
Ron
Re: Land Trusts to hold properties? - Posted by Lynn Hahn
Posted by Lynn Hahn on July 05, 1999 at 11:35:13:
Get Bill Bronchick’s course, it’s worth every penny.
Lynn
Re: Land Trusts to hold properties? - Posted by Bill Gatten
Posted by Bill Gatten on July 04, 1999 at 16:17:20:
A land trust is no more of an “asset protector” than would be any living trust. However, when a co-beneficiary or a Remainder Agent is named (an unrelated party perferably) the asset (realty) is protected by virtue of its having become Personalty, and due to the fact that Personalty is not partitionable by judgement creditors. In that the Trustee hold both Legal and Equitable title, the beneficiaries are left with personal property only… (e.g., See IRS Rev. Rul. 92-105).
Bill
Re: Land Trusts to hold properties? - Posted by David Alexander
Posted by David Alexander on July 04, 1999 at 14:50:21:
The trust doesn’t provide anything but a shield of secrecy, so no one would know your corp owns the property. If know one knows…then…
Bronchicks course is worth every penny, and simple to understand and and implement.
David Alexander
Re: YUP! THERE IS! - Posted by Bill Gatten
Posted by Bill Gatten on July 07, 1999 at 14:47:07:
Hi Ron,
Secrecy, anonymity and privacy in a land trust refers to public notice, and the search someone would have to go through to determine the title vesting of a property. The issue is not whether you personally could be sued and lose; but whether or not the property would be the subject of, or the award in, the suit. The neighbors couldn’t care less whether you own the property or not; but if one of them tried to sue you for something… they’d find out real quick, that regardless of what you may have told them… you ARE NOT the owner of the property. The Trustee is the owner (legal and equitable), and they can’t sue the trustee, as trustees for land trusts are (in virtually every respect) immune from such actions. It’s the beneficiaries of a land trust who are the responsible parties; but no one knows who they are as they don’t show up anywhere, and the trustee is prohibited from releasing information on them (identity, whereabouts, etc.). A neighbor could tell their attorney that you are probably the beneficiary, and the court could come after you… but it wouldn’t be so easy for a department store or a bank, or someone just looking around to see if you owned anything worth suing you for.
If you want the trust to protect the asset (the property) more completely, then you’d need a “Remainderman (Remainder Agent, being more politically correct)” or a co-beneficiary. This way a claimant would have to pursue a Partition Action in order to get to your share of the property: then learn that what they were trying to partition was Personalty, and that Personalty is not partitionable by a judgement creditor under normal circumstances. A husband and wife can partition their interests, and co beneficiaries can but judgement creditors can’t. Even the IRS cant… though they can shoot you if they want to, or threaten to and make to sign stuff against your will).
Zis clear it up?
Bill
You can still… - Posted by David Alexander
Posted by David Alexander on July 06, 1999 at 02:39:09:
Convey that warm fuzzy feeling, the trust has nothing to do with that. Trusts simply provide a shield of secrecy and avoid probate, nothing more that I know of.
Bill Gatten or Bronchick would be the people to give you the real skinny on trusts.
Because you sell a property to someone doesn’t mean you want to announce to the world that you own it, or are carrying paper on it.
The people at least that I have dealt with have never aked one question about the trust, simply where do I sign and thanks for giving me a chance to buy your house.
David Alexander
Re: Land Trusts to hold properties? - Posted by Bob
Posted by Bob on July 05, 1999 at 21:24:10:
Doesn’t anyone ever recommend Gatten’s course?
Re: Land Trusts to hold properties? - Posted by Bud Branstetter
Posted by Bud Branstetter on July 04, 1999 at 20:43:56:
I think you’re going to have to say it in English if you want him to understand.
Now I get it! Thanks Bill. - Posted by Ron
Posted by Ron on July 07, 1999 at 20:08:55:
Now there’s an answer even I could understand. Thanks.
Is it also true that the trust is closed upon ultimate re-sale of the property. Any suits against the trust are suing an empty entity. Litigants have no further recourse except against the beneficiary (as you spelled out above)
Is this right?
Thanks again.
Ron
Re: Land Trusts to hold properties? - Posted by Bill Gatten
Posted by Bill Gatten on July 05, 1999 at 19:22:29:
OK, I’ll try.
Relative to Asset Protection per se–other than avoiding probate when one’s proverbial bucket has been duly kicked–unless there are two unrelated beneficiaries in it, a land trust don’t do diddly-squat. Although tucking the asset away behind the smoke of a land trust does, of course, make it a smidgeon harder to find for all but the most determined.
Bill