Naming a Land or Personal PropertyTrust Question - Posted by TheTaxTruth

import · September 19, 2005, 7:32am

Posted by Rainbow on December 03, 2005 at 10:10:16:

Thank you for your comments.

Corp and LLC names of owners are much easier to get. A Land Trust does not have to be registered like the Corp or LLC are.

I believe I did mention that if someone is really out to get you, they will. But several layers of protection should delay to just stop someone with a nuissance law suit.

And I am basing a lot of what I am saying on Mr. Bronchicks articles.

Hey, it is not a bad problem to have to try to protect 100’s of properties, is it?

import · September 19, 2005, 7:32am

Naming a Land or Personal PropertyTrust Question - Posted by TheTaxTruth

Posted by TheTaxTruth on September 19, 2005 at 07:32:10:

I’m in Florida.

Are there any specific rules about naming a trust?

Can I just call my trust “Florida Holdings”?

And then have the trustee sign on documents.

Florida Holdings
Florida LLC, Trustee
Signature line for John Doe
By: John Doe, President

In other words, does the County Clerk need or have to know that the entity registering a property is a Trust? And even if they know (because of the signature in documents) does it have to be in the name of the trust?

Or the State Dept. of Motor Vehicles for that matter?

I know of someone that has 2 cars in a Trust named XYZ Leasing Services. Titled Owner appears to be a leasing agency, but entity is really a Trust that authorizes their use of the vehicle through a letter kept in the car.

Should there be an accident, when the plaintiff’s lawyer writes a letter, the Trustee will respond telling them that that the car belongs to a trust and it is prohibited from disclosing information about assets and beneficiaries.

Now Lawyer might have to go to court (if he wants to go through the trouble) to have the trustee disclose the beneficiary (which might indeed be another Trust, but that would be another story).

Opinions???

import · September 21, 2005, 6:58am

Temporary Stealth - Posted by Jimmy

Posted by Jimmy on September 21, 2005 at 06:58:53:

I’ve practiced trust & estate law for 20 years. here are some thougnts:

I am aware of no rules which restrict the name you give a trust. I have used many unusual names for trusts. I always have the word 'trust" in the title, but I am not sure that is required. You probably cannot use the word “bank” in your name, or other names which are “too close” to the names of other commercial enterprises. In other words, if yo want to name your trust “Microsoft,” and then start doing business as “Microsoft,” expect Billy’s attorneys to pay you a visit.
For any assets titled as a matter of public record (real estate and cars are 2 good examples), and for any accounts established at financial institutions, you will need to include the name of the trustee in the title. This will tip off any would-be observers that they are dealing with a trust. and will also identify the trustee. if the trustee is another trust, the trustee’s name will have to be included. an LLC or LP or corporation can serve as trustee, but these entities can be traced through the Secretary of State’s Office.
You need to give plaintiff attorneys more credit. If there is a claim that arises from the trust property (premises liability, for example), they do not necessarily care who the beneficiaries are. They care about (a) the identity of the owner, (b) the identity of the trustee, and (c) the assets and insurance coverage of the owner and trustee. The more effort you put into hiding these facts, the more you will convince the plaintiff attorney that he needs to keep digging.
Don’t get cute. If there is a significant claim, expect all of your attempts to conceal information ripped wide open.
I’m not slamming land trusts, by the way. They do offer a measure of stealth, in that a casual observer perusing the county land record website will not find 100 properties in my name (not if I scattered them into 20 different land trusts). Land trusts do a good job of keeping away predatory plaintiffs looking for a good target to sue. But once a claim pops up, expect all of this to be unraveled in short order.

import · September 22, 2005, 12:53pm

Re: Temporary Stealth - Posted by Rainbow

Posted by Rainbow on September 22, 2005 at 12:53:58:

Thank you for your answer.

It is always odd to me that if you use a trust with the specific purpose of maintain privacy, you would put in the name the facts of the trust.

I am not talking about deception but just helping not to expose your whole estate to a hungry lawyer with a not so proper claim.

import · September 22, 2005, 1:43pm

Re: Temporary Stealth - Posted by Jimmy

Posted by Jimmy on September 22, 2005 at 13:43:33:

hang on, now.

I have established privacy trusts for entertainment industry clients. As you might imagine, Tiger Woods (not my client, just an example) might want to title his real estate holdings in a manner than does not tip off the world.

a privacy trust is not terribly complicated. Usually, the lawyer (or some low profile friend or relative) is the initial trustee. so Tiger’s property might be titled as follows: “Jimmy Lawyer, Trustee of the 123 Elm Street Trust”

Nothing in that title will tip off the world that Tiger lives there.

HOWEVER--------> all it takes is one reporter to follow Tiger home, and the cover is blown.

What do you do? use an LLC, LP or other entity. whatever woeks best in your state. Put 3 or 4 properties in an entity, and then setup a new one. This can be expensive, and you will have tax returns to deal with.

If you have 100 properties scattered into 10 different trusts, but you serve as trustee of all the trusts, a county recorder owner name search will spoil your plans. You need different trustees.

One Last Thought. I think the concept of predatory lawsuits is very, very, very much exaggerated. They do happen, but they are pretty rare. The promoters of various provacy schemes exaggerate the problem to drum up business.

I have had a first row seat for this stuff over the past 20 years in my law practice. My clients are all wealthy. Lots of them got sued for lots of different reasons. Not once did a client get blindsided by a crazy lawsuit. The most frequent litigation is divorce. Next would be labor law matters (wrongful termination suits by fired employees). Next would be miscellaneous criminal stuff (teenage kid of client drunk driving, etc.). Next would be business litigation (squabbles between competitors, squabbles between co-owners). Last would be intra-family estate planning wars. and plenty of administrative law issues, where clients get ideways with city, county, state and federal agencies for an assortment of stuff.

Bottom Line: I have never seen a client sued in a predatory type suit. and I know many, many high-end estate planning attorneys, and they also have not seen these cases. We deal in asset protection every day. We’re on the front line. This stuff just does not happen the way some promoters suggest.

import · September 22, 2005, 9:32pm

Stealth and Predatory Law Suits - Posted by Rainbow

Posted by Rainbow on September 22, 2005 at 21:32:20:

Thanks for the info.

Do you still think it would be better if you owned the 100 properties (in your example) in your own name? Probably not.

If you own that many properties, the cost of doing business and putting them in trusts with a corporate entity as beneficiary whose shareholders or members are personal property (or nominee trusts) should not be that expensive.

100 properties means the value of those properties probably is equivalent to 10 to 20 million dollars. Wouldn’t it be worth it to protect that?

You did not mention any lawsuits related to rental real estate. Don’t happen as well?

That is a lot of properties to lose. A cursory search might not show that I own, or control any properties and that should deter some from continuing. I do understand that a good lawyer or investigator might discover some or all of those trusts eventually, but it really take more effort and persistance.

Still is would not be against the law to name a trust (like I mentioned before) Florida Sring Holdings or something similar. Or Orlando RE Holdings or Winter Lands…etc. You get my drift.

The recorder would see the signature of…

Winter Lands
Florida, LLC, Trustee
John Doe, President

Or something similar.

Obviously there is no attempt to conceal that it is a trust, but when you search by title, Winter Holdings would not really be a tip off.

I don’t know how much you charge for a Land Trust, but being that those are really Nominee trusts and just boiler plate them, and you can probably do your first 5 properties on the same trust, then the next 5 or 10 on another, etc, how much could it cost?

In my case, if I get a property transferred to me, I probably would have it transferred to my friends RE Management and Consulting S Corp as trustee (we already talked about it)pay him a nominal fee per year, and I would prepare all letters and papers for him to just sign. The beneficiary of it would be an LLC or which one or 2 Nominee trusts are the members (he is also the trustee) and I am the beneficiary. But the EIN used for the property is not mine, but the LLC’s. It would really take a court order to find out who the ultimate beneficiary is. Now, the IRS will now, since I’ll have to report the last Nominee Trusts with my SSN in my return. Or if I really had 100 properties, the income most likely is high enough (maybe a million a year) that might be worth to get an EIN for the last trusts and have them pay trust taxes anyway. Whichever way you go, it would take some good digging, but you first need to figure out where to dig.

Then you need to get me in court to ask me if I have any interest on the property (if a lawsuit on the rental) or beat it out of me that I am linked to that property…but how do you know to begin with?

Not impossible, but just layers of “protection” or would you advice your rich clients with irresponsible kids to leave everything in their name?

Is that too complicated if I’m paranoid enough about privacy and lawsuits, and improper government intrusions?

I think that would give me piece of mind.

Of course, I take that same scenario and layers of entities to a lawyer, and it will cost a pretty penny.

I like Nolo’s suggestion (nolo.com) of a “Legal Coach.” Instead of doing everything for me, just supervise what I am doing, review contracts, etc and guide me. I like to be involved, others might choose not.

import · December 3, 2005, 12:15am

Re: Stealth and Predatory Law Suits - Posted by Wendell E. |Schultz

Posted by Wendell E. |Schultz on December 03, 2005 at 01:15:39:

I understand that if you have a corp or LLC or trust, you are not listed in the Public vue-able papers, but if someone is injured at a property owned by 123 spring street trust, they then would pull all the paperwork for that property and know you are the beneficiary/owner. They may not discover you also own 20 more properties under individual trusts or corporations unless they find reference somewhere to those trusts or corps that give them a place to look. Once they have some indication (bank records, tax returns, canceled checks, etc,) that you may be connected to them, they can pull the records for those entities and verify it. All you can hope for from any of this is to minimise the obvious show that you own them so the average lawsuit will pass you by. But if someone really wants to get you, they’ll find you given enough time. Read Mr. Bronchicks articles! If you’re trying to never be found out forget it ! Won’t happen without taking the chance that whoever’s name you put them in doesn’t get sued or simply decide to treat them as their own. Then you’re screwed anyway.