Posted by Konrad on March 03, 2005 at 17:18:16:
Thank you William.
TRUSTS - Important Question - Posted by Konrad
Posted by Konrad on March 01, 2005 at 14:02:56:
I had a rather lengthy conversation with an attorney regarding use of Trusts. Basically, whenever our company buys properties ‘subject to’, our standard strategy is to buy it in a trust with the owners being its initial beneficiaries for a day and then transfering the beneficial interest to one of our LLC’s. The attorney’s opinion is that in a case where the original owner wants to capture more of a profit from the sale of the property long after the transaction was executed, he/she could make a claim to do so and that an assignment of Beneficial Interest in a Trust would not stand a legal ground in front of a judge. This is due to fiduciary duties of the Trustee to hold it for the benefit of its original Beneficiaries.
Is this true? Does anyone have an opinion or related experience pertaining to the topic? Any comments will be very appreciated, as we buy a significant number of properties using this tactic and there is a serious concern about legal grounds for such transactions. Our company mainly does business in CT.
Thank you in advance,
Konrad
Good disclosures, good explanations - Posted by William Bronchick
Posted by William Bronchick on March 03, 2005 at 17:13:22:
Good disclosures and good explanations will alleviate any issues like
this in the future - make sure the seller understands in PLAIN ENGLISH
(the spoken word) and in WRITING that he has no interest in the
property any more.