You may be considering establishing a trust as part of your estate planning, or maybe you already have one and are familiar with how they work. But are you familiar with all types of trusts, especially if you want to use one to purchase land? When working with an estate planning attorney, if you have an idea that at some point you may wish to purchase land, be sure to raise that point. It may end up being more sensible to purchase real estate with a land trust rather than purchasing it in your own name and then transferring to your trust. Every case is different which is why consulting an estate planning attorney before you sign on the dotted line is wise.
What is a land trust?
As your estate planning attorney might explain, a land trust is a revocable grantor trust that enables private landowners to transfer a land title to a trustee. The trustee is the individual who manages the trust. The grantor is the person who created the trust. As with any other assets in the trust, the real estate is managed by the trustee according to how the grantor or owner of the trust specifies that it should be managed.
What are the benefits of a land trust?
In most cases, land trust provides asset protection benefits.
The primary benefit is enjoying the privacy of ownership of the real property. Public records will simply reflect that a land trust owns the property through the owner of the land trust is not disclosed. Those who appear to not own any assets are less likely to be sued.
Because each piece of real estate can be transferred into separate land trusts, if one of the properties is involved in litigation, it will not automatically affect the other properties.
What documentation is required to place real property into a land trust?
There are two documents that are required:
1. The land trust. This will name the trustee who manages the trust, the grantor who created the trust and placed their assets into the trust. The beneficiary of the trust is also named. The land trust document can be held privately and does not need to be filed as a public record.
2. The deed. This is the document submitted as a public record and reflects the name of the person who sold the property to the trust, as well as the trustee’s name. Though the trustee will hold title to the property under the trust’s terms, they do not own the property themselves.
Will a public record search list my name as the owner of the property?
No, it will not. The deed will reflect the trust’s name rather than yours.
To learn more about how a revocable trust for purchasing land may be beneficial to establish during your estate planning process, contact an attorney, like an estate planning lawyer in Allentown, PA, today.
Thank you to the experts at Klenk Law for their input into estate planning, wills, and trusts.