Land Trust Attorney

 

How Does A Land Trust Protect My Privacy?

The land trust is a very powerful tool for someone that does not want the public to know where you live or what real estate you own.

If you are purchasing a new home, we can quickly set up a Land Trust so your name never appears on title, but you are still the owner!

 

1. Privacy!

In today’s information age, anyone with an internet connection can look up your ownership of real estate simply by running your name through databases. Privacy is extremely important to most people who don’t want others to know what they own. For example, if you own several properties within a city that has strict code enforcement, you could end up being hauled into court for too many violations, even minor ones. Having your real estate titled in land trusts makes it difficult for city code enforcement to find who the owner is, since the trust agreement is not a public record for everyone to see. You will need a person not in your family to be the trustee of the Land Trust that will privately take directions from you (the grantor). However, in public records, your name is not listed on the property. You should set up a post office box, making it even the address on your driver’s license, for property tax statements to be received, and any other mail that you get.

NOTE: The only problem with this situation is if you have a mortgage on the property you are trying to shield your name as the owner from public view. If they do a deep enough background check on you or the address the mortgage may show up and then they will know you are paying the mortgage.

A land trust is a revocable or irrevocable, living trust used specifically for holding title to real estate. Each property is titled in a separate trust, affording maximum privacy and protection. The best way to set up an asset protection value with a Land Trust is to have a multiply owed LLC as the beneficiary (Spouse are considered one person so you need spouse plus one… even if it is 5% ownership in LLC. In California with multiple owners of an LLC prevents a court from forcing the sale of the LLC asset. The plaintiff can only file a charging order on the LLC, and this can prevent the collection of debts.
 

2. Protection from liens

Real estate titled in a trust’s name is not subject to liens against the beneficiary of the trust. For example, if you are dealing with a seller in foreclosure, a judgment holder or the IRS can file a claim against the property in the name of the seller. If the property is titled into trust, the personal judgments or liens of the seller will not attach to the property.
 

3. Protection from title claims

If you sign a warranty deed in your own name, you are subject to potential title claims against you if there is a problem with the title to the property. For example, a lien filed without your knowledge could result in liability against you, even if you purchased title insurance. A land trust in your place as the seller will protect you personally against many types of title claims because the claim will be limited to the trust. If the trust already sold the property, it has no assets and thus limits your exposure to title claims.
 

4. Discouraging Litigation

Let’s face it! People tend to only sue others who appear to have money… “Deep Pockets”!

Attorneys who work on contingency are only likely to take cases that they can not only win but collect since their fee is based on the collection. If your properties are hard to find, you will appear “broke” and less worth of suing. Even if a potential plaintiff thinks you have assets, the difficult prospect of finding and attaching these assets will discourage litigation against you. If a preliminary search of your assets does not show that you own anything valuable, a Plaintiff’s Attorney will likely not proceed on a Contingency Basis are require the Plaintiff to pay them hourly. This can discourage frivolous lawsuits.

We recommend one Land Trust for each Property you own with different Trustees for each one. (On public record… only manager that must deal with property as beneficiary instruct them to do!)
 

5. Protection from HOA Claims

When you take title to a property in a homeowner’s association (HOA), you become personally liable for all dues and assessments. This means if you buy a condo in your own name and the association assesses an amount due, they can place a lien on the property and/or sue you PERSONALLY for the obligation! Don’t take the title in your name in an HOA, but instead take the title in a land trust so that the trust itself (and thus the property) will be the sole recourse for the homeowner’s association’s debts. This only works if you do not have a mortgage!
 

6. Making contracts assignable

The ownership of a land trust (called the “beneficial interest”) is assignable, like the way stock in a corporation is assignable. Once the property is in the title in trust, the beneficiary of the trust can be changed without changing the title to the property. This can be very advantageous in the case of a real estate contract that is non-assignable, such as in the case of a bank-owned or HUD property. Instead of making your offer in your own name, make the offer in the name of a land trust, then assign your interest in the land trust to a third party.
 

7. Making Loans “Assumable”

A non-assumable loan can become effectively assumed by using a land trust. The seller transfers the title into a land trust, with himself as the beneficiary. This transfer does not trigger the due-on-sale clause of the mortgage. After the fact, he transfers his beneficial interest to you. This latter transaction could trigger the due-on-sale, but such a transfer does not come to the attention of the lender because it is not recorded anywhere in public records. This effectively makes a non-assumable loan “assumable”. As you can see there are many creative and effective uses for the land trust, limited only by your imagination!

After a thorough review of the best strategies for your situation and our fees for the scope of work, we will structure a comprehensive Protection Plan created specifically to protect your hard-earned assets.

Our Law Firm is centrally located in Burbank (Southern California); however, our Land Trust Lawyer, Joseph McHugh serves many clients throughout the state of California via phone calls, email, or FedEx.

The fastest way to contact us is to call (818) 241-4238 to schedule a phone consultation. Or you can submit this form to request a phone consultation to determine if our services meet your needs.