Realty411 Magazine Featuring Lee Arnold from Cogo Capital | Page 74
ownership information under penalty of perjury
(wherein you may not plead your 5th amendment
rights), you must disclose all of your assets or risk
being held in contempt of court. If the beneficial
interest holder of the land trust is an entity, you stand
measurably improved chances of protection as such
structures provide outstanding asset protection under
scrutiny.
It is therefore of paramount importance to assign the
beneficial interest of the land trust (at least 24 hours
after transferring title) to another ‘person’, such as a
Limited Liability Company. With recent state supreme
court rulings in Colorado, California and Florida
rendering most singlemember Limited Liability
Companies (LLC) useless as tits on a bull, we recommend
that when possible you form any such singlemember
limited liability companies in states like Nevada,
Wyoming or Delaware whose respective state statutes
offer the same charging order protection to single
member LLC’s afforded to multimember LLC’s.
Placing the beneficial interest holdings of a land
trust into an entity isolates individual liability from an
inside law suit to the LLC and protects LLC assets from
a judgement creditor in the event of an outside law suit
to the individual. Factoring equity value, cash flow and
overall risk of each property should aid in determining
just how many entities require forming to hold the
beneficial interest to your land trusts. We suggest
holding beneficial interest to your land trusts in either a
Nevada, Wyoming or Delaware Limited Liability
Company or (Family) Limited Partnership.
In 2011, Nevada enacted legislation NRS 78.746
which extends Nevada “C” Corporations the same
charging order protection afforded to Limited Liability
Companies and Limited Partnerships. In addition to a
few other minor restrictions, such “C” Corporations
must have at least 2 and no more than 99 shareholders.
Wyoming is considering adding this favorable concept
into its legislation but, at the time of this article, has not
yet done so. Meaning, you can also have a Nevada "C"
Corporation act as the beneficial interest holder to your
land trust as it too affords 'charging order protection'
just like a Limited Liability Company and Limited
Partnership.
Asset Protection Services of America
701 South Carson Street
Suite #200
Carson City, NV 897015239
Office
(775) 4615255
Fax
(775) 4611155
EMail [email protected]
Website www.AssetProtectionServices.com
Insofaras taxes are concerned, a Land Trust is a
private agreement amongst the involved parties and
requires no financial reporting. However the entity which
acts as beneficial interest holder is required to file a tax
return annually either in the form 1065 (Partnership),
1120 ("C" Corporation) or 1120S (“S” Corporation).
For states which require beneficial interest holders of
a Land Trust to be disclosed, Personal Property Trusts can
be used as an effective vehicle “between” the property
(held in the Land Trust) and the ultimate property owner
(ie. Corp, LLC or LP). This use of ‘layering trusts’ can
be a very effective tool in dissuading wouldbe creditors
from attacking you, all without creating unreasonable
costs or sacrifices in time and energy during your real
estate transactions.
Whether owning, renting or holding for longterm
growth, be sure to mitigate unnecessary liabilities for
your business by assigning the beneficial interest
holdings of your land trust to an entity. For more
information on understanding how to hold the beneficial
interest to your Land Trusts, please feel free to contact us
today to schedule your free asset protection consultation.
Sincerely , Jay Butler
Managing Director
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