REI Wealth Magazine Featuring Paul Finck | Page 51
Despite these obstacles, many historical benefits to
the use of Illinois Land Trusts remain. The principal
attraction of a Land Trust is its ability to confuse and
hide ownership of property and ease of transferability.
Other benefits are:
Other issues to consider when forming an Illinois
Land Trust are:
Note #1: In Illinois when a beneficial interest is assigned
as collateral for a loan, it must be recorded under the
Land Trust and Recordation and Transfer Tax Act. Taxes
need not be paid on collateral transfers, only on all other
transfers. They also want the trust document or a
facsimile to be recorded along with the collateral
assignment.
1. Insulation from liens and judgments (can be seized
or transferred by court order)
2. Ease of transfer of interest (button, button…)
3. Avoidance of probate (allows for one to control the
management and distribution of an estate for
generations)
4. Ease of management by multiple owners
5. Keeping sales price confidential
6. Fracturing interests for multiple owners (don’t
become a general partner… form two trusts)
7. Ease of linkage to other asset protecting entities
8. Confusion/expense to adversaries
9. Flow through tax consequences
10. Limited liability
11. Nonjudicial repossessions of real estate sold on an
installment contract (buyer can’t encumber the fee
simple title)
12. Form 1099 not required for transfers (personal
property is not subject to real estate regulations)
13. Ease of operating across state lines
Note #2: Illinois land trust statute (75 ILCS 435) requires
that holders of the Power of Direction owe fiduciary
duties to holders of the Beneficial Interests. This is not
the case in most other states that have Land Trust
statutes.
Note #3: Effective January 1st, 2011 House Bill 5282 is
now PA 961145. The Act adds language to section 1c of
the Joint tenancy Act (765 ILCS 1005/1c):
Note #4: In Illinois trusts are generally spendthrift trusts
by default.
(735 ILCS 5/21403) (from Ch. 110, par. 21403) Sec.
21403
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