ERRONEOUS LAND TRUST ADVICE – HOW TO SPOT IT CLINT COONS
3. Similarity
“Attorneys are averse to
venturing into uncharted
waters for fear of liability.”
of
Parties
Result
Application of the Merger Doctrine
in
–A
trust will automatically terminate when the
same person serves or becomes both the
sole trustee and the sole beneficiary of a
trust. The trust is ignored and the law views
the beneficiary as the owner of the property
regardless of how title is held.
referred to as “Statute of Uses”. This common law
doctrine will defeat most attempts to create a land
These problems can be avoided with proper
drafting of your land trust:
trust unless careful consideration is given to certain
principles when drafting your trust document. Three
common errors are as follows:
1. Create an Active Trust
– Give the trustee
of your land trust some duties over the assets
1. Dry Trust is Created
– If a land trust is not
trustee has no or limited powers should only
properly funded with real estate the trust will
not hold any assets. Thus, the trust becomes
null and void and will not be recognized.
2. Limited Trustee Duties Create a Passive
Trust
of the trust. An Illinois style trust, wherein the
– A trustee must be given active duties to
be used in Illinois. The trustee of your land
trust should have the power to collect rents,
contract for repairs, pay taxes, and pay for
expenses.
2. Use More Than One Individual
– A single
perform with respect to the trust assets
investor should never create a land trust
otherwise the trust will fail.
States such as
wherein he holds both the beneficiary and
Illinois, have a F?FVB??BG'W7B7FGWFW2v?F???G'W7FVR?6?F????6??v?R??fW7F?"6??V?@??F?R7V6?f?2W'?6RF??V??g?F?R( ?7FGWFR?`???v?2???BF??&B'G?F?6W'fR2F?P??W6W>( ????F?W6R7FFW2?G'W7FVR6?&P?????F??G'W7FVR?gFW"F?RG'W7B?2gV?FVB?@?????FVBf?"F?F?R???F??rW'?6W2?????F?R&V?Vf?6????FW&W7B?276?v?VBF???FV@??v?F??WB???vW"?fW"F?RG'W7B76WG2??????&??G?6?????F?RF??&B'G?G'W7FVP???vW'2&R&W6W'fVBF?F?R&V?Vf?6?&?W2?6??V?B&W6?v??W??&W6?v?F???F?R??fW7F? ???F??2?2v????7BGF?&?W?2vWB?Bw&??rv?V?v???&V6??RF?RG'W7FVR??b?'&?VB6?W?R?0??F?67W76??rF?RW6R?b??BG'W7G2?F?W???7&VF??r??BG'W7B???R7?W6Rv???6W'fR0????6?'&V7F?77V?RF??2?2F?RG?R?bG'W7B??P??F?RG'W7FVR?B&?F?6?&R&V?Vf?6?&?W2?&R7&VF??r??