Image by Gerd Altmann from Pixabay
lMYTH : Land trusts must have incorporation papers and the State notified
MYTH : Can I buy the beneficial interest in a LT without buying title insurance
TRUTH : Wrong again ! Land trusts are not registered like corporations and LLCs on a statebystate basis . In fact , they are not registered at all ... anywhere ! This is one of the many reasons to start your estate planning with a land trust for each property you buy .
MYTH : I was told that my land trust must open an account at a local bank
TRUTH : Not true . Since land trusts are " passthrough " entities in the eyes of the IRS , you do not need a separate bank account for each land trust you form . You can set up an account , but it is not required . If you set up an account for your land trust , you will not have a tax ID number to use so you will have to use your own Social Security number . Or , if your LLC is the beneficiary , you might use the tax ID # for your LLC ).
MYTH : It is illegal to hide the ownership of property
TRUTH : I love this one . WRONG ! It is not illegal to hold title to your real estate in a land trust to conceal the ownership ( I call this being private about your business ). The past president of the United States , Barack Obama , owns his home in Chicago , IL in a land trust with his attorney serving as the trustee . If it is good enough for a president , it should be good enough for you !
TRUTH : Yes , you can , but I would not suggest doing this . I would always get a title policy and have the proper " search " done prior to transferring any funds . You want to make sure that the trustee has clear title and there are no unknown liens or judgments against the property . You should also obtain a copy of the trust agreement and make sure the trustee acknowledges EVERYTHING !
This is certainly not a complete list of misconceptions about land trusts , but is enough to digest for now . I will write more on this subject in future articles . Feel free to contact me if you have any specific questions . My number is : 2173551281 . Or , email me at
randy @ mrlandtrust . net
ABOUT RANDY HUGHES
Mr . Land Trust
I encourage you to learn more by going to my FREE online training at www . landtrustwebinar . com / 411 and text
“ reasons ” to 2062032005 for my free booklet , " Reasons to Use a Land Trust . You can also reach me the oldfashioned way by calling me at 2173551281 . ( I actually answer my own phone unlike most other businesses in America today !)
26