Lesson 2 Land Trusts – Ease of Transferability
The Ease of Transferability – See Lesson 2 Below
One of the many benefits to using Land Trusts to hold title to real estate is the ability to transfer the beneficial interest easily. Why is this important?
Maybe you do not want the world to know that you have transferred ownership of a property.
Maybe you are providing financing for the new buyer on an installment contract. And, your new buyer wants to avoid paying increased real estate taxes because of a reassessment (as a result of a “sale”).
Or, maybe you do not want to disclose the sales price of your transaction with the new buyer.
Whatever the reason, using a Land Trust will keep your transfer confidential.
The mechanics of a Land Trust transfer are intriguing. Trust Beneficial Shares can be transferred by acceptance of any conveyance by the Trustee. When an entity (i.e. Personal Property Trust, LLC or Corporation) is named as a Beneficiary of a Land Trust, interests in the underlying entity can be transferred at will without the need to make changes in the Land Trust Beneficiary.
This method prevents the Trustee of the Land Trust from having to acknowledge a transfer. This technique can produce extremely low profile property transfers.
Mitch Stephen and Mr. Land Trust like to use Land Trusts to sell property on an installment contract. We sell the Beneficial Interest of the Trust (which is personal property…not real estate) on a contract with monthly payments and a 3-5 year balloon date.
This protects us from default by the buyer. If the buyer defaults we repossess the Beneficial Interest we do not have to foreclose!
This saves a huge amount of money, time and stress for us.
Here’s Lesson 2 – The Land Trust Players
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