End-of-life matters are not always easy to think or talk about. However, making plans now, while you are healthy enough to do so, can save your loved ones time, money, and heartache.
The last thing anyone wants to do is lose a loved one and then be immediately buried in legal matters regarding their possession, estate, and finances. If you have been considering end-of-life plans, you may have heard the terms “living trust” or “land trust”. These trusts help ensure your loved ones get the assets or properties you want, while bypassing the complex, often expensive, legal process known as probate. To learn more about these trusts, keep reading.
Understanding The Living Trust
A living trust is one that is created during your lifetime. (As the living trust owner, you are known as the trust settlor or grantor.) A designated trustee manages these living trusts. This trustee holds legal possession of any assets or property that are included in the trust. A trustee has the duty to manage the trust in accordance with the best interests of the beneficiary (or beneficiaries). The trust settlor, or grantor, designates the trustee. Upon the grantor's death, the assets and properties will flow to the beneficiary without having to go through the court system. (This is different from a will, which will need to go through court before it can be distributed to your loved ones.) A living trust can be “irrevocable” or “revocable”.
What Is A Revocable Trust?
With a revocable trust, the granter can appoint himself or herself as the trustee. This allows them to take control of the assets contained in the trust. By doing this, the assets within the trust remain a part of the grantor's estate. This means that, if the value of the estate taxes exceeds that of the estate tax exemption at the time of death, taxes may be owed. In a revocable trust, the granter, acting as the trustee, can amend the trust and the rules at any time. They can freely change beneficiaries at any time. They can also undo the trust at any point as well.
What Is An Irrevocable Trust?
By comparison, in an irrevocable trust, the grantor is not the trustee. Because of this, they end up relinquishing some of the control over their living trust. When a trustee is designated for an irrevocable trust, they become the legal owner of the assets or property within the trust. (This reduces the taxable estate for the granter.) With an irrevocable trust, the named beneficiaries are hard to change.
Understanding The Land Trust
A land trust is a type of living trust. However, unlike a living trust, which holds any type of asset, a land trust can only hold real estate or related assets. This means a land trust can hold physical properties, notes, mortgages, air rights, and other real estate related assets. With a land trust, the property owner is the beneficiary. Because of this, they are able to direct the management of the property. (The trust agreement or deed would dictate the level of control a beneficiary has.) The property owner is also able to retain all rights in regards to the property. This includes the right to freely develop, rent or sell the property contained in the land trust. Land trusts are typically considered to be revocable trusts. As such, they can be amended or terminated at any time.
Benefits of a Land Trust
There are plenty of benefits when you create a land trust. Perhaps the biggest benefit, however, is the ability to hold property anonymously.
How is this possible? The property contained within a land trust is listed as the name of the trust in public records. This helps to hide your full net worth from the public eye. As a result, it can decrease the potential for lawsuits and help with property negotiations.
Whether you personally own it, or your Series Limited Liability Company (LLC) does, a land trust inherently protects your property investments. In addition to this, as a type of living will, a land trust avoids probate court. This means you do not have to go through court in order to manage, rent or sell the property contained within the land trust. (This is because the property contained in the land trust are considered personal property. This is similar to the idea of owning corporation stock.)
Get the Most Out of Your Living Or Land Trust Agreement
It is important that your trust agreement should give you the rights you expect, without hidden clauses. When you designate a reputable “nominee trustee”, such as Royal Legal Solutions, you can rest assured that your trust agreement contains everything you need it to. In fact, when Royal Legal Solutions is designated as your “nominee trustee”, the filing process is not only easier. But it also ends with our firm resigning as the trustee and transferring the land trust back to you as the sole trustee. What does this do for you? In doing this, Royal Legal Solutions will be the trustee of record, protecting your anonymity. You will retain all rights related to the property, including the ability to sell it. (You will need the trust agreement to successfully sell a land trust property.)
Royal Legal Solutions, Your Ideal Living Or Land Trustee
At Royal Legal Solutions, we aim to protect your assets. As your nominee trustee, we ensure your trust agreement reads exactly as you need it to. We do not include hidden clauses that will bar you from your rights to the property. We understand the importance of asset protection and anonymity. If you would like to schedule a consultation with Royal Legal Solutions, please contact us today. After all, you invested in the property and deserve the full benefits a land trust can provide.