Title Holding Trust (AKA Land Trust), Explained

Land trust or title holding trusts are used for anonymity, but they don't actually provide protection from a lawsuit.

An LLC is required to provide that protection.

A trust is made of three parts. You have a grantor of the trust, a trustee, and a beneficiary. A trustee is used to actually control the property of the trust and manage the trust itself. The beneficiary is the person entitled to all the benefits of the trust, all the money flowing from the trust.

Now in some circumstances you'll be required to be able to disclose who the trustee of a trust is. In these cases, you can use a nominee trustee. This is a person listed on the trust document who has defined powers. These powers might include filing a tax return on behalf of the trust with the comptroller or the tax agency for the state or perhaps just for filing purposes of the deed.

The nominee trustee can be limited to have no other powers inside of the trust besides those specified.

Anybody that's looking to actually alienate a property, sell it or dispose of the trust asset will want to look at the trust agreement before they know that they're going to buy an asset from your trust. In that agreement they'll see that the nominee trustee doesn't have those powers.

So you don't have to worry about somebody running away with your property and the person that will have those powers will be laid out in that document. And that person can be you.


Last Updated: 
March 19, 2018

Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.

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