Understanding the Use of California Land Trusts

When it comes to land trusts, California is unique in that it doesn’t put them under the two typical legal categories:

  1. Case Law - Laws based on the results of previous cases.
  2. Statute Law - Laws established by specific statutes.

However, the state does acknowledge the validity of land trusts. California land trust laws aren’t  as specific as other states; instead they are based on the more general trust laws under the California Probate Code. We don’t expect you to know the in’s and out’s of probate code, but there are some key facts you do need to know.

Golden State residents, read on. These three facts are key to understanding land trusts and California and how the state rules can benefit you.

Three Key California Land Trust Facts

Fact 1: A California Land Trust Hides Ownership

Anonymous land ownership isn’t just for big time land developers or celebrities, although Hollywood is full of stars who’d rather keep their property private. Average citizens can take a practical step in asset protection by hiding their property ownership in a land trust. Think of a land trust as a vehicle where you can park real estate without anyone connecting that real estate to your name. In case of a lawsuit, your property becomes harder to go after since your name isn’t tied to it. Plus, hiding property ownership is prudent as it helps you maintain a low profile when it comes to your investments and wealth.

Fact 2: A California Land Trust Provides an Easier Probate Process

With a land trust, property is transferred outside of the legal process to the owner’s heirs after death. This can avoid a costly and time consuming probate process.

Fact 3: A California Land Trust isn’t Subject to Dower Rights

This is another area where California is unique. California land trusts aren’t subject to community property or dower rights. However, it is good to know what these terms are since they deal with the division of property during a divorce.

  • Community Property -  In a state like California which acknowledges community property, all marital property falls under equal ownership of spouses. Marital property refers to all property (real estate and personal) accumulated during the marriage using income derived during the marriage.
  • Dower Rights -  Dower rights give a spouse ⅓ life estate interest in his/her spouse's property. These rights are only specified in a handful of states such as Ohio.

Be sre and check out our article, Community Property: What Investors Need To Know.

Protect Yourself

California residents won’t have to worry about getter dower rights waived when transferring property. However, residents shouldn’t make assumptions about how property will be divided during a divorce. Consult with a legal professional. Our team has helped numerous clients protect their personal and professional assets. Call us at 512.757.399 for a consultation.

Last Updated: 
April 7, 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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