This article continues our discussion of trusts, specifically the real estate trust. First, only a couple of states, like Florida and Illinois, have true “land” trusts. I won’t get into the legal details on how they are different, as that gets complicated. Just know that unless you live in these states you are NOT using a land trust. This gets confusing as many investors attend educational events where these trusts are taught or sold without distinguishing them.

The rest of us have something a little different. We call these trusts real estate trusts, asset holding trusts, property trusts or the like. They are really just simple living trusts but should be created by a knowledgeable attorney. They are designed to hold title for privacy purposes and facilitate transactions such as wholesaling or even selling real estate.

Trusts are a kind of legal entity (like LLC) that can own things. They can be a named buyer on a purchase contract and be named on county land records. Because trusts are not registered with the state, no one will know who owns them. That’s where the privacy comes in. They do, however, have a trustee (think, manager) who will be named on county land records. So be aware of that.

Wholesalers create these trusts to “pass on” the purchase contract. They can be used to buy seller-financed deals with anonymity. And, they can be used to sell real property without a title closing. Finally and importantly, this trust does not provide any asset protection value so they should always be used in conjunction with your LLC or other protection vehicle. While the trust document is quite simple, using it does take some education. Make sure to check out the resources on my website.

Jeffrey S. Breglio, Esq. 
Breglio Law Office and REI Mastery U
www.reimasteryu.com
jeff@bregliolaw.com
(801) 560-2180