Putting Rentals In Trust

8 Replies

You should speak directly to your Estate Attorney about this change but it is not difficult. Essentially you're putting everything under the trust so it will be rerecorded and you can identify the Trustee Member to have power over the Trust. 

What is the benefit doing this for you? What are you looking to gain?

A Land Trust is a type of trust that is created by a trust agreement for the sole purpose of owning a specific piece of property. The trust agreement is a private document and will not be recorded or filed in the public records. There are three parties involved in a land trust: the grantor, trustee and beneficiary. A Warranty Deed is used, as opposed to a Quit Claim Deed, in order for the investor to maintain Title Insurance. Most Title Insurance companies will cease to offer insurance if a Quit Claim Deed is used for the transfer as the Quit Claim Deed offers no warranties as to clean title.

Every county requires a Warranty Deed to be signed by the Grantor (the investor.) The fees to record a Warranty Deed will vary from county to county. Most counties require additional ancillary documents/forms to be sent in with the Warranty Deed in order for a successful recordation. The documents/forms will vary county by county. The required documents/forms can be found on the website maintained by the County Clerk (Registry of Deeds, Recorder of Deeds, Clerk of Court, etc). Examples include: Transfer affidavits, Preliminary Change of Ownership Reports, Transfer Tax affidavits, etc.

    This is the general process to create a land trust and transfer a property, but as you can see it varies significantly depending on where the property is. Most places are pretty easy, but if you find yourself in a frustrating county (Chicago is a nightmare every time...) then just buckle in and push through. Or just find a good attorney to tackle the project for you. Either way, just ensure you created all the required documents  and that they are recorded correctly. If you want to get fancy and remove your name from public record to provide more privacy you would need an attorney's assistance, but some investors find it a valuable investment.

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      Originally posted by @Scott Smith:

      Every county requires a Warranty Deed to be signed by the Grantor (the investor.) 

      Hi Scott,

      With instant access to Recorded Deeds on the internet, this seems like a hole in the privacy strategy?

      I can see the whole Deed in less than 1 minute with a few key strokes, signature included.

      My wife and I moved our property (personal and business LLC) into a trust so that our sons can make decisions easily and quickly by avoiding probate. I think we paid around $1,600 for an estate attorney to draft our will establish the trust.

      When my mom passed a few years ago, her assets were in a trust or had my name on the account and it was so easy to deal with.  However, her 1998 Buick sedan worth $1,000 took 4 months and an attorney to clear probate. It would have been easier to leave it parked on the street with the keys in it lol. 

      Originally posted by @Scott Mac:
      Originally posted by @Scott Smith:

      Every county requires a Warranty Deed to be signed by the Grantor (the investor.) 

      Hi Scott,

      With instant access to Recorded Deeds on the internet, this seems like a hole in the privacy strategy?

      I can see the whole Deed in less than 1 minute with a few key strokes, signature included.


      The grantor is the person selling the property. So if the investor signs as the grantor, it shows that the investor no longer owns the property. So it would make it seem even more unlikely that you actually own the property, rather than attaching you to it.

      @Scott Smith Our family has a grantor trust where the 12 rental properties are. We live in Colorado Springs. The grantor my Dad would like to retire and my sister and I are trustees. My sister is not interested in real estate and I am. I would like to have my Dad the grantor owner finance the properties and upon his death I would buy my sister out. Since the properties were put into this living trust how could we go about making a deal like this ? Thank you.