Title Holding Trust - Checklist, Docs, Agreements

Tax, Legal Issues, Contracts, Self-Directed IRA 46.0K Posts 6.9K Discussions

We are exploring the options of buying all our properties through a Title Holding Trust, or individual THT for each property. Curious if anyone has a complete checklist, doc templates, etc. for us to review. We will eventually most likely use an attorney to set this up, but would like templates to review for our own knowledge and possibly save us costs from drafting them from scratch. We are looking for the following:

- simple land trust

- beneficiary agreement

- assignment of beneficial interest

- occupancy agreement

- any relevant addendums/riders specific and unique to the particular transaction of "Lease Options" from the Trust to a potential end buyer.

- Recommendation on non interested third parties that act as Trustees. Would prefer them to be a corporate structure. We also do NOT want any recommendations to anyone YOU haven't used before.

Any tips, tricks, links, directions would be good. Would love to network with those currently utilizing these strategies for their Lease Option purchases.

We've heard the following people have great documentation, and knowledge. Anyone used the following and/or care to share the docs you have?

- Randy Hughes (http://www.realestateforprofit.com/landtrusts.aspx)

- Dawn Rickabaugh (http://notequeen.com/cost-of-the-title-holding-land-trust-transfer-system/)

Thanks guys for your help!

Is buying in a THT that much of a hidden concept that no one can provide these? OR?

Anyone?

It's crazy to me how many people have viewed this post, and no one can answer this? Beyond BP? I think so....Sad!

CAN I JUST GET A "I HAVE FLIPPED PROPERTIES OR NOTES USING A TITLE HOLDING TRUST"? ANYONE?

@Matt Yates - I think that those people who may be in the know and perhaps missed the post due to the holidays might have been turned off by the third and last post you made . . .

Perhaps you can simplify your questions for everyone?

Seems like you want people to give you everything they have on the topic. Why not start smaller and instead of asking for the whole shebang, ask for smaller pieces at a time....

And please keep in mind -- POSTING IN ALL CAPS is not only shouting, which I'm guessing you know, but it is also considered very rude. Please refrain from doing so here. Thanks!

Quick note -- using the site's search can yield wonderful results. You mentioned some people in your first post. I know that Randy Hughes is here on the site . . . perhaps you can connect with him directly via colleague request.

Good luck.

Medium fbprofileJoshua Dorkin, BiggerPockets | http://www.biggerpockets.com

Just found this thread.
I have used and closed many transactions using a simple land trust.
You will need the following:
Trust certification - I can send you a sample of this.
Trust Declaration - which is basically the legal stuff for the trust, similar to an operating agreement for a corporation/LLC - I can not give you mine as it contains proprietary info and I am not allowed to share it, however, any competant RE ttorney should already have one or could easily draft one.
Notice of Termination of Trustee - I can send you a sample
Termination of Trustee - I can send you a sample
Successor Trustee Acceptance - I can provide sample
Successor Trustee Letter - I can provide sample

I would recommend you use someone you trust to be your trustee (after all, "trustee" does have the word "trust" in it!) Kidding aside, be careful.

A trust provides zero liability protection so I would suggest using it along with an entity or overly adequate insurance umbrellas.

I have never done a lease option so I have never used a land trust for such purposes, I have ONLY used them for acquisitions of REO deals for wholesaling and rehab flipping. With REO and short sales, you may not assign the contract per bank addendums, thus, the land trust is a cirumvention of that language.

Medium be logoWill Barnard, Barnard Enterprises, Inc. | http://www.barnardenterprises.com

Joshua I do understand and never put two and two together on the holidays. You are right I could have cut this down a bit, but figured the person I would want to be speak with would have the whole shebang anyways.

Will, thanks my friend and appreciate you sharing. I am looking for those templates and planned on running everything by our attorneys, but its always good to see what other experienced investors are doing.

Will have you ever work with Bill Exeter with Exeter1031? He offers these Trustee services and will create the Title Holding Trust agreements as part of his services.

Just shot you that email. Looking forward to hearing your thoughts.

Regards,

Matt Y

@Joshua Dorkin I have already contacted them, and spoken to Bill. Was just curious if @Will Barnard had any experience with him personally. Friendly checking up ;)

Hi Matt,

I just noticed this post thanks to Joshua post. I would be happy to answer any Title Holding Trust (Land Trust) questions, but can't provide sample documents.

Medium exeter 1031 clr cntr bBill Exeter, Exeter 1031 Exchange Services, LLC | [email protected] | (619) 239‑3091 | http://www.exeterco.com

Bill Exeter is the best with Title Holding Trusts (Land Trusts), especially in CA.

Seller Financing with title holding trusts can be learned from http://notequeen.com/category/land-trusts/

Brian

Great to see people connecting on this thread. Way to bring them together josh!

Medium rothwell gornt logo smallRobert Adams, The Adams Team at Rothwell Gornt Co. | [email protected] | 702‑349‑9175 | http://www.LVrealestateHELP.com | NV Agent # 62827, MA Agent # 9530304 , RI Agent # 18138

I too am contemplating using a Land Trust in conjunction with doing sandwich Lease Options. I've been doing some research about the pitfalls of LO and have read that there are 2 things one could do to overcome them:

1. A good way to protect the deed/title in case the owner gets in creditor trouble is to have it transferred into a Land Trust when you make the deal with the Seller. The seller/owner is granted the beneficial interest to the trust. Then when you're ready to buy, the beneficial interest can be changed to your "entity" or your buyer's name. Is this a good approach, and who should be the trustee? Could the attorney setting all this up be the trustee?

2. I've also read that to protect yourself from the Seller backing out (and leaving you stuck with a Tenant/Buyer that want to close) you could have the Seller execute a Deed transferring the property to you/entity, and putting it in escrow. That way if you fulfill the terms of the agreement, the attorney can finish the transaction in spite of the seller.

Has anyone used these tactics successfully? Any feedback/thoughts/suggestions are greatly appreciated.

@Matt Yates I suggest that you contact any attorney licensed to practice law in the state where the property is located. Believe me, its a lot cheaper to hire an attorney and do it right, than to do it yourself and end up paying big bucks later!

Just for your information, here is a Texas attorney's article on Land Trusts: Texas Land Trusts This article might have some helpful information.

Matt, I've recently been doing my share of reading on land trusts. I hope I can help a few others with the little bit I’ve learned. Chicago Title’s Land Trust FORMS PAGE page might be your best source to freely view a bunch of examples.

Thus far I’m persuaded all four of these guys are competent... Mark Warda, Anderson Business Advisors (Clint Coons), Randy Hughes and LoneStarLandLaw.

I’m in the middle of reading Warda’s Land Trusts for Privacy & Profit right now. It’s loaded with form templates and he sells them on disc for something like $40-$50. He also offers corporate trustee service out of Florida but I don’t know if he’s bonded & insured (thus far I believe FL is the only state that doesn’t require it).

Coons and his team have do and outstanding job of publicizing their service out of NV that provides corporate trustee service and you can read his great blog posts on land trusts on & off BP. The BP commentary on THIS BLOG POST in particular is outstanding. I’m in the middle of reading Coons Asset Protection book right now.It seems his value proposition is highest from the standpoint of him being teamed up with the guys formerly under BossOffice for comprehensive asset protection/tax planning.I haven’t seen that they make available any of their templates.

Lastly, Randy Hughes sells his info packages from his site that look to be just as comprehensive as Warda’s for $400-$700. I found a discount code “LT” somewhere on his site that discounts the $700 non-download package by $250.He has a forum I’ve yet to checkout HERE. Hughes doesn’t provide corporate trustee service. I’ve read in a couple places he likes Virginia's statute.

My personal biases are that I’m a cheapskate want to learn/put together as much as I can before I have to pay the costly billable hours to a specialist lawyer. I plan on doing a lot of them and don’t want to overspend on a corporate/lawyer trustee if ROI isn't there.

From everything I’ve read, the effective and practical use of title holding trusts is mostly a learning curve because just like LLCs or IRAs missteps in implementation can invalid its purpose especially since statutes and case law are STATE BY STATE. Also see HERE & HERE

The more literate I am on this stuff, the better I sleep and night and the more confident I’ll be in communicating its use to my sellers etc.

Like Will Barnard I intend to use a non-corporate even non-attorney confidant as recorded trustee of my trusts for now. Doing so I’ve had to learn what’s necessary for my states…E.G. the duties necessary of a trustee and delegation to “agents” for a valid active trust. I’ve also had to learn how to avoid “doctrine of merger” by adding oneself as nominee co-trustee AFTER the deed of trust gets recorded.

I may very well end up using local or out of state attorney’s as the years roll on…but cannot presently justify Warda’s FEE SCHEDULE For those of you that have used Anderson Business, LoneStar, Exeter, or NOTEQUEEN’S service I’d love to hear the community’s feedback regarding their cost/value provided?

@John T. and @Daniel L. thanks for sharing some of you knowledge and links.

I always use Land Trusts for my real estate. The power of the Land Trust is incredible. Randy Hughes has a good course especially good for the buy and hold investor, but I've taken it beyond in my rehab to resell business and wholesaling.

These are the my favorite reasons:

  1. No need for double closings, merely sell the beneficial interest
  2. No need to foreign file your entity in different states as the trust is a pass-through entity.
  3. Anonymity.
  4. Save money on transfer fees.
  5. No cost to setup a Land Trust

The list goes on and on and on.

Medium rrlogoJean Norton, Rehabbing Remotely | [email protected] | http://jeannorton.com

Originally posted by @Matt Yates :

We are exploring the options of buying all our properties through a Title Holding Trust, or individual THT for each property. Curious if anyone has a complete checklist, doc templates, etc. for us to review. We will eventually most likely use an attorney to set this up, but would like templates to review for our own knowledge and possibly save us costs from drafting them from scratch. We are looking for the following:

- simple land trust

- beneficiary agreement

- assignment of beneficial interest

- occupancy agreement

- any relevant addendums/riders specific and unique to the particular transaction of "Lease Options" from the Trust to a potential end buyer.

- Recommendation on non interested third parties that act as Trustees. Would prefer them to be a corporate structure. We also do NOT want any recommendations to anyone YOU haven't used before.

Any tips, tricks, links, directions would be good. Would love to network with those currently utilizing these strategies for their Lease Option purchases.

We've heard the following people have great documentation, and knowledge. Anyone used the following and/or care to share the docs you have?

- Randy Hughes (http://www.realestateforprofit.com/landtrusts.aspx)

- Dawn Rickabaugh (http://notequeen.com/cost-of-the-title-holding-land-trust-transfer-system/)

Thanks guys for your help!

 Great post.  I was thinking about that very issue myself.  Looking for some specific resources regarding Title Holding Trusts and came across this article.  

I have questions about the title holding trust

1) When a deed is held in this particular trust, does the trust document need to be recorded at the registry?

2) How would the trustor keep their anonymity when they grant the deed to the trustee. Would the deed have to be recorded?

3) Who normally is the trustee for a title holding trust?

On a separate note @Michael Yin if your deed is held in escrow, what would happen if the seller ( without your knowledge ) created another deed for another buyer, and that buyer recorded their deed at the recorder's office?

978 994 9369 | http://www.bostoncityproperties.com | MA Agent # 9550548

@Rich Hupper , I'm not an expert in trusts so this is not advice, just something to help point you in the right direction (disclaimer).

My understanding is:

1. The trust document is not recorded, only the deed is.  The trust document indicates who the beneficiary.  The deed only reveals who the trustee is.

2. The deed is recorded but in the trustee's name.  The beneficiary remains anonymous to the world because the trust document is not recorded.  The trustee cannot reveal who the beneficiary or any other parties to the trust are unless ordered to do so by the court, etc.

3. The above assumes that the trustee is a separate person from the trustor or beneficiary.  This can be a close friend/relative whom the beneficiary and trustor trust or an attorney, etc.

Hopefully others can chime in to add to or correct anything stated above.

Sergey Tkachev, SMT Group | http://tinyurl.com/RESummit2