Land Trust to LLC- Asset Protection

3 Replies

@Camille T. good one. We have been putting our properties in separate land trust for 20 years. I liked the benefits described here:

Advantages of

Land Trusts

1) The transfer of

property is much

easier than a LLC

2) Offers privacy in

terms of transferring

interests

3) Offers privacy of

ownership

4) Avoids transfer taxes

5) Simplifies property

transfers

However, I would add a couple of others:

6) A land trust does not require a EIN or tax return. This allows you to separate your assets with different legal titles without needing a bank account/tax return for each property.

7) Until your taxes are filed, it's possible to transfer benifitial interest from one inity to another by simply modifying your books. This strategy may get your property from an SCorp to a LLC internally or vise versa. The holds in a LLC and flips in SCorp makes sense for tax planning. However, when a flip becomes a hold, the land trust allows flexibility for the first year or so of ownership.

8) SC owner occupied tax rate can be acheived with land trust but not with an LLC

9) Land trust are easy to form and inexpensive. Simply make your buyer a new land trust with a offer to purchase and land trust is title holder at close. Your attorney could create a land trust agreement once and modify dates, address, benifiary, and trustee for as many as you need.

@Camille T. Anderson does have great information.  We also have some articles right here on BP that may help.  https://www.biggerpockets.com/blog/anonymous-trusts/ This article presents an opinion on using the Trusts for anonymity and asset protection. 

If anyone has any questions please feel free to post a reply for DM.

- Scott

I just attended an Anderson Business Advisors workshop. They outlined the strategy of formulating a Land Trust for investment property ownership for asset protection strategy. You would have put title of the property into a Land Trust, make the beneficiary of the Land Trust to be a Wyoming LLC, and then finally, make your Living Trust be the beneficiary to the LLC.