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BlogsInvesting in Minnesota Real EstateWhat about Land Trust's

Posted almost 17 years ago

What about Land Trust's

What's the deal with Land Trust's? A short time ago it was recommended that every property be purchased in a Land Trust. Now it seems we don't have any title insurance carriers willing to underwrite a deed in trust. Try to ask the "Guru's" who sold you the concept and it's another fee to get a response. What's everybody doing, are ytou using Land Trusts, LLC's or both?

Comments (7)

  1. The major use of a land trust from my experience is to attempt to disguise the sale of a property that has debt placed against it. This still triggers the due on sale clause, but it really makes it harder to recognize. The only other useful purpose that I can see for using trusts is to disguise who the beneficiary for the property is. If you are simultaneously the trustee and the beneficiary your name will still show up on the public records for the property. You have to give up control as the trustee to get your name off of the records.

    Bryan Hancock, almost 16 years ago


  2. Hi, using a revocable trust agreement, set up with customary estate planning recitals should never be a problem. A title company may shy away from a trust having a business entity named as beneficiary or administrator as that could be an indication of investment operations. A number of properties may be held in one trust and sold from that entity. I have read about this issue and it seems to be a regional/local issue as the perception of local title plants varies. Using a trust for estate planning will not be an issue, even if you have numeious transactions. Good Luck, Bill

    Bill Gulley, over 16 years ago


  3. Removing Land from Land Trust will not work. Title companies are having issues with land trusts because many investors use land trusts to skim equity from a property, hiding ownership, or trying to get around seasoning issues. Granted there many legitimate uses for land trusts, but the title companies cannot afford to take risks. When your main function is to provide clear titles, it is difficult to employ the necessary resources to clarify these activities. Instead, it much easier to for them to do away with issuing title insurance on them altogether.

    Scott Hubbard, over 16 years ago


  4. Hey Dick, Why that is a great idea! Thanks.

    Susan McCormick, over 16 years ago


  5. It's interesting that this post popped back up again, I was just talking to my attormey about this today and his recommendation was to simply remove the word "Land" from your trust documents. A Trust is a valid means of holding property but it seems it's just the wording that title companies and banks are having issues with.

    Dick Rosen, over 16 years ago


  6. google landtrust, check with your local library or book store. I have just been learning about them myself, and think I should put my personal house in one. ???

    Susan McCormick, over 16 years ago


  7. I to am from Minnesota, and wondering all of the same things! Many people do not know very much about Land Trusts, and I'm trying to find out as much as I can.

    Sierrah Fanth, over 16 years ago