Transfer of Property Subject to Land Trust
The transfer of property subject to land trust is a strategy used by investors for asset protection and tax planning. Property held in your own name cannot be protected from liability, and moving it to an LLC allows the lender to accelerate a note. However, the law prohibits lenders from doing the same when the property is moved to a land trust. Once the trust gets the title, the beneficial interest can be moved to an LLC, thus ensuring protection from liability.
Do you have additional questions regarding a transfer of property subject to land trust? Our real estate attorneys are here to assist you throughout the process and answer any questions you may have. Contact a real estate lawyer near you today.
Listed below are all such legal benefits of property held in land trusts:
Property held in an inter-vivos living land trust is virtually impervious to all liability and creditor recovery actions. Even IRS liens against the beneficiary cannot penetrate the protection offered by a land trust. Under the FDIRA (Federal Depository Institutions Regulation Act) law, lenders have limited powers to initiate foreclosure for properties in a land trust. This makes it possible to dispose off the property as a normal sale instead of foreclosure or short sale, even if you are behind. Appointing oneself as the trustee creates a conflict of interest and undermines the privacy and liability strengths of the land trust. The solution is to appoint your attorney or your corporation or LLC as the trustee.
Do you or does someone you know need legal information regarding a transfer of property subject to land trust? Our real estate lawyers are here to help. Contact a real estate attorney in your area today for more information.
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