How Can Land Trusts Be Used in an Estate Plan?

 Posted on December 09,2022 in Estate Planning

If you own real estate, there are a variety of concerns that you may need to address when creating an estate plan. You may be looking to ensure that ownership of real estate property can be transferred to others with minimal complications or expenses, or you may wish to protect your privacy and maintain anonymity. Land trusts can be an effective tool for doing so. These trusts can help you protect your property and keep it out of probate. They can also help you manage your assets, minimize taxes, and prepare for the future. By understanding how land trusts work, you can determine the best ways to use them as part of a comprehensive estate plan.

What Is a Land Trust? 

A land trust is a legal document that holds title to real estate for the benefit of another person or entity. The trust is managed by a trustee, who will hold the legal title to the property on behalf of the beneficiary or beneficiaries (the people who will ultimately receive the property). When you create a land trust, you will transfer ownership of your property from yourself to the trustee, who will then hold it on your behalf according to the terms and conditions set forth in the trust agreement. 

When Should I Use a Land Trust? 

A land trust can be extremely useful if you have invested in multiple properties and want them all included in one estate plan. You can also use a land trust if you want to transfer ownership of your property without going through probate, which can be lengthy and expensive. You will also be able to maintain anonymity, since the trust will be listed as the owner of the property in any public records, and you may also be able to purchase or sell real estate without publicly disclosing the purchase price. Additionally, setting up a land trust can help protect your assets from creditors or lawsuits should something happen to you or any other beneficiaries listed in the document. Finally, using a land trust can help minimize taxes, since only certain types of income will be taxable under this structure. 

How Do I Set Up a Land Trust? 

Creating a land trust requires some legal knowledge and assistance from an attorney who is experienced in both estate planning and real estate law. Your lawyer will need to draft documents such as a deed in trust and a trust agreement that specifies exactly what type of control each beneficiary has over their share of the property. Additionally, there may be certain tax forms that must be filled out depending on where you live and what type of income you receive from the property or properties held in the trust. Once everything is properly set up, a land trust should operate smoothly while allowing you to maintain control over your property. 

Contact Our Roseland Land Trust Lawyer

Land trusts are becoming more popular as an estate planning tool because they provide many advantages over traditional methods such as wills or joint tenancy agreements. By transferring ownership to a trustee and specifying how each beneficiary will receive their share of the assets, a land trust can allow you to maintain control of your property and pass it to other beneficiaries at the appropriate time. At The Sherrod Law Firm, Ltd., our Englewood estate planning attorney has the legal knowledge needed to establish land trusts correctly, and we can help you make sure the assets you own will be preserved for future generations. To learn more about how we can help you create a comprehensive estate plan that addresses real estate property correctly, contact us at 312-321-6910 and set up a free consultation.

Sources:

https://www.investopedia.com/terms/l/land-trust.asp

https://www.annuity.org/retirement/estate-planning/land-trust/

https://smartasset.com/financial-advisor/land-trust