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WHAT IS A LAND TRUST?
A Land Trust is used to simplify the transference of real estate upon one’s death. There are three important elements to a Land Trust: (1) The beneficial owner (the current owner(s) of the property); (2) the holder of the power of direction (the party with the power to direct the trustee to act); and (3) the contingent beneficiary (the party who will inherit the property upon the owner’s death).
The person who has the power of direction is usually the owner of the property. This person can direct the trustee in all matters of operation regarding the real estate. Typically, the beneficial interest and the power of direction remain with the original owner.
The contingent beneficiary is named by the beneficiary of the Land Trust and will inherit the real estate after the original beneficiary passes away. This transfer will happen outside the court monitored probate process.
The contingent beneficiary can be a single individual or any entity that can own real estate. Although the beneficiary decides who the contingent beneficiary will be at the onset of the Land Trust, the beneficiary has the right to revoke or amend the contingent beneficiary at any time.
A beneficiary does not need to worry about losing beneficial interest or control over their real estate during the span of their life, a contingent beneficiary does not inherit any interest in the property until the death of the original beneficiary.
THE BENEFITS OF LAND TRUSTS:
• Avoid probate: Probate court can be a long, tedious and costly process that many of us hope to avoid. Land Trusts provide an easy and private transfer of ownership on death without the time and expense of a court proceeding.
• Protect your physical safety: If your real estate is purchased under a Chicago Title Land Trust number, your home address will not be linked to your name. That anonymity makes it harder for any unwanted visitors to locate you. If you work with the public or are in the public eye, this is a simple and important safety measure.
• Keep your finances private: Although mortgages are a matter of public record, your name does not have to be linked to your mortgage. Land Trusts help maintain your anonymity on recorded financial documents associated with the purchase of your home.
• Maintain financial safety: Internet fraudsters are very much a thing of the present. By putting together various pieces of your financial and personal information obtained via internet searches, fraudsters can steal your identity. Land Trusts provide you with the ability to protect your financial information and not fall victim to identity theft.
• Prevent litigation: Real Estate is one of the largest assets that a person owns. By placing your property into a Land Trust, you shield yourself from asset searches, thus decreasing your chances of litigation. Furthermore, even if a judgment is ever entered against you, that judgment will not automatically attach to your real estate. Collection attorneys will need to take post judgment steps to ensure that the judgment attaches. This means that you may be able to sell or buy property even if there are judgments against you.
• Maximize your bargaining power: Land Trusts allow buyers to make confidential offers to purchase property. Confidential offers can help buyers stay anonymous, maintain negotiating leverage, and ultimately save money.
Often times, African Americans are adamant about using a Will instead of a Land Trust. The reasoning behind that is because many people simply don’t know what a Land Trust is, and the many advantages of placing their property in a Land Trust. We challenge you to educate yourself on all your options and let us help you make the right choice for you. Some additional Land Trust advantages are listed below:
• Avoiding Probate: Upon your passing your property immediately transfers to your named contingent beneficiary. This allows you to surpass the long, emotional, and costly process of probate court.
• Avoiding Liens: Any leans or judgments entered against you do not automatically attach to your property. This means you may be able to sell or buy real estate even if there are judgments entered against you.
HOW DO I SET UP A LAND TRUST?
1. We will ask you to give us some basic information (i.e. property address, phone number, market value of the property) so that we can reserve a Land Trust number on your behalf.
2. We will draft the Trust Agreement, a Deed in Trust and a Power of Direction and ask that it be executed by all beneficiaries and parties with power of direction. The Trust Agreement, along with a copy of a government-issued picture identification for each beneficiary and power of direction holder, will then be submitted to Chicago Title Land Trust Company for acceptance. When you return the signed deed and endorsement to us, we will record it with your county’s recorder of deeds.
To schedule a personal consultation with The Law Offices of Theodore London, please feel free to contact us at (773) 721-3333 or visit us at our office located at 1718 East 87″‘ Street.Chicago, Illinois 60617.