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Buying Property with a Land Trust - YouTube
Channel: Clint Coons Esq. | Real Estate Asset Protection
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- Hi, Clint Coons here with
Anderson Business Advisors.
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And in this segment,
we're going to discuss
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purchasing real estate with a land trust.
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Now, for those of you
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that aren't familiar with land trust,
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there's two different
ways you can set it up.
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You can set it up with
yourself as the trustee,
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or you can use what is referred
to as a nominee trustee.
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That is someone who
will serve in your place
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for the purposes of maybe deeding property
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into the name of the trust
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or actually buying property
in the name of the trust.
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And the whole concept here
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is that you don't want
your name to be on title.
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So if somebody was looking,
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they wouldn't associate
you back to the property.
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That means essentially what we're doing
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is looking for anonymity.
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Now, although anonymity is your friend,
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when it comes to an aggressive attorney,
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it can also be a potential problem for you
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when you're trying to purchase property
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in the name of a trust.
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Because when you go to buy a property
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in the name of a trust, a land trust,
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and you're using a nominee trustee,
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the title companies typically require
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that the trustee is the one
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that signs off on all
of the documentation.
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Now, I know inside of a land trust,
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if you watch my other videos,
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that the beneficiary are the ones
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that have all the control
over the land trust.
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So technically speaking,
it is the beneficiary
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who should be signing off on the trust,
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but it's not the way it works.
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You know, I've done countless
deals with land trusts.
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In fact, watch my other
video on selling property
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with a land trust and I'll recount you
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a story that I currently
have on a property
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I just sold in Hawaii.
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But the fact of the matter is
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is that when you're trying to buy property
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in a land trust and you have
this nominee trustee on there,
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the title company is not
going to read your trust.
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They just make an assumption.
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And this is really one of the
benefits of the land trust
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is that everyone assumes
that it's a living trust
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or some other type of trust,
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and they don't quite get what it is
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that they're working with.
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So they're going to require
the trustee to sign off.
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Therefore herein lies the problem.
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If you're using a nominee trustee,
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and I've done this before for my clients,
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in order for this to work
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then it is the trustee who has to sign off
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on all the paperwork.
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So what I've done before,
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and, you know, mobile
notaries actually come
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out to my office sent
out by the title company
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and I sat down and signed
all of the documentation
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on behalf of the trust.
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If you're using debt it's
probably not going to happen,
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because most trustees will refuse
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to sign off on any debt, of course.
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I know I've been in that position before
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and they've asked that of me.
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So if you're considering
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purchasing property with a land trust,
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then you yourself should be the trustee.
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Now, here's another
option, what you could do.
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And keep in mind there's an asterisk here.
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You could set up your trust,
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so when you set up the trust
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and you're going to
choose who a trustee is,
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what you could do is you
set up your land trust here.
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Maybe instead of naming yourself
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as an individual as a trustee
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you choose an entity
that you own and control,
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like a limited liability company.
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So my trustee over here
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will be an LLC that I've set up.
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Preferably this would be
one that has anonymity.
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Maybe it's a Wyoming limited
liability company, Nevada.
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Well, I show and use
Nevada because in Nevada
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to obtain anonymity you have
to have a nominee there.
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So I'd do it with a newly formed Wyoming
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or possibly Delaware
limited liability company
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to run this strategy.
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So the LLC is set up as
the trustee of your trust.
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The beneficiary, bene, is you.
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So if you've set up this LLC
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and you're the manager of the
limited liability company,
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what's going to happen when
you go to signing then,
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you as the manager
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will sign on behalf of the LLC,
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which is the trustee of the land trust.
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So now title will actually be taken
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in the name of this land trust right here.
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And on title, if the name of your LLC,
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let's say it was Big Profits,
so title would be as follows:
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Big Profits LLC
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Trustee
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of 1632 Land Trust,
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dated, and of course, whatever date it was
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that you set this up.
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So that's how the title would be taken.
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And so what occurs now
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is that your name's not
actually listed there.
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It's the LLC that will
be listed as the trustee.
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And that way you're in complete control
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of the entire transaction.
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You don't have to use an
Omni trustee like myself.
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Now, what's the asterisk?
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What's that little caveat?
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Well, technically speaking,
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and again, it's not going to matter
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because again, title companies,
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they miss this stuff all the time.
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In order to be a trustee, you have to be,
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I mean for a company to be a trustee,
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it has to be licensed.
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Now, your company, of
course, is not licensed
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and you're not going to
go through that process.
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So at the end of the day
who's going to report you?
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Well, you're not going to report yourself,
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so I don't really see
that as being a problem.
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But it is a way,
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I mean it is a potential
issue you have to be aware of
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that at a later date someone
could raise the issue.
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Let's say your trust is gettin' sued,
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and they bring up the fact,
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oh, you set up an entity
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that's not even licensed and registered.
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You don't follow the laws of your state.
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I mean, it just a garbage argument
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that an attorney may use
to try to discredit you.
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But it would allow you to
complete this transaction.
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I have clients that have done this
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routinely with their land trust investing,
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and I've seen it work firsthand.
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So just keep that in mind.
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If you want to buy property
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in the name of a land trust
and you want anonymity,
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given the fact that it's
going to be difficult
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or you're going to have to pay someone
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to be your nominee trustee,
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if you want to control the
entire process, do this.
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Set up a Wyoming limited
liability company.
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Make it the trustee of your land trust.
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You're the manager of that Wyoming LLC
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and then you sign on it.
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My name's Clint Coons with
Anderson Business Advisors.
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And in this video we talked
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about how to buy property
with a land trust.
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