Anonymous Property Ownership – Part 1: The Benefits
The land trust is both the most useful and the least known legal device used by real estate investors. In 1963, Florida legislators created the Florida Land Trust Act (F.S. Section 689.071) but land trusts were first invented about 500 years ago for privacy and to eliminate some of the burdens of ownership. Attorney Dena Rogers can help protect your interest in real property with the preparation of a Land Trust.
A land trust can be a beneficial estate planning tool if you own real property. A land trust transfers land to someone else (a trustee) to hold for the real owner (the beneficiary) in order to protect owners of property and keep people’s wealth private. Another advantage is a trustee of a land trust is not held liable.
One of the most famous cases of using a land trust for anonymity is the land purchased for a place considered the most magical place on Earth. Shortly after the Florida Land Trust Act was passed, a number of trustees started buying large tracts of land in central Florida. Eventually, these tracts connected to become what we now know as Disney World. If neighbors would have known that a large enterprise like Disney was buying up the area, they would have demanded must higher prices for their land.
Benefits of Using Land Trusts
One of the most important benefits of the land trust is privacy. When you use a land trust to buy property, no one knows, and it is almost impossible to find out, that you are the owner. There is no public record of the beneficiaries of a land trust. The trustee is listed as the owner, and only he or she knows the identity of the beneficiary.
2) Avoid Probate
Another very important benefit of a land trust is that the property owned by the trust does not have to go through probate when you die. A land trust can allow property to pass automatically to whomever one chooses without any court proceedings.
3) Keep Liens and Judgments Off the Property
When property is held in a trust, judgments and liens against the individual beneficiaries do not attach to the land. Therefore, a beneficiary may freely sell his or her beneficial interest even with judgments against her or her own name in the public records. This also applies to IRS liens.
4) Avoid Litigation
Owners of property are easy targets for lawsuits. Even a frivolous lawsuit may be worth filing if the defendant has numerous properties that can be tied up in litigation or seized. However, if it looks like a person has no assets, it may be difficult for a disgruntled person to find a lawyer to take the case. If you plan to own several properties, let an attorney at the Law Offices of Dennis L. Horton, P.A. set up a land trust for you to keep your name off the property records.
5) Ease of Changing Contingent Beneficiaries
While a will requires a formal ceremony for execution, a person can change the successor beneficiary of his or her land trust with a simple signature. Percentages given to successor beneficiaries can be changed as properties change and persons can be cut out of their inheritances without delay or expense.
6) Keep Sales Price Secret
Normally, when a deed is recorded in the courthouse, the documentary stamp tax (tax on the transfer of real estate) must be noted on it. This tax is based on the amount of the sales price so anyone can use this to find out the sale price. When you purchase a property into a land trust, you can set it up so that the doc stamps are not put on the deed and no one can know what you paid for the property, even though the tax must still be paid on the sale of the beneficial interest in a land trust, at least there is no public record of the tax paid.