Here are a few advantages of creating a land trust.
Privacy of Ownership
One of the most common benefits that go along with land trusts, is the privacy of ownership. This allows you to hold assets under the guise of a trust. This means you can still own the assets, but your name and information are hidden.
When you pass away, even if you have a will, your estate will go through the probate process. This will require your loved ones to deal with a lengthy process before handling your assets. Instead, placing your assets into a land trust allows you to have a living will. Upon your death, your family will not be required to go through the courts to rent, sell, or manage your property within the trust.
Placing land into a trust makes it simple to pass on to a beneficiary. All you are required to do is have the name of who you wish to transfer the land to, and it will belong to that beneficiary.
Decrease Potential for Lawsuits
By creating a land trust you keep your net worth private. This may decrease your chances to be sued, or chances of having come after you, because your net worth and assets will be shielded from public knowledge.
Land trusts allow you to separate your assets from your name enough that they cannot be claimed by creditors. If you are sued your assets will be kept safely in the trust.
Living trusts can be a legal document or trust that is created by an individual while still alive. Living trusts give responsibility to the trustee to fulfill the assets within the trust upon the grantor’s death. The trustee is required to manage the trust in the interest of the beneficiaries. Similar to a land trust, a living trust provides the opportunity to transfer assets easily, and avoid the probate process.
There are several advantages of starting a living trust. Here are a few of the most common benefits of a living trust.
Living trusts allow people to pass on their property according to their living wishes. The property cannot be moved or given to anyone else until the grantor dies. It cannot be taken by creditors in the event of debts either.
Prepare for Death or Incapacitation
Should you become incapacitated or have an unplanned death, you need to have a plan for your property. Whether this is the management of your property, or who you wish to pass it on to, a living trust provides you that option. With a revocable living trust, your property can be managed and transferred if you are incapacitated, not only upon your death.
Similar to that of a land trust, living trusts help to avoid probate which is a painful process for a family after one dies. This helps to avoid family disputes and painful situations in court.
Revocable living trusts are not filed with the probate court, which means your assets will be kept completely private. Otherwise, your assets would be made public and everyone, including family or distant family, would know the value of your estate.
There are major distinctions between land trusts and living trusts. If you are choosing to think about your financial future, then knowing the difference between the two is important. Both living trusts and land trusts provide privacy in that your name and information are hidden from the public eye.
Living trusts give you the option to create a revocable or irrevocable trust during your lifetime. You will pick a trustee to oversee that trust and manage it. They are the legal owner of the assets in the trust and will need to manage it in the interest of whoever you name as the beneficiaries.
When you, as the trustor, die, the assets will go to the beneficiaries and they will avoid probate court. If you were to have a will it would need to go through probate, but a land trust does not need to go through probate either.
Land trusts are essentially a type of living trust. The main difference is that land trusts can only hole real estate or real estate assets. Whoever owns the real estate is the beneficiary of the trust, rather than specifically naming the person to inherit it. This trustee, or owner, will be able to control the property and own all of the property rights. They are revocable, which means that they can be amended at the discretion of who created the trust.
As far as fees and taxes are concerned, living trusts typically cost a minimal amount to both establish and maintain. In many cases, income on taxable securities can be tax-deductible. Income from land trusts is considered personal income. It is required to be reported on a personal income tax return.
If you are looking to keep your name off property records then setting up a land trust may be something you are interested in. If you are single and have assets in your name, you may consider a Revocable Living Trust. This will keep your assets out of probate, and into the hands of who you want them to go to.
Hiring an attorney is always an important part of starting a trust. This will ensure that all the paperwork is done properly and that in the event of your death, your assets will go where you want them to. It can also help you to keep yourself in compliance with taxes and the legalities that go along with owning a trust.