Re: Disturbing News - Posted by Bill Gatten
Posted by Bill Gatten on September 21, 2003 at 22:50:46:
I have dozens of my own properties in land trust across the country and have been responsible for putting another few thousand properties into land trusts. No title insurance problems ever.
Understand that in a land trust, the trustee’s name MUST come first (because the trustee IS the legal and equitable title holder–the owner–not the trust. If the name of the trust comes first, that would infer that the trust was the holder of title and not the trustee. Such would not be a land trust, but would have to be deemed be a dry, failed or grantor’s trust without much force or effect, and as such would not allow for transfer of ownership benefits (tax write-off for instance) to another party. And no real asset protection or equitable conversion would have been achieved.
And as someone else mentioned, the county’s job is to record, not make or dictate law. And if you have a title underwriter is that misguided, just get another title insurance company rather than try to talk sense into them.
Understand that anyone should have the right to give his property to anyone he chooses…whether it be a trustee or his brother-in-law…that is not a title company’s business as long as the transfer is clean and legitimate. And re transfer tax (if that’s what you mean by excise tax): what would it be based upon when transferring a property to an inter-vivos trust wherein there is no transfer value…simply a transfer to an inter vivos trust for asset protection purposes (by the owner to the owner?s trust)…there is no basis for assessing a tax (though in some states—Pa., Fla., Wisc. etc.) they do charge a nominal fee of $25.00 or so for transfers into inter vivos trusts).
What I suspect your nay-sayer is referring to are land trusts wherein a new beneficiary other than the settlor is named on the trust. We just don?t do that?in every one of our transactions the beneficiary interest is silently assigned after the settlor creates the trust as its only beneficiary. If the title company or anyone wanted to see the trust, it would show the settlor as the only beneficiary: no sale, no transfer, no conveyance to another at all.