Posted by Bill Gatten on May 15, 1999 at 16:42:06:
>The best one I can see to uses is the revocable living trust.
A land trust is a title-holding trust that is both revocable and inter-vivos (living).
>The information on the living trust all talks about doing them for a short while. Could they be done for a long time? Say 20 years? Till the mortgage is paid off?
Yes. Up to 21 years, or the length of any underlying purchase financing–which ever is greater. After revocation at the end of that time, a new trust could be set up for another like period.
>If yes, who would renew the mortgage when it becomes due?
You should certainly not write a co-beneficiary trust for a longer period than your call-date if you’re planning to involve someone else (co-beneficiary). If they came up on your call date and couldn’t re-fi, and you couldn’t either–and they got foreclosed on–they might be a little miffed.
>And would any of this trigger any due on sale clauses?
Trigger? Probably not. Violate? Yes, unless the mortgagor (borrower of record) were to hold [mutual] Power of Direction, keep the trust in its own name, and divest only a portion of the beneficiary interest in the Assignment. Thus avoiding any divestiture, sale, or relinquishment of “all” of its directive control over the real estate securing the loan.
>Also what happens if the seller dies?
'Depends on the strength and nature of one’s religious convictions. It’s the “80:20 Rule”: Only 20% of those who want to go to Heaven actually make it on the first try; and the remaining 80% are still running comps.
>Upon one’s death, do I just take title automatically? without trigering anything?
No. That’s why they call it a “living” trust. Nothing changes… the heirs of the decedent inherit his/her rights, obligations and benefits. If they default, they are subject to whatever default provisions are contained within the documentation.
If you are the co-beneficiary (i.e., the Resident Bene.) and the Non-resident beneficiary dies, you don’t get his interest… his heirs do (unless you had some provision to the contrary within the documentation).
Hope this helps.
Bill