Re: The Partition thing revisited - Posted by Bill Gatten
Posted by Bill Gatten on April 18, 2000 at 21:38:17:
My own understanding is that though such a partition action (by an “outside” party such as a creditor of one of the beneficiaries) is “virtually” impossible–and pretty much unheard of, as far as I know–partition against Personalty is possible: just not by an outside party (i.e., by judgment creditors, even including the IRS). Beneficiaries can partition off the interests of each other; husbands and wives can partition each other’s interests; a dissenting beneficiary in a multiple beneficiary land trust can be cut loose by partition, etc.). It’s just that in a co-beneficiary land trust (assuming there is no collusion proven), a creditor would likely not be able to enforce a charging order without partition, and a partition action, even if successful, couldn’t force a sale, or a division and distribution of the personal property (which is what beneficiary interest in a land trust is) held by two or more unrelated parties. When the co-benes hold their interests apart and with different objectives each co-beneficiary is pretty much protected from the untoward legal actions and personal problems of the other. It seems logical that if a creditor did get a charging order, they?d have to wait for their pound of flesh until the liquidation of the trust?s assets at the scheduled termination date (which could be 10 or 20 years later).
Our law firm (the one that represents us?we are not one) would strongly urge that anyone seeking to protect, rather than just shield a property’s title, by means of a land trust would be wise to appoint a co-beneficiary, especially for this purpose.
Short of creating a fully funded grantor’s pass-through inter-vivos family trust, in combination with a Family Limited Partnership and a Foundation (e.g., a CRT): the 3rd party trustee, co-beneficiary land trust seems to be pretty much the most functional simple tool for protection against judgment creditors, tax liens, BK?s martial disputes, etc. (not to mention probate and federal estate taxes),
Not my data…?only lamely aped from a conversation I had with one of our attorney just this morning on that very subject, as a matter of fact.
Check with you state’s Code Civil Procedures.
Related CA. Statutes (in reference to espress trusts in general) are 872.210, 710, 730, 030 and so on.