Posted by Jim on May 25, 2005 at 01:15:55:
Isn’t a land trust just a contract. If it is just a form why can’t I just copy it exactly like the one the attorney drew up.
LLC as Trustee - Posted by Jim
Posted by Jim on May 21, 2005 at 02:21:20:
Can I have my LLC as the trustee on my Land Trust? If so could I then also make the llc or another llc the beneficiary? This is suggested in a sub2 course that I can’t mention on here.
Re: LLC as Trustee - Posted by Sean
Posted by Sean on May 23, 2005 at 10:58:11:
Can you? Yes… do you need to? I dunno why you would do that frankly.
Trusts are VERY WEAK protections… think of them as Shower Curtains… also in some states, such as mine… holding rental property in a trust DEFACTO makes it a Business Trust and makes the property subject to something called the Capital Stock and Franchise Tax, which is a milliage rate tax on equity in the property every single year that must be paid.
I know all the GURU’s swear by trusts, but they aren’t the panacea many think they are… at least not here.
I’d go with Limited Partnership with an LLC or Corp as the general partner holding just a very small amount… maybe 1% of the property. The limited partners liabilities are nice and protected to no more than what money they had into the deal to begin with.
Re: LLC as Trustee - Posted by Skip
Posted by Skip on May 22, 2005 at 06:20:46:
What course did you buy? I think you’re allowed to say the name here.
I use Bill Bronchick’s land trust course, which recommends a friend as trustee. He recommends an LLC as beneficiary.
You could use an LLC as trustee and beneficiary (of course you would want two different LLCs), but I don’t see any advantages to having an LLC as trustee instead of an individual. The members of the LLC would be public record, so they’d be no harder to identify than an individual. I’m sure the author of your course explains his reasoning in more detail.
Re: LLC as Trustee - Posted by Jim
Posted by Jim on May 22, 2005 at 15:45:04:
The advantage he states for using an LLC as trustee is you are always already there and can sign for the llc. Where as having the trustee as a friend or out of state family member could make it difficult to have them sign. The author is WT. Last time I posted his name my thread was deleted. Thanks.
Re: LLC as Trustee - Posted by Brad Crouch
Posted by Brad Crouch on May 22, 2005 at 15:42:49:
Skip,
> . . . but I don’t see any advantages to having an LLC as trustee
> instead of an individual.
LLCs and Corporations don’t die, but individuals do. When an
individual trustee dies, it can complicate matters considerably.
Brad
Re: LLC as Trustee - Posted by Skip
Posted by Skip on May 22, 2005 at 18:09:01:
If the trust agreement names successor trustees to take over in the event of the death of the trustee, I don’t see how there would be a problem.
Re: LLC as Trustee - Posted by Brad Crouch
Posted by Brad Crouch on May 22, 2005 at 19:09:20:
Skip,
If the trustee is married and lives in a community property state, half
the property will technically belong to the wife who will claim that
death of her husband does not extinguish her interest in the property,
This could turn into an expensive court case.
It is ALWAYS safer to use a corporation as trustee and LLC as
beneficiary, Both under your control, of course.
Brad
Re: LLC as Trustee - Posted by jim
Posted by jim on May 23, 2005 at 01:17:23:
Would having each property in a separate trust with the same llc as beneficiary give protection for each property just like if they were in a separate llc? I don’t really want a separate lt and llc for every single property.
Re: LLC as Trustee - Posted by Skip
Posted by Skip on May 23, 2005 at 02:56:02:
Having one LLC as beneficiary of multiple trusts won’t give you the same protection as a separate LLC as beneficiary for each trust, but it’s still reasonable way to do it.
If someone wanted to sue your trust, they should sue the beneficiary (your LLC). They could potentially get assets from all other trusts the LLC has a beneficial interest in. That’s assuming they knew which trusts those were. So if you used a separate LLC as beneficiary for each trust then that LLC would only be the beneficiary of one trust and that trust would only own one property.
But here in MD LLCs are rather expensive to maintain because of the annual renewal fee, so I don’t use a separate LLC as beneficiary of each trust. I do, however, use a separate Land Trust for each property since they don’t cost anything to set up.
And naming an LLC as beneficiary of a trust is still better than naming yourself as an individual, although there are cases in which you could be individually liable and the LLC would offer no protection.
Also, I’m still learning, so some or all of the above information could be wrong. Maybe someone else will confirm or correct what I’ve written.
Re: LLC as Trustee - Posted by Jim
Posted by Jim on May 23, 2005 at 10:28:56:
How did the land trust cost nothing to set up? My attorney told me it would cost me around $700 to set up a land trust. From that point on I will obviously just copy it and change the names on it. Is there a cheaper way to set it up?
Re: LLC as Trustee - Posted by Skip
Posted by Skip on May 24, 2005 at 01:18:51:
You don’t need a lawyer to set up a land trust, and it doesn’t cost anything if you do it yourself, but you do need a better understanding of land trusts than you have now. Even if you pay a lawyer $700 to set up the first one it doesn’t mean you’ll be able to set up your own afterwards. The lawyer is probably not going to explain everything step by step. So if you pay him you’ll have a properly set-up land trust (hopefully) and copies of the paperwork, but that may not be enough. If your goal is learn to do it yourself you should buy Bill Bronchick’s course for $300.