Posted by Bill Young on June 14, 2001 at 22:40:09:
Ben, there are a couple of difficulties with your comments on the trust. One of the benefits of the title holding land trust, as opposed to a plain living trust is the non-partitionability of the beneficiary’s interest in the property. Since the trustee’s actions are directed by the beneficiary, a judgment creditor conceivably could bring an action against the beneficiary/trustee to disolve the trust or relinquish the property to him as satisfaction of the judgment.
Ideally the trustee should be a corporation, preferably a non profit bonded one at that. This way, the trustee cannot die and tie the property up in his estate, the trustee’s personal or financial problems cannot attatch to the title of the property, he is bonded in case of problems. Also, having a non-professional trustee can affect the very integrity of the trust, vis a vis creditors etc.
There seems to be a number of do-it-yourself trust creators around, but they should double check the rules before proceeding. Check with Bill Gatten at landtrust.net and/or Bill Bronchick at legalwiz.com
I am currently operating as an individual. I Buy Houses… Jim the homebuyer (You get the picture)
Say I want to buy a house from a seller subject to. I have the seller place the house in a trust with the seller as beneficiary, and then have the seller assign me beneficial interest for said trust. And all the other stuff as well that needs to be signed… That’s cool.
Heres what I need to know:
When the seller reads through the trust agreement and signs the deed placing the property into the trust they always ALWAYS ask this question… Who is “Jane Doe” {not really the name I use}, but my fiancees’ name that I use for “Trustee” of the trust. This seems to bug them, so what I’m asking is this:
Although I understand that I shouldn’t be the trustee of a trust I own, but can I sign as trustee of the trust just to eliminate the sellers deep concern for this and then after I get home just simply resign as trustee and appoint someone else as trustee …Someone like {My original choice} Jane Doe…
As soon as I become an LLC I can have the LLC be trustee and then I’ll sign “As Manager” where it says Trustee, but until then, what I mentioned
Posted by B.L.Renfrow on February 09, 2001 at 20:57:21:
Keep in mind the main advantage of using a trust is anonymity. If a property is deeded to “Jim the Homebuyer as Trustee of the 123 Main St. Trust” you’ve lost the anonymity factor.
I just tell my subject-to sellers before they ever see the paperwork that the “Jane Doe” name they’ll come across is an associate of mine whom I use as a trustee. I also tell them I’ll later be added as a co-trustee. I’ve yet to have a seller have any problem with that, nor be unduly concerned with the details behind Jane Doe’s identity.
Posted by Ben (FL) on February 09, 2001 at 14:38:36:
Or…and this is straight from Bill Bronchick’s “Nuts and Bolts” course…if the seller is Mr. Smith, have him put the house into the Smith Family Trust with you as the trustee. He can then assign the benficial interest either to you or to your finacee - and there is no legal or financial reason you cannot be both trustee and beneficiary.
If your primary goal, though, is to prevent your name from actually appearing on the deed, then your fiancee, or a friend, attorney, family member, or accountant, could be the trustee. What you tell the seller, when they ask who the heck Jane Doe is, you say “That’s my partner.” In this case, your partner is trustee and you are benficiary. Since the signing of the Trust happens about the same time as the assigning of the beneficial interest, then the seller should be comforted in seeing your name there on the assignment sheet.
Now, I am not an expert, but it seems to me that the trustee is supposed to be a living breathing person that signs documents, collects and distributes payments, and receives mail from the tax collector, bank, and insurance company. Wouldn’t it then be cumbersome to have a company be a trustee. Then you have to deal with “so and so, sole proprieter of such and such LLC…” every time you sign?
I don’t know the answer to that, I was just wondering “out loud”…sort of.