Posted by JohnBoy on July 29, 2003 at 18:43:14:
So why not just have your attorney be the trustee and forget about the bank? Why do you need to use the bank?
PROPERTY IN TRUST AT CLOSING? - Posted by Jerry - IL
Posted by Jerry - IL on July 29, 2003 at 17:46:58:
Please help. I’m buying my first rental property and have been told that I should NOT take title in my own name, but in trust. My closing is Friday, August 1st. I’m scrambling to get a “Warranty Deed To Trustee” form sent to my attorney from the bank that will be the trustee. They will e-mail him the form which he will prepare by closing. Then, I guess I have to take it to the bank to have the trust agreement made up, etc. Yada, Yada.
Now the bank and one mortgage broker (I’m paying cash with no mortgae anyway) are telling me that I can’t do that. I have to take the property in my name (I don’t want to appear as owner of record, even for five minutes) at the Recorder of Deeds’ office before transferring it into trust. I am not trying to cheat anyone or do something illegal, just to provide the anonymity in case any tenant decides to sue me. I want to be known only as the property manager for the “big trust people”, whoever they are. I also don’t know if it’s OK to give my home address for rent checks. I hate to travel (far) to the closest P.O. Box if I don’t have to.
Some investors have told me that I don’t have to pay the bank their $185 plus $110/year for that. They say that I can be the trustee AND the beneficiary (which I thought was a no-no), but I’m told people are doing that successfully all day long with no problem.
When I ask the bank to name the trust the 123 Elm Street Trust, I got a whole lot of flack about that too - that THEY, the bank, are in charge of naming the trust and want to give it the next number on their list and also MY NAME on it. It sounds like big brother.
I think that I have all the papers I need: the Trust Agreement, Assignment of Beneficial Interests, Warranty Deed to Trustee, etc. Can I, like another investor, do this all myself or have my attorney draw up the forms and keep them in my file cabinet, to change anytime at will and that nobody need see or read?
Please help me. I don’t want to make a stupid mistake if there’s still time to avoid it. One guy tells me LLC is the only way. Another tells me an LLC for each property; still another says separate trusts for each property with one LLC as beneficiary to hold the trusts. I’m a single person with no family to make trustee and I’m feeling that I did the hardest part by buying the property right, but might screw it up at this late stage.
Thanks for any help.
Jerry - IL
Re: PROPERTY IN TRUST AT CLOSING? - Posted by Ben (FL)
Posted by Ben (FL) on July 30, 2003 at 11:35:09:
From what you’ve said, if you go with the bank as the trustee, you’ve just wasted all your effort at being anonymous. The bank clearly has no idea what you are trying to accomplish. I’d bet $2 that they will record the trust agreement. They are used to being trustee of other types of trusts set up for completely different reasons.
Forget the bank. Have your attorney make sure all your paperwork is in order. If he/she will be trustee - even for a very small fee - that may be best, for now. Some states allow an entity to be trustee. The best solution may be for you to form an LLC that will own nothing, that will receive no money, that will not even have a checking account. It is your trustee. All it does is hold title to real estate. Ask your attorney about that. Right now, for this closing, if he doesn’t know or is not sure, then stick with the easy solution for now - he/she is your trustee, or your accountant, or your wife/friend/brother/barber, etc.