Posted by JOHNMAN on April 02, 1999 at 19:00:54:
Thanks Bill! I appreciate your inputs!
Johnman
Selling of property …??? (Corp and land trust) - Posted by JOHNMAN
Posted by JOHNMAN on April 01, 1999 at 23:19:34:
I’m confused!!!
For example, I have Company A (c corp) one member. I purchase a property under Company A. I then create a land trust and transfer title from Company A to the land trust. Now its time to sell. The trustee is the one that signs the contract and closing documents while the beneficiary (Company A) sits back and collects the proceeds. Is this correct?
Another one. Let’s say I have a rental property in my name. I then transfered title into a land trust. Then I assigned my interest to my Company B. Same as above time to sell, the trustee is the one that signs the contract and closing documents while the beneficiary (Company B) sits back and collects the proceeds. Is this correct?
I’m trying to get this stuff straight in my head. I understand the setting up part its the selling once you have it is where I’m lost.
Thanks for the feedback!
Johnman
Re: Selling of property …??? (Corp and land trust) - Posted by Bud Branstetter
Posted by Bud Branstetter on April 02, 1999 at 15:21:48:
In your first example you do not need to transfer title to the land trust. Your contract would be in the corp name and you direct the closing agent to title it as “123 Main land trust,Joe Trustworthy as trustee”. The beneficial interest in the trust would be the corp or anyone you want.
In your second example, it is not best to have rental property in Company B if it is a C corp. Preferred way is the limited liability entity for rentals. Talk to your tax man before you sell through the corporation(C).
Re: Selling of property …??? (Corp and land trust) - Posted by Bill Gatten
Posted by Bill Gatten on April 02, 1999 at 12:51:04:
Johnman,
I just sold a property out of a land trust last week (and have, of course, done or been involved with many dozens of others). What we typically do is simply have the land trust trustee (at the beneficiary’s direction) transfer the title back to the beneficiaries in Escrow (in that it’s a “land trust,” there are no reversionary penalties), who then execute all transfer documentation to the new owner.
Hope this helps.
Bill
Re: Selling of property …??? (Corp and land trust) - Posted by johnman
Posted by johnman on April 02, 1999 at 16:42:07:
Bud,
Thank you sir. But now on the selling part, the trustee is the one that signs all documents per the beneficiaries direction. Correct?
Johnman
Re: Selling of property …??? (Corp and land trust) - Posted by johnman
Posted by johnman on April 02, 1999 at 16:48:58:
Bill,
Are you saying that at closing, first the trustee is directed by the beneficiaries to transfer title back to the beneficiaries (warranty deed?) then the beneficiaries execute the closing documents? Did I understand you correctly? Why do you it that way and why not have the trustee sign the closing documents for the beneficiaries per direction of the beneficiaries?
Thanks.
Johnman
Re: Selling of property …??? (Corp and land trust) - Posted by Bill Gatten
Posted by Bill Gatten on April 02, 1999 at 17:59:39:
Johnman,
Good point. Maybe my answer was misleading. Sorry. When you have a simple trust with your own easily controllable entities serving as trustee and beneficiary, you most certainly can do it that way. I see your position.
I tend to forget that our transactions get a bit more complex (and maybe more cumbersome) sometimes, in that the trustee is a 3rd party unrelated corporate entity acting on behalf of unrelated beneficiaries (often completely unknown to each other). Although, even in our transactions, the trustee can certainly execute requisite documents as directed by beneficiaries. It’s just that the trustee would prefer not being involved in any of the intricacies of the sale process, and generally the beneficiaries prefer directing the disposition, and having all Escrow Directions and transfer documentation in their names.
Bill