Advantages and Benefits of Closing in a Land Trust
The Title Holding Trust or Land Trust is a device for acquiring, holding, managing and selling real estate. It is a more desirable and advantageous ownership structure than some of the more familiar forms of real estate ownership.
The reasons that are beneficial to Title Holding Trust or Land Trust are to acquire, hold and dispose of real estate or personal property include:
Confidentiality or Privacy of Ownership
Confidentiality and privacy of ownership is without a doubt the most important benefit of the Title Holding Trust or Land Trust. Owners of real estate are entitled to just as much privacy as owners of stocks and bonds. Real estate ownership does not need to be a matter of public record. The Title Holding Trust or Land Trust provides an excellent method for acquiring, holding and disposing of real estate without revealing the true owner's identity.
The Title Holding Trust or Land Trust is particularly useful in landlord-tenant relationships where the landlord wants all tenant contact to be with the property manager and does not want the tenant to be able to locate the true owner (Landlord).
Anonymity may also be desirable in real estate negotiations where knowledge of true identities might otherwise hinder or complicate the transaction
Ease of Transferring or Financing Property
Real estate owners must sign all of the necessary legal, financing and closing documents each time real estate is acquired, refinanced or sold. This burden can be eliminated by acquiring and holding real estate in a Title Holding Trust or Land Trust. Only the signature of the Trustee would be required when real estate is held in a Title Holding Trust or Land Trust. The Title Holding Trust or Land Trust can be an especially useful tool when there are multiple beneficiaries (owners) or multiple properties being acquired and held.
Protection Against Liens or Judgments
Liens or judgments against a beneficiary cannot affect the real estate held in a Title Holding Trust or Land Trust because the beneficiary does not own the real estate. The beneficiary owns a beneficial interest in the Title Holding Trust or Land Trust, which is personal property rather than real property. This can be particularly important when one of the beneficiaries in a Title Holding Trust or Land Trust may be prone to litigation, liens or judgments.
The Title Holding Trust or Land Trust protects the other beneficiaries in the same Title Holding Trust or Land Trust from these attachments.
Multiple Beneficiaries (Owners)
Title Holding Trust or Land Trust is particularly helpful in conveying or transferring ownership in property when there is more than one beneficiary since title to the real property is held in the name of the Trustee. For example, four children may have inherited their parents' property. In order to facilitate the sale of the property, it can be transferred into a Title Holding Trust or Land Trust. Thus, only the Trustee need execute the necessary transaction documents to complete a sale or refinance of the subject real property.
No Registered Agent
A registered agent for service of process is not required for a Title Holding Trust or Land Trust unlike with a corporation or limited liability company.
Title Holding Trusts are much more cost effective compared to other forms of real estate ownership. There are no annual filing fees, no tax return preparation fees, no minimum annual taxes due, no Secretary of State filing fees and no registered representative costs. There is only the annual Trustee fee.
Transactions are Private
The terms and conditions of any transaction remain confidential and private. Any recorded documents are in the name of the Trustee and are signed by the Trustee.
Saves on Title Insurance Premiums
The Trustee of the Title Holding Trust or Land Trust is the insured party and remains the same before and after any transfer of beneficial interests. Therefore, there is no need to obtain costly title insurance endorsements when beneficial interests are transferred.
Great Negotiating Advantage
Real estate investors can acquire real property without tipping off sellers or competitors. (Walt Disney acquired all of the land in Florida through a land trust prior to construction of Disney World. This way no one was able to take advantage of Walt Disney by inflating prices.)
Collateral for Financing
The beneficiary's interest in a Title Holding Trust or Land Trust can be used as collateral for bank loans. The beneficial interest may be pledged as collateral without the additional need and expense of obtaining a mortgage. The beneficial interest may be pledged as collateral even where there is an existing mortgage against the real estate.