Despite the assumptions that the litigation surrounding a trust is complicated and can be confusing to use, the concept is actually very simple and effective to create and use, and will give you more than one reason to make on one for yourself. One clue as to how a land trust can work out to your advantage is by looking at how corporations use these legal documents, in order to accumulate land for their own purposes.
Very simply, just like the concept of the trust where a person is nominated to hold something of value for the benefit of another party, similarly, a land trust is where the trustee holds title of the property in question for the trustor. Their sole responsibility is to sign deeds and mortgages at the beneficiary’s directions but for all practical purposes, the beneficiary (trustor) is considered the true owner of the property when it comes to taxes.
What makes this type of document interesting is the revocability of ownership without having to change anything else. Apart from this, here are several reasons as to why one (who owns several properties) should use a land trust.
1) The affairs of the beneficiary (trustor) remain private.
2) Avoiding judgments, title claims and liens.
3) Protection from Home Owner’s Association (HOA) claims
4) Ease of transfer and control
5) Buying properties owned by banks
6) Keeps the value of tax assessments lower
7) Avoids transfer taxes
8) Making mortgage payments ‘assumable’
9) Most importantly, it discourages litigation against you (the beneficiary) as the property is in the name of the trustee, who might not necessarily have as much money as you might have, and therefore this can help avoid lawsuits that might burn a hole in your pocket.