A trust is a legal agreement between the originator, called a grantor, and the trustee, wherein the grantor transfers legal title of assets to the trustee who then holds legal title to the assets for the benefit of the trust beneficiaries.
By splitting legal title and beneficial interest in the trust assets in this way, a trust allows the grantor to give up legal title, while retaining beneficial interest and possibly control over the assets.
Land trusts are a very powerful asset protection tool for those who own real estate. A land trust, unlike a state-regulated corporation, LLC, or limited partnership, is not registered with the state.
With a land trust, there are no public records of officers, directors, or shareholders, and the trustee keeps the trust records and the identity the trust beneficiaries confidential.
Actually, the trustee of a land trust does not have to reveal information regarding those holding beneficial interest in a trust to anyone. So, you can use a land trust to hold title to your real estate and enjoy anonymity, privacy, and protection.
A land trust is a revocable living trust. A living trust is a trust created while you are alive.
A revocable living trust is one that, as it sounds, is revocable, changeable, or terminable at your direction. So, a land trust is a trust that can be changed, altered, taken back, or terminated while you are alive.
Unlike a corporation or LLC that is created by filing the right documents with the secretary of state, a land trust is created by a trust agreement. In fact, a land trust does not have any state filing requirement, nor a public place where land trusts are reported.
You create a land trust by signing a trust agreement between you and the trustee, who will manage the trust property. After the trust agreement is signed, the property is then transferred by deed to the name of the trust and recorded at the county clerk and recorder's office.
The deed is the only document that is ever reported with a land trust. The trust agreement is not recorded, and therefore, nobody but you and the trustee will know who the owner and beneficiary of the trust is.
The beneficiary of a land trust can be you, as an individual, or a corporate entity such as an LLC, corporation, or a limited partnership, or even another trust, which would give you even further anonymity, privacy, and protection.
Holding title to property in a land trust can provide you with several important benefits, including:
A handful of states have actually created statutes recognizing land trusts, also known as “Illinois Land Trusts”. In these states, notably Illinois and Florida, land trusts have been codified into law.
Unfortunately, Colorado is not one of these states. In Colorado, there is no actual statute governing land trusts. But, this doesn't mean that land trusts are not legal in Colorado.
In fact, support for land trusts in Colorado is implied by case law. What's more, Colorado title companies issue title insurance for and deal with transfers to and from land trusts on a regular basis.
For more information, contact an experienced Colorado estate planning attorney to arrange a free, no-obligation consultation, where you can find if and how a land trust will benefit your overall estate plan.
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