About Larry Harbolt
Larry is not an attorney, but an enthusiastic student, advocate and user of land trusts.
In the course of Larry's, use of Personal Property Trusts as a beneficiary, is mentioned and advocated by Leslie Jones, CPA as it has no tax repercussions. An out of state trustee helps a lot too.
A beneficiary can also be in the form of a Family Limited Partnership, or a Living Trust.
A land trust can also hold mortgages, leases, options and interests in land.
Trustee must use the word trustee in any signature otherwise they are "personally" signing.
How to stop the trustee from selling the trust property without permission:
1. record a mortgage, e.g. $200
2. record a memorandum of option.
http://www.legalwiz.com/articles/trusts-rightframe.htm
A lease can be in the name of the trustee or the beneficiary.
William Bronchick notes
William Bronchick says that a land trust is also known as a "title holding" or "nominee trust", as the trustee is just an appointed person holding title for the beneficiary.
Land trusts are revocable.
Grantor is known as settlor in some states.
Even if it is known that you are the beneficiary, then the attorney has ask the judge to set aside the trust.
Trusts and Capital Gains Tax
The trust will not affect the tax. If you sell your primary home and
it's in a trust, you get the $500K cap gains exclusion if you meet the
eligibility and file jointly. If you sell investment property, it's all
the same rules. We have all assets in our trust and have been filing tax
returns for years, showing all cap gains/losses on our personal returns.
Now, I'm talking about a living trust. There are other types of trusts
that file their own returns, have their own tax ID numbers, etc. These
are usually irrevocable trusts...once you transfer assets to that trust,
you don't take them back personally, unless you meet the rules that are
in the trust documentation. These trusts are mostly for kids (a parent
wants their kid to have money that the kid can't touch and even the
parent can't touch without certain conditions) or even a parent, or once
one spouse dies, to avoid taxes the estate is split in 2 and half is put
in the B Trust (irrevocable), etc. I will be doing that for a family
member if they get an inheritance, so their money is protected in case
of divorce and protected from being spent unless certain conditions are
met.
Remember to pay your doc stamps when a transfer of beneficial interest
occurs otherwise the IRS may consider that the original beneficiary is still
the owner, and any IRS liens may attach to the property.
