LAND TRUST….A WELL-KEPT SECRET
The Trust goes back to the medieval times in England. From there it came over with the earliest settlers to America.
Actually the first record of a trust was in Egypt in 1805 B. C. Later about 51 B. C. Julius Caesar used a trust to provide for his family in the event he did not return from the Gallic Wars. It was by the spread of the Roman Empire and Roman law that trust law found its way to England and then to America.
The United States of America Constitution, from the start, embodied the trust concept. By recognizing the sanctity of contracts and the laws of all states your right to use trusts was a gift from and a tribute to our founding Fathers.
Article I Section 10; Article IV Section 1; and Article IV Section 11 are the portion of the United States Constitution that are relevant to the use of Land Trusts. Take a look.
WHAT WILL A LAND TRUST DO FOR YOU?
A properly drawn Virginia Land Trust provides a large number of reasons to use it to hold title to real estate. Here are a few:
- Privacy and/or anonymity, the Land Trust is not recorded in the public record. The trustee is prohibited from revealing the Beneficiary.
- The legal and equitable title are separated from the income of the property. In Virginia real and personal property interests are distinguished by state law.
- There are no requirements to file with or ask permission from the state to create a Virginia Land Trust.
- No state fees or registered agent required.
- Ease of transfer for estate planning and avoiding probate.
- Virginia Land Trust is a grantor trust. There are no adverse tax consequences. No tax return required for the Trust. The benefits of Section 121 for your personal home will not change.
- Ease of multiple ownership by multiple beneficiaries.
- The Garn-St Germain Depository Institution Act of 1982 specifically allows one to place one’s property into a Virginia Land Trust without triggering the due-on-sale clause.
- A Virginia Land Trust can be used in all states except Louisiana.
- A Virginia Land Trust can easily be operated across state lines.
- Judgments and liens against the Trustee or Beneficiary do not attach to the property held by a properly structured Virginia Land Trust.
- No partition. May avoid a forced sale upon divorce.
- If the real property is in Land Trust before a marriage, there may be no need for a prenuptial agreement.
- No personal liability by Beneficiary on the purchase money note. (If noteholder agrees)
- A Virginia Land Trust makes it easy to transfer ownership to other entities.
- Low or no cost to transfer beneficial interest.
The value of Virginia Land Trust will become more apparent as you learn the many benefits of this powerful investment tool.
The Virginia Land Trust can be the very foundation of an efficient, flexible estate plan for the savvy real estate investor or property owner.