Real Estate Title
Investor often ask the best way to hold title to real estate. So they seek out real estate brokers, lawyers, escrow agents, online sources, etc.
Most investors are seeking these three benefits:
- Asset Protection
- Limited Liability
- Privacy or Anonymity
What offers you most or all of these benefits:
- Limited Liability Company – LLC
- Land Trust
- Business Trust Company
LLC
The most popular is an LLC. They’re cheap to setup. The reason for this is because you exchange your personal details into a government database and consent to have the LLC data available on the internet.
You can not setup one yourself. You need state permission to grant a charter. They also mandate certain filings upfront and annually. You must also maintain a registered agent who can accept legal service (lawsuit papers).
There are many books explaining how to operate an LLC with investment real estate. You can get asset protection and limited liability. Anonymity for the LLC no. Privacy for the shareholders yes
Land Trust
A few investors will choose a Land Trust. These require a different type of knowledge and expertise to operate. You might find blank forms online but it’s not that easy to execute a transaction.
Land trusts operate with a reverse flow from all other trusts. In other trusts the trustee operates and functions as a fiduciary with control. In a land trust the beneficiary is in control which creates a different set of papers.
They originated in Illinois a hundred years ago. Some people use them to avoid LLC setup and provide some privacy. But you can find state regs where the beneficiaries are identified in the recorded deeds. They do not offer asset protection or limited liability.
Business Trust
A third form of holding title to investment real estate is with a Business trust. They operate like all standard trusts with the trustee in control.
Long ago they were used for holding real estate because state statutes prohibited corporations from owning real estate.
You do not need government permission to create a business trust. They can offer limited liability, asset protection and privacy for the beneficiaries.
Whether using a land trust or business trust the only way to get true anonymity is by filling out the grant or warranty deed correctly.
Three Way Comparison:
Privacy – LLC shareholders or Trust beneficiaries yes.
Anonymity for LLC no. This is because they have a permanent digital record on the internet. Only a trust can have true anonymity on a public document.
| Asset Protection | Limited Liability | Privacy | Anonymity | Resident Agent | Deed Secrets | |
| LLC | Y | Y | Y | N | Y | N |
| Living Trust * | N | N | N | N | N | N |
| Land Trust | N | N | Y | Y | N | Y |
| Business Trust | Y | Y | Y | Y | N | Y |
* Living Trust for Estate Planning
Optional:
The way you get untraceable anonymity depends upon language in the grant or warranty deed. HOW you do and how you do not fill it out makes a world of difference. These are little known secrets. Garden variety lawyers and escrow agents have absolutely no knowledge or expertise.
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