by E. Christopher Caravette
Illinois is one of only a few states that allow Land Trusts which can be a terrific estate planning tool.
What is a Land Trust, and how can it benefit you?
A Land Trust is established by signing a Trust Agreement with the trustee, usually an institution in the business of land trusts. It offers you, as an owner of property, a unique package of benefits that while letting you enjoy all the advantages of ownership without some of the complexities.
Some of the benefits of a Land Trust may include:
- Privacy – Once the Trust Agreement is executed by both parties, and once real estate is conveyed to the trustee, the title is held by the trustee, not you as an individual.
- Avoidance of Probate and Cost Savings – A Land Trust can allow your estate to avoid having to probate the real estate upon your death contingent beneficiaries are named, which can significantly reduce expenses to your estate.
- May allow you to use your signature alone for property documents, eliminating the need to have other joint owners sign on deeds, mortgages, leases, and other required documents.
- May reduces joint ownership risks, such as faulty titles due to insanity, divorce, or a co-owner’s death.
- May reduce the paperwork associated with real estate sales, making the transfer of title a simpler procedure.
- May avoids ancillary probate for out-of-state owners.
- May sometimes allow you to take advantage of certain tax deductions as a beneficiary which are not otherwise available.
- May allow ownership interests to be assigned. You may use the equity as collateral for borrowing purposes.
A revocable living trust may be of tremendous benefit to you, but each individual has to weigh the costs and benefits. Our firm has been assisting our clients with their estate planning needs, including advising clients on land trusts, for more than twenty-five years, and would be happy to help you as well.
(Note: The information in this article is intended to be general in nature. Plan to discuss your particular circumstances with an attorney for how this might apply to you.)
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