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Why You Need a Title Holding Trust (Land Trust)

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williamexeter

Learn how to buy, hold, manage and sell real estate in a confidential and private manner. Keep you real estate ownership private and off the public record.

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Why You Need a Title Holding Trust! William L. Exeter President and Chief Executive Officer Exeter Fiduciary Services, Inc. Exeter 1031 Exchange Services, LLC
The Exeter Edge Webinar Etiquette Everyone will be in listen only mode Please a sk questions as they come up Use the Q&A function We will unmute phone lines afterward. Use audio pin number Please DO NOT. use speaker phones place call on hold (on hold music) use mobile phones (use land line) type or shuffle papers (creating noise)
History of the Land Trust Dates back to the early 1500s under King Henry VIII Illinois Land Trust introduced in the late 1800s Title Holding Trusts introduced in California in early 1900s Referred to as Title Holding Trusts , Land Trusts , Blind Trusts, Business Trusts
Your Title Holding Trust Non-recorded trust agreement Fully revocable at anytime Can terminate or amend trust at any time Can terminate or amend even after death Grantor trust Similar to Family Living Trusts And yet, has significant differences Pass-thru entity Disregarded entity
Parties to the Title Holding Trust Trustor (Grantor or Settlor) Person/entity setting up the trust Beneficiary (Primary) Living Trust no present interest Title Holding Trust Present interest (controlling interest) Successor beneficiary No current interest in trust Future interest only Always name one if beneficiary is natural person (i.e. can die)
Parties to the Title Holding Trust Trustee Exeter Fiduciary Services, LLC Has no discretionary authority Beneficiary must provide written authorization & direction for Trustee to act Power of direction General (unlimited) Specific (limited)
Benefits of a Title Holding Trust Confidentiality/Privacy of Ownership Those concerned about litigation: Executives, managers, highly compensated individuals, etc. Investors, realtors, developers, contractors Those worried about privacy/stalking: Politicians, judges, law enforcement, celebrities, stalking victims Acquisitions/Negotiations Example: Walt Disney/Disneyworld
Benefits of a Title Holding Trust Living Trust vs. Title Holding Trust Similar, and yet very different! Living Trust Trustee holds legal, equitable and beneficial interests of ownership Title Holding Trust Trustee holds only legal/equitable title Beneficiary holds beneficial interest Beneficial interest is personal property; not real property (very important)
Benefits of a Title Holding Trust Avoids probate administration Avoids ancillary probate for out of state real property owners Easy succession of ownership Estate planning benefits No need to change current plans Integrates with existing trusts
Benefits of a Title Holding Trust Ease of transferring ownership Partial distribution of property Easy to make gifts to kids or others Assignment of beneficial interest Considered conveyance of underlying property held in Title Holding Trust
Benefits of the Title Holding Trust Protection against liens and judgments Co-owners of real estate Real vs. personal property interest Avoids clouds against title Death, Divorce, Bankruptcy Litigation, Settlements, judgments, Federal, State vs. local tax liens Income tax Property tax Avoids partition actions/charging orders
Benefits of a Title Holding Trust Multiple beneficiaries Ease of administration Executing documents Purchase and sale agreements Loan documents Notes, deeds, etc. No registered agent for service Tax Considerations Pass-thru entity Disregarded entity
Benefits of a Title Holding Trust Tax Considerations Pass-thru entity Disregarded entity Special Income Tax Strategies Section 1031 (tax deferred exchange) Section 1033 (involuntary conversion) Section 121 (tax free exclusion) Section 453 (installment sale treatment)
Benefits of a Title Holding Trust Cost efficient Annual costs Title insurance premiums Privacy Purchases Sales Management Holding Negotiations Financing, refinancing
Title Holding Trusts do NOT: Provide liability protection Minimizes risk of litigation No liability protection once sued Avoid taxes if otherwise due Income, capital gain, gift taxes Property taxes Avoid due on sale clauses Full or partial transfer Loan documents Avoid reassessment for property taxes
Contributing Property into Trust Referred to as funding the trust Title Holding Trust should take title At acquisition, not later Otherwise provides only limited confidentiality/privacy True owner should never show on title Ensure all documents reflect Trustee Environmental indemnity agreement Evidence of insurance
Beneficiaries/Power of Direction Primary beneficiary Successor beneficiary Power of direction Change or update at any time
Financing Property in the Trust Many lenders will not lend while property is held in trust Conduit lenders Portfolio lenders Underwriting on Beneficiary Note and Deed of Trust executed by Trustee (Exeter Fiduciary Services, LLC) Beneficiary guarantees loan Beneficial interest pledged as collateral
Management of the Property Very flexible Key factor is amount of confidentiality and privacy desired by beneficiary Acquisition Property management Leasing Selling Record Grant Deed, or Assign beneficial interest in Trust
Role of the Trustee Legal vesting on public records: Exeter Fiduciary Services, LLC, as Trustee for THT No. XX XXXX No discretionary authority Written direction required Executing notes, deeds, leases, etc. Preparing Trustees certificate Corporate Trustee; not individual Trustee has no liability
Are You Ready to Take the First Step in Protecting Your Properties? Set-up a complimentary consultation with one of our trust officers Follow-up email with links Copy of Power Point White paper with 24 benefits The Exeter Exchange Newsletter Follow-up survey Thank you for attending we look forward to helping you protect your properties.
Exeter Fiduciary Services, Inc. National Corporate Headquarters 402 West Broadway, Suite 400 San Diego, CA 92101 Office: (619) 615-4210 Toll Free: (866) 393-8370 Facsimile: (619) 615-4205 Email: wexeter@exeterco.com Website: www.exeterco.com

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Why You Need a Title Holding Trust (Land Trust)

  • 1. Why You Need a Title Holding Trust! William L. Exeter President and Chief Executive Officer Exeter Fiduciary Services, Inc. Exeter 1031 Exchange Services, LLC
  • 2. The Exeter Edge Webinar Etiquette Everyone will be in listen only mode Please a sk questions as they come up Use the Q&A function We will unmute phone lines afterward. Use audio pin number Please DO NOT. use speaker phones place call on hold (on hold music) use mobile phones (use land line) type or shuffle papers (creating noise)
  • 3. History of the Land Trust Dates back to the early 1500s under King Henry VIII Illinois Land Trust introduced in the late 1800s Title Holding Trusts introduced in California in early 1900s Referred to as Title Holding Trusts , Land Trusts , Blind Trusts, Business Trusts
  • 4. Your Title Holding Trust Non-recorded trust agreement Fully revocable at anytime Can terminate or amend trust at any time Can terminate or amend even after death Grantor trust Similar to Family Living Trusts And yet, has significant differences Pass-thru entity Disregarded entity
  • 5. Parties to the Title Holding Trust Trustor (Grantor or Settlor) Person/entity setting up the trust Beneficiary (Primary) Living Trust no present interest Title Holding Trust Present interest (controlling interest) Successor beneficiary No current interest in trust Future interest only Always name one if beneficiary is natural person (i.e. can die)
  • 6. Parties to the Title Holding Trust Trustee Exeter Fiduciary Services, LLC Has no discretionary authority Beneficiary must provide written authorization & direction for Trustee to act Power of direction General (unlimited) Specific (limited)
  • 7. Benefits of a Title Holding Trust Confidentiality/Privacy of Ownership Those concerned about litigation: Executives, managers, highly compensated individuals, etc. Investors, realtors, developers, contractors Those worried about privacy/stalking: Politicians, judges, law enforcement, celebrities, stalking victims Acquisitions/Negotiations Example: Walt Disney/Disneyworld
  • 8. Benefits of a Title Holding Trust Living Trust vs. Title Holding Trust Similar, and yet very different! Living Trust Trustee holds legal, equitable and beneficial interests of ownership Title Holding Trust Trustee holds only legal/equitable title Beneficiary holds beneficial interest Beneficial interest is personal property; not real property (very important)
  • 9. Benefits of a Title Holding Trust Avoids probate administration Avoids ancillary probate for out of state real property owners Easy succession of ownership Estate planning benefits No need to change current plans Integrates with existing trusts
  • 10. Benefits of a Title Holding Trust Ease of transferring ownership Partial distribution of property Easy to make gifts to kids or others Assignment of beneficial interest Considered conveyance of underlying property held in Title Holding Trust
  • 11. Benefits of the Title Holding Trust Protection against liens and judgments Co-owners of real estate Real vs. personal property interest Avoids clouds against title Death, Divorce, Bankruptcy Litigation, Settlements, judgments, Federal, State vs. local tax liens Income tax Property tax Avoids partition actions/charging orders
  • 12. Benefits of a Title Holding Trust Multiple beneficiaries Ease of administration Executing documents Purchase and sale agreements Loan documents Notes, deeds, etc. No registered agent for service Tax Considerations Pass-thru entity Disregarded entity
  • 13. Benefits of a Title Holding Trust Tax Considerations Pass-thru entity Disregarded entity Special Income Tax Strategies Section 1031 (tax deferred exchange) Section 1033 (involuntary conversion) Section 121 (tax free exclusion) Section 453 (installment sale treatment)
  • 14. Benefits of a Title Holding Trust Cost efficient Annual costs Title insurance premiums Privacy Purchases Sales Management Holding Negotiations Financing, refinancing
  • 15. Title Holding Trusts do NOT: Provide liability protection Minimizes risk of litigation No liability protection once sued Avoid taxes if otherwise due Income, capital gain, gift taxes Property taxes Avoid due on sale clauses Full or partial transfer Loan documents Avoid reassessment for property taxes
  • 16. Contributing Property into Trust Referred to as funding the trust Title Holding Trust should take title At acquisition, not later Otherwise provides only limited confidentiality/privacy True owner should never show on title Ensure all documents reflect Trustee Environmental indemnity agreement Evidence of insurance
  • 17. Beneficiaries/Power of Direction Primary beneficiary Successor beneficiary Power of direction Change or update at any time
  • 18. Financing Property in the Trust Many lenders will not lend while property is held in trust Conduit lenders Portfolio lenders Underwriting on Beneficiary Note and Deed of Trust executed by Trustee (Exeter Fiduciary Services, LLC) Beneficiary guarantees loan Beneficial interest pledged as collateral
  • 19. Management of the Property Very flexible Key factor is amount of confidentiality and privacy desired by beneficiary Acquisition Property management Leasing Selling Record Grant Deed, or Assign beneficial interest in Trust
  • 20. Role of the Trustee Legal vesting on public records: Exeter Fiduciary Services, LLC, as Trustee for THT No. XX XXXX No discretionary authority Written direction required Executing notes, deeds, leases, etc. Preparing Trustees certificate Corporate Trustee; not individual Trustee has no liability
  • 21. Are You Ready to Take the First Step in Protecting Your Properties? Set-up a complimentary consultation with one of our trust officers Follow-up email with links Copy of Power Point White paper with 24 benefits The Exeter Exchange Newsletter Follow-up survey Thank you for attending we look forward to helping you protect your properties.
  • 22. Exeter Fiduciary Services, Inc. National Corporate Headquarters 402 West Broadway, Suite 400 San Diego, CA 92101 Office: (619) 615-4210 Toll Free: (866) 393-8370 Facsimile: (619) 615-4205 Email: wexeter@exeterco.com Website: www.exeterco.com