Why do real estate investors need to use land trusts (LT)? Let's be straight forward with this article. You have worked very hard to accumulate property for investment. You put yourself, your family, and your children's future at risk investing in real estate.
Do you realize that one false move with just one of your properties can cause you to lose all of your hard earned investments? One careless tenant can be injured on your property and the world will fall all around you. Ask yourself the following question “Can you control what is happening in all of your properties right now – this minute?” Is it possible that a careless tenant can be injured or die tonight in your rental property? This happens every day in America.
You need a LT for each property. You need to “insulate” each property from the others. You need the knowledge that your attorney doesn't have on this asset preserving technique. Why work so hard to have one uncontrollable tenant event cause you to lose all of your properties? Come on! You have worked very hard to build your asset portfolio. Why lose it now?
LTs are the first line of defense to insulate you from the millions of lawsuits happening in America every year. The most dangerous terrorist of the 21st century that you need to fear is the contingency fee lawyer! Do you want protection from the contingency fee lawyer or would you rather have a bare knuckle fight with him without any defense guards in place?
You have probably noticed that it is VERY difficult to find any information about LTs and how they operate. Most attorneys do not know how to set up and administer an LT (they receive only three hours…if any, of trust education in law school).
The problem is that most practitioners do not know how to set up and administer Land Trusts so many of them consequently advise people not to use them. You may have been told by someone (an attorney, accountant or friend) that you need a LT, but nobody told you how or where to find information to help you get started. The point here is do not trust someone who does not have direct active knowledge of LTs and their benefits.
I have been using LTs in my full time real estate investment business for over 30 years. I live and invest in Illinois (the Granddaddy state of Land Trust law) and use LT's in my business constantly. I have found that many times advisers tell their clients, “You cannot do that” with a Land Trust. Most of the time they are wrong!
I will submit some examples of what I mean in future articles.