You need a LT for each property. 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?
Here is a continuation of Land Trust Made Simple 101 Part 1 post.
Oftentimes lawyers recommend that the trust be named after the owner such as, THE JOHN DOE LAND TRUST and that the owner fill all the positions mentioned above. If your lawyer suggests this, get a different lawyer (preferably one that has actually studied Land Trust law longer than one hour).
Your director should be chosen as carefully as your trustee. Again, if you have developed friends that understand “the program”, you can all help each other and accomplish the privacy you are seeking. Once you begin to understand land trusts you will discover that you really do not even need to name a trustee when forming a trust. You can just give the trust a name (what's in a name?–see below) and “wing it” until such time as you need to deed the property back out of the trust. But, this is a whole other subject too lengthy for this report.
Again, your director should ideally be located in a different state (and use a P.O. Box address) than the rest of your “group.” If this is not possible at least select your director from another city than yours. All of these positions that we are discussing should have successors listed in your trust agreement to insure the orderly passing of power, according to your desires.
It is extremely important to keep the trustee and the director legally separate. The trustee should never do anything with the trust assets unless directed to do so by the director through a Letter of Direction. If you don't have confidence in a single director, you can create a Board of Directors. Thus you can require a majority vote before any action is taken (direction given to the trustee).
You might select some relatives and some non-relatives to serve as co-directors. Or you might put some of your heirs on the board of directors to initiate them into the world of land trusts (so they will be familiar with the subject matter when it is their turn to “take over the reigns”).
Whatever you do, be sure that you can trust your director(s) implicitly and select someone who is of a like mind as yours. If no such person is available to you, then you can be the director of your own trust. The appointment of a director is a private non-recorded act that need be publicized only when made necessary by an act of the beneficiary (you). So you can still retain control in a very indirect way.
Land Trusts Made Simple 101 will conclude in Part 3 of this installment.
We love your feedback and welcome your comments.
Please post below: