Land Trust vs LLC to Hold Property
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Land Trust vs LLC to Hold Property


Hi. Lee Phillips. I want to talk to you
about an issue that comes up quite often I deal with a lot of real estate
investors and as an attorney they always ask me the question Should I use a land
trust to hold my investment property and should I have an LLC? Should I have a corporation? Should it be in my own name? What do I do in order to protect my
investment property? I’m going to talk about basically should I put it in the land trust
or should I put it in an LLC You could put it in a corporation if it
were taxed under subchapter S of the IRS code. You will never have real estate in
a corporation taxed under Chapter C of th IRS Code. A C corporation? The answer’s
no. Maybe an S corporation. But the LLC will give you better asset protection.
It has charging orders and we’ve got YouTubes on what is a charging order. The Land Trust, however a lot of people, a lot of gurus say, oh use the land trust The primary issue of the Land Trust is anonymity and I’ve talked about anonymity
in some of the YouTube vidoss but the Land Trust does not give you any
asset protection and if you back the guru’s into the corner they will say Yeah, it doesn’t give you any asset protection. It doesn’t matter whether you make your LLC the beneficiary or what it does the Land Trust doesn’t give you any asset
protection end of discussion. Period. It’s a revocable trust. So do you put it in the Land Trust or the LLC? I would use an LLC. No, it gives you no anonymity, But it does give you legal asset protection through the corporate shield and through the charging orders and we’ve discussed those, like I said, in
other YouTube videos. However, the Land Trust is easier. I don’t have to pay a state fee I don’t have to register anything I don’t have to do anything just have the Land Trust and title the property. Additionally, the LLC has maintenance. You have to hold your meetings and file your state papers every year and do all this sort of garbage. Land trust? No maintenance. The state fees I kind of alluded to, no state fee in a land trust. State fees with LLCs. California, New York, New Jersey
“them foreign countries” they’re expensive. Every year $850 bucks
in California. So I’ve actually recommended to some people in California let’s use the land trust. Use your land trust, it’s gonna save you a lot of money, and take that money, take that 850 bucks add it to your property casualty umbrella your insurance policies and you will get better asset protection in all likelihood So yeah, do I use land trusts.
Not usually. Are they bad? No. But on the other hand they’re not always what they’re cracked up to be when you talk to the gurus about land trusts. So I would lean towards the LLCs if possible That’s Lee Phillips’s opinion. And I have very good friends who are gurus that use land trusts and we argue about it toe to toe but my thoughts on it anyway.

9 Comments

  • County Secession

    There are many reasons to use a land trust beyond just liability protection. I've used it many times to divide up ownership among partners, some using LLCs/corporations/individual names. And also if a partner sells out, it's easy to change the beneficiaries of the trust without having to record a deed. I love the flexibility of land trusts, and I don't see any reason not to use them.

  • arturo mendoza

    Hello hey I just become a Scriver get a day have a question about some legal stuff supposedly I have got some money and it's sitting in a bank but you want it or is it some kind of fee for getting money from another country is some kind of fee and they give me so many days to paper like egg told him that I have money

  • John Ritchie

    Yea but charging orders differ from state. Also you can't save money on taxes of selling your home with llc.

  • John King

    Do you have an email address I can reach out to in regard to setting up asset protection structure for my rental properties?

  • Lee Allen

    Why not create your own trust to hold the title and use an LLC as the beneficiary. If you create the trust it cannot be revoked unless you wanted to revoke it. With the Trust and LLC combo, you get anonymity and the LLC corporate shield. Definitely make sure the property is covered by insurance in case the LLC corporate veil is pierced.

    Another reason that I like using a land trust and LLC combo is that I don't create a nexus. Many investors that I know own 100+ properties in older low-income neighborhoods and they don't want to get sued and lose all of their properties just because some corporate formality wasn't done.

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