Thanks for sharing your experience, it is great to share in UA-cam so students can listen many times until they comprehend the process. Great teacher! Thanks!
You are referring to the "doctrine of merger" and it could be an issue depending the state where the trust is formed but many times this is not an issue if you name a successor trustee. Further, when the trust is created the grantor is not the trustee.
Hi Clint, i am in IL, when forming a local LLC to own the rental property, for anonym purpose, which address should be used as Principal office Address?
Maybe I’m oversimplifying this... but let’s say you want to form a land trust that is owned by an LLC (in FL for example) but want to avoid due on sale clause on mortgage. And let’s say that the LLC is member managed by a WY LLC that is anonymous... can’t you just make the FL LLC the Trustee with you as the beneficiary. Then assign beneficiary over to LLC after deed is recorded. Since beneficiaries are not listed on deed you can maintain anonymity. So long as you are the Manager of the WY LLC who owns the FL LLC you will be able to sign for the sale of property, maintain anonymity, and not have to keep up with so much paperwork
Yea this is what I was saying watching the video. There is no point in doing all those assignments of trustees if you just use a WY LLC as trustee from the beginning. @RealEstateAssetProtection
Clint: So if one has a mortgage loan, one would have to first need to establish a LT naming the mortgagee as both the trustee & beneficiary, then record it (to avoid DOS). The LT would name the WY LLC as the successor Trustee so once the LT is recorded, a Trustees Deed is subsequently recorded naming the WY LLC as the Trustee. Now seller can close without any issues with Title. Correct? Would you advise on this strategy in lieu of using a nominee individual as trustee? It seems to have less paper work this way. Thanks!
I don't think you need to use your name as the trustee when you set up the LT to avoid the DOS. I like to use the WY LLC as the trustee from the start. I recently posted a video on who should be a land trust trustee.
You will sign as the manager of the LLC when selling out of an LLC. You will prove ownership by the operating agreement and the buyer may look at the secretary of state's website to validate your position within the LLC.
If one were to purchase a property with title held initially in a LT with a nominee Trustee, how would one be able to refinance the property under the beneficiary's personal name using traditional financing? Would the lender require that the Trustee be owner/bene or should a Trustee's Deed be recorded showing the beneficiary as the appointed Trustee, prior to obtaining a lender?
How about initially set up a land trust with Wyoming LLC as initial trustee?
Yes absolutely. I have a video on who should be the trustee of your land trust.
Thanks for sharing your experience, it is great to share in UA-cam so students can listen many times until they comprehend the process. Great teacher! Thanks!
Glad it was helpful!
Since so many law students and lawyers do nit have opportunity to learn and understand the process, your sharing is very helpful! Many thanks! 🙏👍
So if buyer is buying Investment property then should buyer put funds in land trust with Wyoming LLC as trustee?
Yes that is one way to set up the structure with anonymity.
Can being a trustee of your own trust invalidate the trust itself as beneficiary and trustee are the same?
You are referring to the "doctrine of merger" and it could be an issue depending the state where the trust is formed but many times this is not an issue if you name a successor trustee. Further, when the trust is created the grantor is not the trustee.
Who signs on behalf of the Trustee WY LLC at closing? The member (or maybe manager?) of the WY LLC?
Depends on how the LLC was set up. If it is a manager managed LLC the manager will sign - if member managed then the members sign.
Hi Clint, i am in IL, when forming a local LLC to own the rental property, for anonym purpose, which address should be used as Principal office Address?
Use a virtual business address.
Thanks Clint.
Why not just use WY LLC as trustee at the beginning, instead of nominee trustee?
Yes that is an option. Check out my more recent land trust video.
Maybe I’m oversimplifying this... but let’s say you want to form a land trust that is owned by an LLC (in FL for example) but want to avoid due on sale clause on mortgage. And let’s say that the LLC is member managed by a WY LLC that is anonymous... can’t you just make the FL LLC the Trustee with you as the beneficiary. Then assign beneficiary over to LLC after deed is recorded. Since beneficiaries are not listed on deed you can maintain anonymity. So long as you are the Manager of the WY LLC who owns the FL LLC you will be able to sign for the sale of property, maintain anonymity, and not have to keep up with so much paperwork
Yes I have worked with many investors who use a WY LLC as their land trust trustee. Your scenario provides one additional layer.
Yea this is what I was saying watching the video. There is no point in doing all those assignments of trustees if you just use a WY LLC as trustee from the beginning. @RealEstateAssetProtection
Clint: So if one has a mortgage loan, one would have to first need to establish a LT naming the mortgagee as both the trustee & beneficiary, then record it (to avoid DOS). The LT would name the WY LLC as the successor Trustee so once the LT is recorded, a Trustees Deed is subsequently recorded naming the WY LLC as the Trustee. Now seller can close without any issues with Title. Correct? Would you advise on this strategy in lieu of using a nominee individual as trustee? It seems to have less paper work this way. Thanks!
I don't think you need to use your name as the trustee when you set up the LT to avoid the DOS. I like to use the WY LLC as the trustee from the start. I recently posted a video on who should be a land trust trustee.
well done
When you go to sell and you have it setup with an LLC, who/how do you sign for it? How do you prove who owns the LLC?
You will sign as the manager of the LLC when selling out of an LLC. You will prove ownership by the operating agreement and the buyer may look at the secretary of state's website to validate your position within the LLC.
But what if it is a Wyoming LLC where they can’t find the manager. How would you prove ownership.
Question: What type of LLC should the Wy entity be registered to do business as, in order for it to sign as the successor Trustee of a Trust?
It does not register as a particular business in WY. It is just a LLC
If one were to purchase a property with title held initially in a LT with a nominee Trustee, how would one be able to refinance the property under the beneficiary's personal name using traditional financing? Would the lender require that the Trustee be owner/bene or should a Trustee's Deed be recorded showing the beneficiary as the appointed Trustee, prior to obtaining a lender?
You would not. When you need to refi you must drop the anonymity.
Does this work in Toronto Canada?
No, land trusts pose problems for Canadian investors in Canada.
Dead on! I just went thru this in May.
So what's the point of anonymity if you are going to blow it at the end?
Cover yourself while you own it?
You are only covered while you own it.