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TITLING  *  LAND TRUST  *  PROBATE

 

LAND TRUSTS

 

Real Estate Privacy (LAND) Trusts

 

    Advantages of owing real estate through a Real Estate Privacy Trust (Land Trust)

  • 1. Privacy of Ownership - Under a Land Trust arrangement, your identity as the legal owner of the real estate is not disclosed to the public or to any third party, except in cases of subpoena or court order.

  • 2. Ease of Transferability - The beneficiary (or "owner") of a Land Trust may be changed without recording a change in the public records.

  • 3. Avoids Probate - Probate is usually necessary regardless of whether or not one has a will. A Land Trust arrangement, however, allows you to designate succession of ownership exactly as you wish, thereby avoiding probate and costly, time-consuming proceedings relating to the property.

  • 4. Facilitates Multiple Ownership - Where there are multiple owners of a parcel of real estate, a Land Trust can be structured to provide for clear and easy legal direction.

  • 5. Retain Tax Advantage - You are still eligible for the homeowner's and senior citizen's real estate tax exemptions.

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1031FEC/1LessTax Property Exchange & Asset Tax Planning

 

Many owners wish to sell from management intensive property to fully managed and less risk foundation income property that is held for the step up basis allowing beneficiaries to sell with no tax.

 

Note to owners of real estate in different states may have estate and /or income tax for property in a state other than the state of residence that may have no estate (inheritance) tax or state income tax.

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Why is This Probate Taking So Long?

After a loved one dies, her/his money and property must be distributed to the right people, either according to her Will or the state’s default distribution scheme (found in its “intestacy” statute). While most people want the settlement process to be done ASAP, probate can take between 9 and 24 months. The time delays create unnecessary stress and expense, especially for families who need access to those accounts or property.

                                                             
 5 Reasons Probate Takes So Long

There are many reasons why the probate process takes so long. Here are five of the most common:

  1. Paperwork. Managing probate-required paperwork can be a monumental undertaking with structured timelines and court-imposed deadlines.
  2. Complexity. Estates with numerous or complicated accounts or property simply take longer to probate, as there are more items to be accounted for and valued.
  3. Probate court caseload. Most probate courts were dealing with high caseloads and limited staff before COVID-19, and it's worse now.
  4. Challenges to the Will. Heirs, beneficiaries, and those who thought they’d be beneficiaries, can object to and challenge the Will’s instructions and legal requirements. While state law dictates the length of the time period during which they must object, Will challenges can add years to the probate process. Some of the most common challenges include assertions that the Will maker was:
    1. Lacking testamentary capacity (i.e., lacking the legal or mental ability to make a Will)
    2. Delusional
    3. Subject to undue influence (wrongful pressure to do something they didn’t want to do)
    4. A victim of fraud
  5. Creditor Notification. The deceased person’s creditors must be notified of the deceased person’s passing and the probating of her estate so they have time to submit any legal claims for debts. This time period also varies from state to state, but it is generally four to nine months (three months in Florida). The bottom line is that, while most state probate laws are designed to keep the process moving along in a timely manner, that's more of a plan than a reality.

                                               Avoiding Probate with a Trust Is Better

Had the deceased person created a trust to hold her accounts and property, the long, complicated probate process could have been avoided. By creating and funding a trust, those accounts and property would no longer be viewed as being owned by the deceased person and would not be subject to the supervision of the court. Their distribution would be controlled by the instructions left in the trust agreement. Administering a trust instead of a probate is usually quicker –meaning that beneficiaries receive assets more quickly, costs are reduced, and stress levels are kept to a minimum.

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Each state requires a trust applicable for assets within the state.

Regardless of the unique benefits, the requirements for establishing an out-of-state trust are fairly simple: The trust must be legally created and administered in that state.

Establishing the trust can be done with a qualified attorney who specializes in trusts and wealth transfers in the desired state. Once engaged, this person will collaborate with any attorneys and other advisors working on the overall estate plan.

Administration may be handled by a company that’s located solely in the state or by a company with physical locations in many states

Why not a will or have no will to probate?

Living Trust Video

 

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