By Jonathan Feniak, Esq., MBA
All Colorado trusts represent a legal agreement between the person who forms the trust, called a grantor, the person who manages the trust, the trustee, and the person who benefits from the trust, the beneficiary. When the grantor transfers property to the trust, title to the property is effectively split into two parts: legal title and equitable title. Legal title rests with the trust under the control of the trustee, and equitable title, or the benefit that come from the property, resting with the beneficiary.
In a trust, the grantor, trustee, and beneficiary can be different people or legal entities, but they can also, and this is the interesting part, be the same person. A trust's ability to divide up title and assign different roles, responsibilities, and benefits are what makes trusts a powerful estate planning and asset management tool.
Land trusts are a very powerful anonymity and asset protection tool for those who own real estate. A land trust, unlike a state-regulated corporation, LLC, or limited partnership, is not registered with the state. This means that the owner of a land trust can remain anonymous. In addition, when the beneficiary and trustee of a land trust are LLCs, the land trust can limit the owner's exposure to liability. Using a land trust to hold title to your real estate can help you enjoy anonymity, privacy, and liability protection.
Setting up a land trust, beneficiary LLC, and trustee LLC is not a difficult process, but it is a process that must people cannot do on their own. Our Colorado Land Trust package is priced to provide every land owner, not just wealthy land owners, with the benefits of a land trust.
We provide our clients with an affordable way to gain the anonymity and asset protection benefits of a land trust. Our $349 land trust package includes:
A land trust is a special type of revocable living trust. A revocable living trust is a trust created while you are alive that, as it sounds, is revocable, changeable, or terminable at your direction. So, a land trust is a trust that can be changed, altered, taken back, or terminated while you are alive.
You create a land trust by drafting a trust agreement that names a trustee and beneficiary and then transferring property into the trust by deed and recording the deed at the county clerk and recorder's office.
The deed is the only document that is ever reported with a land trust. The trust agreement is not recorded, and therefore, nobody but you and the trustee will know who the owner and beneficiary of the trust is.
The beneficiary of a land trust can be you, as an individual, or a corporate entity such as an LLC, corporation, or a limited partnership, or even another trust, which would give you even further anonymity, privacy, and protection.
This also applies to the trustee. The trustee can be you as an individual, or a corporate entity such as an LLC, corporation, or a limited partnership, or even another trust. Each of these entities or trusts will have, at the end of the day, you as the owner. Because the beneficial owner of the trust has never changed, only the legal entity which represents your ownership has changed, you are able own, control, and benefit from the property without creating tax consequences, while maintaining anonymity and reducing your exposure to liability.
Holding title to property in a land trust can provide you with several important benefits, including:
A handful of states have actually created statutes recognizing land trusts, also known as “Illinois Land Trusts”. In these states, notably Illinois and Florida, land trusts have been codified into law.
Unfortunately, Colorado is not one of these states. In Colorado, there is no actual statute governing land trusts. But, this doesn't mean that land trusts are not legal in Colorado.
In fact, support for land trusts in Colorado is implied by case law. What's more, Colorado title companies issue title insurance for and deal with transfers to and from land trusts, which are just a specific type of revocable living trust, on a regular basis.
If you own real estate and are concerned about your privacy or potential lawsuits and creditors, schedule a consultation with out experienced Colorado estate planning attorneys through the contact link on our website.Order Now