What Is the Difference Between a Living Trust and a Land Trust? #AskAttorneyP
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4 سال پیش
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⚠️ GENERAL INFORMATION! NOT LEGAL ADVICE! 🙅🏾♀️
~ Short Answer ~
I’m going to start with the short answer. Now, I am warning you that the short answer is not going to make any sense. It’s going to sound like I’m throwing a bunch of vocabulary words at you. But I promise I’ll try to clean things up with the long answer. Just strap in, and trust me. Here we go.
In both living trusts and land trusts the trustee holds the property for the benefit of the beneficiary according to the terms of the trust agreement. Depending on the type of trust you choose, the trustee’s interest in the property defined differently and the beneficiary’s interest is in the property is defined differently.
This causes living trust and land trusts to be treated differently, at least in in jurisdictions that recognize land trusts.
~ Legal Terms ~
I don’t think the short answer is very helpful. But before I can give you the long answer I need to give you some definitions to lay a foundation. So let’s get into the definitions!
👩🏿 Trustee - Person(s) who manages the trust assets on the behalf of the beneficiary.
👶🏿 Beneficiary - The person(s) who benefit from the trust assets.
🧑🤝🧑Trust Agreement - The contract between the trustee and beneficiary. Basically it tells the trustee what to do.
📜 Legal title - Actual ownership of land
🏠 Equitable Title - A beneficial interest in the land
📱 Personal Property - Chattel (cell phone)
🏠 Real Property - Houses, apartments, condos, land, etc.
🏘️ Living trust - Generally used to hold both real estate and personal property.
🏖️ Land trust - Generally used to hold real estate.
🇺🇸 Jurisdiction - Think States. Some recognize land trust while others do not.
~ Long Answer ~
First, I want to explore the similarities.
Both a living trust and a land trust is essentially a contract between a trustee in a beneficiary that requires the trustee to manage the property on behalf of the beneficiary.
So, on the surface they function very similarly.
The beneficiaries get to benefit from the asset. They may get to live in the house. In which case their benefit is living in the house. Or they may be renting the house. In which case their benefit is rent money.
The trustee has to perform his duties outlined in the trust agreement. In land trusts, the trustees duties are generally limited to “ministerial tasks” such as signing legal documents. In living trusts, the duties of the trustee generally entails stewardship and managing the assets. This is because in land trusts it’s common to use an attorney as the trustee whereas with living trusts the trustee is often the beneficiary or someone that is taking care of the beneficiary.
So, now onto the major differences between a living trust and a land trust.
As I stated in my definitions, land trusts are used to hold just real property but living trusts are used to hold real and personal property. But to illustrate the difference between the two for the rest of my explanation we’ll be using the living trust solely to hold land just like the land trust.
In a living trust, the trustee holds legal title to the land and the beneficiary holds equitable title. And the beneficiaries interest is considered real property.
In a living trust, the trustee holds both legal and equitable title to the land and the beneficiaries right is considered personal property.
Let me highlight those differences in case you didn’t catch it.
In a living trust. The trustee holds just legal title. In a land trust the trustee holds legal and equitable title. In living trust the beneficiary holds equitable title. And the interest is considered real property. In a land trust the beneficiary does not hold any title. And their interest in the property is considered personal property.
This purportedly (more on that later) gives land trusts some benefits over living trusts, particularly in jurisdictions that recognize land trusts.
I go into those benefits but for that rest you gotta watch the video! :)
If you have any questions that you would like to consider for the #AskAttorneyP series you can submit a question at the link below.
https://tpf.legal/ask
📖Book Me 👉🏾 https://tpf.legal/lawyer
👷🏿My Services 👉🏾 https://tpf.legal/services
👥Planlord Facebook Group: Facebook: planlord
📷Instagram 👉🏾 Instagram: pendergraftfirm
👛Bigger Pockets 👉🏾 https://www.biggerpockets.com/users/p...
🦸🏾♂️ Attorney P's Bio 👉🏾 https://tpf.legal/attorney
⚠️ GENERAL INFORMATION! NOT LEGAL ADVICE! 🙅🏾♀️
~ Short Answer ~
I’m going to start with the short answer. Now, I am warning you that the short answer is not going to make any sense. It’s going to sound like I’m throwing a bunch of vocabulary words at you. But I promise I’ll try to clean things up with the long answer. Just strap in, and trust me. Here we go.
In both living trusts and land trusts the trustee holds the property for the benefit of the beneficiary according to the terms of the trust agreement. Depending on the type of trust you choose, the trustee’s interest in the property defined differently and the beneficiary’s interest is in the property is defined differently.
This causes living trust and land trusts to be treated differently, at least in in jurisdictions that recognize land trusts.
~ Legal Terms ~
I don’t think the short answer is very helpful. But before I can give you the long answer I need to give you some definitions to lay a foundation. So let’s get into the definitions!
👩🏿 Trustee - Person(s) who manages the trust assets on the behalf of the beneficiary.
👶🏿 Beneficiary - The person(s) who benefit from the trust assets.
🧑🤝🧑Trust Agreement - The contract between the trustee and beneficiary. Basically it tells the trustee what to do.
📜 Legal title - Actual ownership of land
🏠 Equitable Title - A beneficial interest in the land
📱 Personal Property - Chattel (cell phone)
🏠 Real Property - Houses, apartments, condos, land, etc.
🏘️ Living trust - Generally used to hold both real estate and personal property.
🏖️ Land trust - Generally used to hold real estate.
🇺🇸 Jurisdiction - Think States. Some recognize land trust while others do not.
~ Long Answer ~
First, I want to explore the similarities.
Both a living trust and a land trust is essentially a contract between a trustee in a beneficiary that requires the trustee to manage the property on behalf of the beneficiary.
So, on the surface they function very similarly.
The beneficiaries get to benefit from the asset. They may get to live in the house. In which case their benefit is living in the house. Or they may be renting the house. In which case their benefit is rent money.
The trustee has to perform his duties outlined in the trust agreement. In land trusts, the trustees duties are generally limited to “ministerial tasks” such as signing legal documents. In living trusts, the duties of the trustee generally entails stewardship and managing the assets. This is because in land trusts it’s common to use an attorney as the trustee whereas with living trusts the trustee is often the beneficiary or someone that is taking care of the beneficiary.
So, now onto the major differences between a living trust and a land trust.
As I stated in my definitions, land trusts are used to hold just real property but living trusts are used to hold real and personal property. But to illustrate the difference between the two for the rest of my explanation we’ll be using the living trust solely to hold land just like the land trust.
In a living trust, the trustee holds legal title to the land and the beneficiary holds equitable title. And the beneficiaries interest is considered real property.
In a living trust, the trustee holds both legal and equitable title to the land and the beneficiaries right is considered personal property.
Let me highlight those differences in case you didn’t catch it.
In a living trust. The trustee holds just legal title. In a land trust the trustee holds legal and equitable title. In living trust the beneficiary holds equitable title. And the interest is considered real property. In a land trust the beneficiary does not hold any title. And their interest in the property is considered personal property.
This purportedly (more on that later) gives land trusts some benefits over living trusts, particularly in jurisdictions that recognize land trusts.
I go into those benefits but for that rest you gotta watch the video! :)
If you have any questions that you would like to consider for the #AskAttorneyP series you can submit a question at the link below.
https://tpf.legal/ask
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در تاریخ 1399/09/05 منتشر شده
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