In this episode of Coffee with Carl, attorney Carl Zoellner goes over land trust pros and cons in real estate investing.

 

There’s some confusion out there surrounding land trusts. So, let’s clear a few things up.

Land trusts are grantor trusts used as title-holding vehicles for properties. They have several different uses, including removing your name from title, preventing the churning of title, and avoiding or mitigating transfer taxes in some states.

With a land trust, you basically put your house in a box. When using this strategy, the name of the trust and the name of the trustee shows up on title.

Pros

For me, the biggest benefit of using land trusts is removing your name from title. When done correctly, using a land trust provides an extra layer of anonymity to obscure your ownership of that property. Be careful if you’re using debt to finance the purchase of property, however, because then land trusts won’t provide full anonymity.

Cons

That being said, land trusts do have downsides. Namely, land trusts do not provide asset protection.

When working with this strategy, my suggestion is to couple a land trust with a Wyoming LLC. Then, list your Wyoming LLC as the trustee of the land trust.

 

Watch as Carl covers the basic pros and cons of using land trusts.

 

Resources mentioned in this video
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Got an idea for a future Coffee with Carl? Send it to Carl at cwc@andersonadvisors.com.

 

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