By Randy Hughes, Mr. Land Trust
Our modern world is fraught with dangers and potential liabilities for the real estate investor who just wants to work hard and build an estate for his/her family. Learning how to conceal assets and appear poor should be the goal of all hard-working entrepreneurs. America’s legal system has run amok and if you do not concern yourself with asset protection you are doomed to fall prey to the 21st century terrorist…the contingency fee lawyer (and his/her client).
An interesting and not well understood fact about Land Trusts is that they do not have to be formed in the same state where the property is located (or where the beneficiary resides). Like the founding fathers intended, Land Trusts have been left to each state to develop how to rule on the use of them. There is no Federal Land Trust law. Only a few states have a Land Trust Statute (most have only case law supporting the use of Land Trusts from other states), but all states recognize some form of title holding trust. In this article, I will discuss the Virginia Land Trust Statute and its unique benefits to the real estate investor.
The English Statute of Uses was repealed by the Virginia General Assembly in 1792, thereby eliminating one of the hurdles to land trust validity. But in 1819 the legislature enacted a limited Statute of Uses which applies to declarations of trust in which the trustee has no duties whatsoever. Since Land Trusts are usually drafted requiring the Trustee to do something, even if only accepting property and deeding it out, this is all it takes to get around the limited Statute of Uses.
Land Trusts in Virginia work exactly like those in Florida and Illinois. 55-17.1 of the Code of Virginia spells out the modern-day interpretations which incorporates all these attributes. 58-77 (2) of the Virginia Code confirms that a trust is not taxed as a corporation. And, 8.01-81 et seq. of the Virginia Partition Statute verifies that the remedy of partition cannot be used by one beneficiary against another. Furthermore, there is no transfer notification requirement nor a requirement to disclose the beneficiary (as some states have).
Note: Virginia Land Trust Law (Virginia Code 55-58.1) requires an in-state Trustee. Therefore, if you are forming a Virginia Land Trust to hold title to property in any other state, you need to have a Virginia Trustee. I do not like this requirement because although I prefer my trustees located in the same state as where I am forming my trust, it is nice to have the option to use someone from another state.
So, how do you form and out-of-state trust to hold title to the property in your state? And, where can you find a trustee from another state to serve as your trustee? These are good questions for the concerned real estate investor who wants to protect his/her hard-earned assets. You will find the answers to these and many more of your questions at: www.landtrustsmadesimple.com
I encourage you to learn more by going to my FREE online training at: www.landtrustwebinar.com/411 and text “reasons” to 206-203-2005 for my free booklet, “Reasons to Use a Land Trust.” You can also reach me the old fashion way by calling me at 866-696-7347 (I actually answer my own phone unlike most other businesses in America today).
Randy Hughes, Mr. Land Trust
If you want to learn more about the wonderful world of trusts, please go to: www.landtrustsmadesimple.com for more information. Or, if you would like to attend one of my FREE Land Trust Webinars, go to: www.landtrustwebinar.com/411 Also, feel free to call me with any questions. I actually answer my phone! 1-866-696-7347