|
Article source: http://www.kabish.com/. Used with authors permission.
An irate tenant or disgruntled home-buyer, with the help of a willing attorney, can readily prompt a property search for a property owner in public records. The target of the search becomes someone who has deep-pockets as reflected in real estate assets.
Land trusts are available in most states, though they differ in structure and extent of protection.
Land trusts are nothing more than a legal entity that hold title to a property. One of the advantages to a land trust is that the owner of record is not you!
A land trust is simply transfer of a property out of your name and placed into another entity. The land trust names a trustee to manage the trust, such as your lawyer, a friend, or relative with a different last name. The trust then owns the property, and your name is omitted from the ownership record (which is the deed or title).
But you still own the trust. You are the beneficiary of the trust.
Obviously, it is a little more complicated than that, but heres the bottom line. If Suzy Suehappy is aggravated with you for some reason and begins looking for your assets of record, she will have a hard time finding what you own if each of your properties are recorded in a separate land trust. Your properties would be listed under the name of the trust rather than yours. Your name would never appear in the records if each of your properties were held in the various names of your trusts.
If you owned 123 Main Street where Suzy Suehappy lives, and your name is John Lucky, Suzy might go to the county clerks office to ask for all the property that John Lucky owns. The search would be fruitless because your name could not be found. Suzy Suehappy would discover that the property is owned by 123 Main Street Trust (or whatever you wanted to name it). She would also find that no other properties are owned by 123 Main Street Trust.
But if habitual trouble-maker Suzy Suehappy has a problem with property owner Jane Notsolucky, and finds all of her property of record listings in Janes name, she has an easier target for a lawsuit.
If an actual suit is brought against you by Suzy Suehappy, her attorney can demand in deposition a listing of all your property. However, in preliminary discovery efforts by Suzy or her attorney in perusing the county clerk records, maintaining anonymity can be an advantageous deterrent in asset protection.
Once I had a tenant who stumbled onto the staircase landing of his second-story apartment house while drunk, broke the rail, and fell to the ground with some minor injury. He approached a prominent sue-crazy lawyer in town about his case, but I was fortunate not to face an expensive defense of myself because I was not high-profile in the county records. I assume that a review of the records did not disclose my personal name on real estate properties, and I was considered to have no recorded real assets.
Asset protection has to be a concern of real estate investing, and the use of land trusts might be a consideration. I find, however, that few attorneys understand land trusts, and need education in this specialty of the law. Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/
He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director. To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.Real--Estate--Course.com/nomoneydown/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online Academy of Advanced Real Estate Investing Techniques at http://www.AAREIT.com/
|
