Differences Between a Land Trust and a Living Trust

We’ve covered a lot of ground in recent posts, focusing on important tools you can use to protect your real estate investments. A land trust can be a great option if you want to maintain control over property and transfer ownership of your property without exposing that information to the public. We help clients set these up and understand there’s often confusion between the many different types of trusts.

Estate planning can be a complicated subject, especially for people who own multiple properties and want to secure them all. Land trusts are not the same thing as living trusts. It’s important to understand the differences – because you can hold property in a living trust without fulfilling the same goals as a land trust.

Land Trusts Have Asset Limitations

The title “land trust” should make this fairly obvious, but you will only be able to hold real estate and related assets under a land trust. Land trusts exist for a reason and that reason is solely dedicated to holding real estate.

If you want to have one trust to cover multiple asset types, you will need to choose a different option. Living trusts don’t have those same limitations. You can hold many different types of assets within the same living trust or have multiple living trusts to hold assets as you see fit.

Living Trusts Don’t Provide Privacy

As mentioned above, land trusts allow you to own and transfer property without exposing those transactions to the public. It’s a benefit many real estate investors rely on because real estate investors can become targets for lawsuits from tenants, contractors and the general public.

The same benefit is not available within a living trust. While both living trusts and land trusts are revocable, the living trust does not provide the same anonymity available through land trusts.

Land Trusts Allow For More Control

This one may be the most important difference that attracts many investors and owners. In a land trust, the powers of a trustee and beneficiary can be dictated more than in a living trust.

Consider a situation where you own properties and move them into a land trust, naming yourself as the beneficiary and appointing multiple trustees. As the beneficiary of a land trust, you have more power over what the trustees can and can’t do than you would in a living trust. A living trust puts almost all the power in the hands of the trustee(s).

Navigating these legal challenges and choices can put a real estate portfolio of any size at risk. It’s important to work with an attorney you trust. At Bryant Taylor Law, we work every day with Florida real estate investors who want to get the most out of their investments. Schedule a consultation today and our team will work with you to come up with the best avenue to build and protect your investments.

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