In California state, general trust law is in the quarantine law §§ 15000-19403. In California there are the Illinois State Land Trust Act (765 ILCS 405/410/415/420), the Massachusetts State Business Trust Act (MBLc 182,2,2), the Virginia State Land Trust Act (Va. Code 55-17.1).
Therefore, land trusts created in California for California real estate are based on the general trust laws of the California certificate code above. However, in order to utilize the more informative laws and case laws of other states, an out-of-state land trust that possesses rights through California property trustees may be formed. In fact, Air Power, Inc. v. Thompson, 244 Va. 534, 422 SE 2nd 786 (1992) Virginia Supreme Court, Va. Code Sec. 55-17.1 gives both the legal and fair authority of the real estate to the trustee of the land trust that protects the privacy of the beneficiary.
Actually, since there are no specific land trust laws in California, there is no legislative history nor case law for California state general trust law and case law only. However, the general trust law may have several advantages that have more requirements than certain land credit standards. In fact, the Illinois State Land Trust Act (75 ILCS 435) requires direction holders to bear fiduciary duties to beneficiary holders. California's general trust law has no similar requirement.
Either way, avoiding the real thing's will in the trust of the land takes precedence over all the difficulties of that creation.
I. California State General Trust Act:
A. Creating trust:
California Probate § 15000 states that "(t) his department (part 9 of the verification code) is known and can be cited as a trust law." § 15001 (a) shall be interpreted as "(e) as otherwise provided by law: this department applies to all trusts whether or not it was created before July 1, 1987 It will be.
Among the methods of other trusts, the trust is (a) a California certificate code subject to (a) the owner transferring to another person during the lifetime of the owner. "A trust is created only when there is trust property" is based on § 15202 of that.
Based on that § 15203, "You can create a trust for purposes that are not illegal or public policy." Land trusts are not for illegal purposes and are not contrary to California's public policy, but are generally not used in this state.
Also, "A trust other than a charitable trust is created only when there are beneficiaries" is based on § 15205 of that.
B. Real Estate and Personal Property Trusts:
§ 15206 states that "a relationship with real estate is not effective unless it is proved by either of the following methods", so that it does not violate the fraud law enforcing written certificates . (B) The bidder can tell the trust properly signed, or if the bidder is permitted in writing, the bidder can tell the agent.
And under that 15207 (a), "the existence and conditions of oral credit of personal property can only be established with clear and compelling evidence." Under § 1528, "consideration is not necessary to create a trust ..."
Finally, trusts created based on this chapter that refers to real estate (Part 1, Part 2, Part 9) are recorded in the county recorder office in the county, and all or part of the real estate § Under § 15210 ".
II. Land Trust Dynamics:
A. Advantages and Benefits:
(1) Privacy:
One of the announced advantages of many of the land credit is that trust asset trust certificates of trust property under the name of another trustee (private or institution) may be recorded in the County Recorder, but Trust / Settler / The names of investors and beneficiaries are not recorded.
Thus, the creator / transferee of the land trust: the trustee / bidder who is planning the real estate, as well as the name of the recipient, the county recording office and the county assessment institution 39, s books, and to some extent the public Hide the investment from the view.
However, the trustee / trustee or the judge creditors of the beneficiary can request the court that the court will respond to the written interrogation to determine the asset. Recorder and Assessor asset search
The land trust agreement can also use the name of the land trust different from the name of the trustee / bidder who created it. This is another advantage of asset protection. Also, if the beneficiary is the same trustee / bidder, the latter may designate a living trust or a fully owned limited company as a beneficiary to avoid gift tax problems.
(2) Avoid medical examination:
In addition, the successor beneficiaries may also choose to avoid discontinuation of distribution of trust assets at the end of the trust, other than outsourcing procedures so that successor trustees are designated in the land trust contract.
Land trusts may be created as revocable (contract terms may change) or irrevocable (unmodifiable), but a separate tax return is required for the declaration, Personal tax rate unless it is regarded as a simple trust that all incomes created are taxed to beneficiaries. In the federal income tax sense, if the grantor / trustee is also a beneficiary, the Internal Revenue Service (IRS) classifies it as a tax obligation that flows directly into the form 1040 of the tax return form and the state declaration.
(B.) Disadvantages and Pitfalls:
(1) Split contract for each property
You can own only one real estate to keep the investment or trading privacy and the benefits of asset protection of the land trust. Therefore, different land trust contracts are created for each property. This may be troublesome, but you can attach the same contractor / trustee, trustee, beneficiary to each contract.
(A) Simpler choice:
A simpler option is to purchase investment or rental properties through a limited partnership (LP) or limited liability company (LLC), or a more flexible living trust that does not require the submission of a separate tax return To the trust that lives, not the profit of LLC (not the title of the property right).
Also, LLC can create confidence in the land by telling the trustee the property ownership and designing himself as a beneficiary of ownership privacy. Sometimes there is nothing more. In fact, creditors can appeal in anticipation of avoiding execution of asset decisions through asset protection schemes. Also, there is a possibility that the tax will be assessed by the transfer of ownership.
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