Land trusts (LT) have been used in the United States for more than 100 years, mainly for ownership privacy. Many people want to possess real estate without general knowledge for various reasons. Perhaps they think that they are celebrities, politicians (President Obama owns his house in LT in the suburbs of Chicago) or an individual who does not want to inform the public about his private business. Such a person may also be afraid of anger of dissatisfied tenants, vendors, or build inspectors. In addition, if it is generally known that the wealthiest men and women in the town possess local rental property even though the rent increases even though the maintenance request is different,
Since ownership of property ownership is public information, many real estate owners and real estate investors give interests of real estate investment to LT. The trust of the land holds the name of the trust property and the name of the trust itself. The beneficiaries of LT are not open to the public and are listed only in the trust contract (unrecorded contract between trustee and beneficiary). A beneficial owner can be an individual, a corporation, a limited liability company or another trust. As a result, true beneficial owners may be buried deeply for privacy and protection of property (there is no document on the public record indicating true ownership and control).
A beneficial interest holder of LT is responsible for what happens with respect to real estate held within the trust. Therefore, most real estate investors will own beneficiary rights through another entity (company or limited liability company). Unfortunately, some LT beneficiaries try to conceal their ownership carelessly to avoid conflicts of interest or building code violations. Consider, for example, Chicago Alderman Thomas Keane, a corporation that acquired a valuable parking lot that owns O & Hare International Airport and possessed interests through land trusts. He did not reveal his ownership when voting to give a contract (the secret of a land trust - perhaps not a secret, see 23 DePaul L. Rev. 509, 511 n. 10 (1973)).
Technology to use LT to hide ownership has been raised to art form in Cook County, Illinois. It is estimated that more than 90% of real estate owned by Cook County holds credibility of land.
So why is it important to record the name of the individual or the title to the manager of the LT? Everyone who possesses property publishes some document which records his / her interests. Otherwise, the risk of the previous owner's selective buyer or creditor depriving the current claimant of their ownership is high. However, the recorded title does not need to distinguish between personal names, and there is no need to identify him / her in some way. Instead, nominees, corporations, trusts or other organizations can intervene as legal voters. Relationships with valuable stakeholders may be represented by private recorded documents that are not disclosed to anyone if the court's order or discovery process is not established.
Is it immoral to reveal the real identity of real estate management parties? Some people say "yes", but if you own real estate with your own personal name and experience some of the inherent legal risks, understanding of those who do not want to own titles by personal name It will deepen. Ownership of real estate is risky, sometimes accompanied by excessive harsh risk. Real estate owners should be responsible for taking responsibility (ie, observing building standards and meeting minimum housing standards, etc.) but it is subject to unforeseen court costs lawyers and other mild legal attacks It should not.
In addition, some real estate investors are concerned about living infringement by federal and state governments (Reader: Patriot Act). Since it is not necessary to bulle out specific property property details about IRS 1040, holding the real estate in LT will protect the investor's name from all municipal, state and federal databases.
Since land trusts are not registered at the state or federal level (unlike limited liability companies - LLC and companies), real estate owners (land, improved real estate, commercial building residential buildings, real estate options, real estate Contract etc). Yes, LLC and companies provide more direct asset protection benefits, but Land Trust provides ownership privacy and indirect asset protection benefits. Therefore, it is best to combine Land Trusts, LLC & Corporations for the best of both worlds.
Real estate investors create a unique structure with symbiotic interests by constructing land trusts with LLC or Corporation as useful. For example, changing the ownership of the beneficiary right (possessed by LLC) will effectively change the owner / control of the title holding the LT without advertisement or knowledge. Not only is this a deep private transfer of ownership and control, but the tax authorities get out of the loop and save considerable taxes.
Some theorists offer 'public interest' by asserting that real estate should be owned by individual name, and responsibility for owner's occurrence in real estate (person and state responsibility) I can argue that you can. At the federal level, we may refer to two laws of information law of freedom of information (1976) and privacy law (1974). This is an individual's name, not a trust, but by law # 39; s).
For example, in Arizona State, the fear of organized crime encouraged the legislature's action (New York Times, 30th March 1976 20 column 4). As amendments to record laws and regulations, the AZ Parliament has enacted clauses requiring all assignments from or to trustees to include the names and addresses of those representing beneficiaries or beneficiaries. Under this law, however, it is unknown if another trust's trustee (ie, personal property trust), corporation, or nominee is informative and still comply with the law.
In the State of Illinois, the land trust law seemed to evolve from legislative concerns about slum housing problems and civil service corruption (as in the Thomas Keen case above). According to the 1963 law enacted in Illinois state, "Land trust beneficiaries are completely withdrawn within 10 days from the day of receiving notice or complaint of violation of the conditions and management of real estate affecting health and safety, The obvious intention was to force the disclosure of the "true owner" of the building code violation building. There is a penalty of $ 100.00 per day to not comply with the law, but there is no concrete procedure to force disclosure.
The main concern of Iowa concerning ownership privacy is the possibility of hiding non-resident property rights. Nonresidents are owner of 640 acres or more outside the legal framework of the town or city based on the laws of Iowa State (see Iowa and Federal Law, Foreign Property Rights under 47 Iowa L. Rev. 105) It may not have the right (Iowa Code Ann. 567.1). However, the prohibition on ownership of non-resident aliens in Iowa states "to acquire or retain ownership." It is unknown whether indirect ownership (ie, by a land trust or candidate) is forbidden. It is also interesting that there are no fines even if you violate Iowa's legal claims!
It is interesting that some states are trying to control LT information (and mandatory disclosure) that the statute is event based. The event that triggers disclosure is transfer to and from trust. There is no need to disclose the occurrence after transfer to the trust, such as useful change or modification of trust contract.
There is an inherent contradiction between those who want to own property personally and general interests (and some government agencies). It is true that some malicious individuals attempt to use land credit to avoid code requirements, tax revaluation, or expired clauses, but the majority do not. Most people who use the trust of the land do it with a good intention in mind. (Ie real estate planning, privacy issues, asset protection etc).
Certainly civil servants should not use land trusts to deceive the public (and building code violators must be held responsible), but in typical residential real estate sales transactions, the seller disclosure law, ownership Companies and lawyers (regardless of whether land trust is in use). Furthermore, the obligation to the property held in the trust of the land flows into the beneficiary. The LLC or other entity can become a beneficiary of the land trust, but ultimate responsibility is not avoided by using the land trust.
Since our American legal system has a lot of lawyers, lawyers have lots of information. Since there is no federal land trust law (state only), the possibility that legitimately LT beneficiaries will disclose information on their own property rights names or conditions is in most cases illegal.
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