In California, the common law trust is in protest Code §§15000-19403. In California, there is no specific statute of the land trust, unlike the law on confidence in the land of Illinois (765 ILCS 405/410/415/420), the law of Massachusetts business trust (MBT) (MGLc182 Act, §2) and of trust law land of Virginia (Va Code section 55-17.1).
Thus, land funds established in California for a property in California, based on the common law of confidence in the aforementioned California Code of fun. But the outside the state land trust that will hold the right to the owner of the trustee power can be generated in California to take advantage of more favorable status and judicial practice of other staff. Indeed, the Supreme Court of Virginia in Air Power, Inc v. Thompson, 244 Va. 534, 422 S.E. 2nd 786 (1992) confirmed that Va. 55-17.1 gives the trustee of the land trust as a legitimate, fair and real estate property, protects the privacy of the recipients.
Indeed, as in California, there is no specific statute of the land trust, in this state no legislative history nor developed jurisprudence, only California general trust and judicial law. But the general law of confidence may have some advantages over the specific charter of confidence to the ground with large requirements. Indeed, the status of Illinois land trust (75 ILCS 435) requires that the owners of the leadership responsibilities are required to entrust the duties beneficial owner interests. California common law trust has no such requirements.
In any case, avoid probate of real estate in the land trust prevents all the difficulties in creating it.
I. General Law on confidence in California:
A. Building trust:
California Prabat § 15000 provides that "(t) his unit (section 9 Kabatavoga Code) must be known and may be referred to the law on the road." And § 15001 (a) states that "(e) xcept, otherwise provided by statute: This section applies to all trusts, regardless of which were created before, after or after July 1, 1987".
Among other ways to build confidence, trust can be created: "(b) (a) the transfer of ownership of property during the life of the owner of another person as trustee" in paragraph 15200 (b) of the California Code of Prabat. And "trust is created only when there is trust" under § 15202.
"Trust can be created for any purpose that is not from the & # 39 is illegal or against public policy," under paragraph 15203. The land trust is not of & # 39 is unlawful purpose and not against public policy in California, although in this state it is not widely used.
And "trust but charitable trust is created only if there is the exempt" in accordance with paragraph 15205.
B. Confidence in real estate and personal property:
In order not to violate the Charter of fraud, which requires that a written document was enforceable, §15206 states that "the trust relating to real estate is not valid unless it is confirmed by one of the following methods: (b) a written document of trust transfer properly signed by settlers or agent of the settlers, if permitted in writing. "
And in accordance with paragraph (a) of this paragraph 15207, "(t) his existence and terms of an oral trust personal property can be set only by clear and convincing evidence." In accordance with paragraph 1528 of the "consideration is not required to create trust …"
And finally, "the trust established in accordance with this Chapter (1 part 2, section 9 Prabandskaga Code), which deals with real estate, can be recorded in the office of count recorder in the county where the whole or part of the property is under n. 15210.
II. Mechanics land trust:
A. The advantages and benefits:
One of the most popular benefits of a land trust is that the grant of power of attorney trust in the name of another trustee (private or institutional) can be recorded with the county recorder, but an agreement on the land trust, which indicates the name of the trustee / settler / investor and the recipient is not recorded.
Thus, the creator / the recipient of a land trust: Trust / settler who invests in real estate may keep your name, as well as the recipients name in the books of the district registrar and county assessors and to some extent conceal investment from public view.
But the lender solutions Trust / settler or beneficiary can subject the latter to respond to written interrogation about his / her property, or to the debtor's sworn affidavit to determine the property, rather than just relying on the county registrar and appraiser search assets.
An agreement on land management can also use the title to land, which is different from the name of the landowner / settler who created it. This is another benefit for asset protection. If the beneficiary of this with a & # 39 is also the same trastor / settler, he can assign it a living trust or a limited liability company wholly owned by, hoping to avoid the tax.
(2) avoidance of the ban:
Moreover, just as successor trustees may be appointed in the contract for the land trust can also be selected by the beneficiary, the successors to avoid disturbances in the distribution of the trust assets at the termination of the trust, outside the trial.
The land trust can be created as a check (terms of the agreement are subject to change) or irreversible (can not be changed), but the latter requires the filing of individual tax returns and are taxed at a higher rate than the individual tax rate of the trust / settler. If not considered a simple trust in which all income is taxed by benefits. As regards the impact of federal income tax if grantadavets / trastar also & # 39 is the beneficiary, the Internal Revenue Service (IRS) classifies it as a trust sub & # 39 object that has tax implications, which go directly to the Form 1040 Trust and the declaration of the state.
(B) Disadvantages and pitfalls:
(1) share agreement for each property:
In order to maintain confidentiality of investments or transactions and the protection of the land trust's assets benefits can be transferred to only one property stored in it. Thus, for each property creates a different agreement on the ground. It can be cumbersome, although in each agreement may be given the same trastar / settler, the trustee and the beneficiary.
(A) is a simpler alternative:
Simpler alternatives to the & # 39 are the acquisition of the investment or rental property through a limited liability company (LP) or a limited liability company (LLC) or the transfer of these properties to a more flexible living trust, which requires filing separate tax returns or transfer of ownership the interests of the company (not the property name) on the living trust.
Ltd. can also create a land trust, custody transfer the right of ownership and assign yourself (LLC) as the recipient of Privacy property. Sometimes less is more; in fact, creditors can see and handle the request to avoid the execution of court decisions on property assets through the protection circuit. And the transfer of ownership of property can result in a tax assessment.