Real Estate For Profit Illinois, Florida & California - Real Estate Land Trusts Forms, Agreement, Books & Seminar
On Sale
HomeShop OnlineAsk Mr. Land TrustAffiliates ProgramAbout MeLand Trust CalendarLand Trust Blog  

Go Back

How hard is it to find out who the beneficiary of a Land Trust is?

by Randy Hughes, Mr. Land Trust on April 03, 2008

One of the many benefits to putting your property into a Land Trust is the privacy aspect. In other words, you can control property through the Trust without your name showing up in the chain-of-title (at the court house). Many people, for a number of reasons, do not want their business known or their activities tracked. You are less of a target for a lawsuit if you stay out of the "Recorders" office publications.

So, how effective are Land Trusts at keeping their beneficiaries confidential? The key is the Trustee. First, if you are trying to sue a Land Trust you must first serve the Trustee. This may be difficult to do if your Trustee is out-of-state and has a last name of "Smith" (this is why we teach you to use out-of-state Trustees, with a different last name than yours and ONLY USE A P.O. BOX ADDRESS!).

Let us assume for illustration purposes that you find the trustee (a big assumption) and get him served. This means that you have initiated a lawsuit (hired an attorney) and paid to have the Trustee tracked down and served. These are big assumptions as the legal expenses would be hefty and you would probably have to hire your attorney on a contingency fee basis (think large...up front legal fees). Attorneys are not stupid. They know there is a difference between winning and getting paid. Therefore, without a clear to payment of their legal fees they will insist upon advanced payment of their fees.

For the sake of argument, the assumptions above will lead the Plaintiff and his/her lawyer to interrogatories. These are legal procedures that follow the filing of a lawsuit and involve questioning of all defendants in the lawsuit. The purpose of the interrogatories is to find out information that can be used against the defendant in the lawsuit. In this case, the purpose of the questioning would be to find out the name of the beneficiary of the Land Trust (so the lawsuit can be amended to include the beneficiary).

If the Trustee refuses to "give up" the name of the beneficiary, the Plaintiff's attorney would have to file a motion with the court to force the Trustee to divulge the name of the beneficiary based upon the Trustee's failure to comply with the discovery request (the interrogatory). The judge hearing the case would then have to rule on the motion and decide if the Trustee has the right to remain quiet. The judge will decide this motion based upon the need for privacy (the right to privacy) of the beneficiary vs. the need to know who the beneficiary is to resolve the case.

As you can see, all the while this legal wrangling is taking place, the plaintiff is spending legal fees. If you have set up your Land Trust agreement and designated your Trustee properly, it will be a long time (and a lot of legal fees later) before the Plaintiff's attorney would get to the point of asking the Trustee under oath, "Who is the Beneficiary?"

Remember, YOU HAVE TO FIND THE TRUSTEE TO SERVE HIM/HER/IT!.

And we have not even scratched the surface of other defensive moves the Beneficiary could have made. For example, the Beneficiary of the Land Trust could be an "Agent for an undisclosed beneficiary." This means that once you force the Trustee to tell you who the beneficiary is, you will just find an "agent" for the ultimate Beneficiary. Or, the Beneficiary could be the Trustee of another Trust. Or, the beneficiary may have changed from the original beneficiary to a new beneficiary (oversees). This is a short list of the defensive possibilities.

The point here is that when you hear on the street that Land Trusts are old, outdated and not used anymore. Or, that Land Trusts have no benefits, you should question the knowledge and experience of who is telling you this. There is a lot of misinformation "out there" about Land Trusts. Learn all you can...it will set you apart from the crowd.

If you are interested in how the law treats this subject in the state of Illinois, go to the Illinois Statutes (735 ILCS 5/2-616 (e)).

www.realestateforprofit.com




Post a comment
Your Name:  
Email Address:    
Type your comment below  
 

 

Please enter the characters on the image in the text box below:

 

  


 

 

Home |  Shop Online |  Seminar Calendar |  Discussion Forum |  F.A.Q. |  About Me |  Contact Me |  Affiliate Program
Disclaimer |  Privacy Policy |  Return Policy |  Site Map

Site founded 2005 * All images and content Copyright Investment Seminars, LLC. 2014 © All rights reserved.