I have been telling people for years and years that they should put each property they own into a separate Land Trust so all properties are insulated from each other. There are many benefits to following this philosophy and this posting will discuss one of those benefits.

When you put a piece of real estate into a Land Trust any liens or judgments against the beneficiary do not attach to the property (unlike when a person holds title in their name directly). Furthermore, if someone tries to sue the Trustee of the Land Trust, they must first FIND the Trustee (all of our Trustees located are outside of the state in which the property is located, have different last names than the beneficiaries, and have listed P.O. Box addresses on the Deed to Trustee). If the Trustee cannot be found it is possible to sue the Trust via a publication in the newspaper in the county in which the property is located. But, this just adds to the trouble and expense of the plaintiff.

Unlike the LLC structure, owners (beneficiaries) of a Land Trust are NOT made public anywhere. If the LLC is managed by a “Manager,” some states provide for only the Manager’s name and address to be publicly listed.

The bottom line to all of this is it is best to hold title to your real estate investments in separate Land Trusts (and perhaps make your LLC the beneficiary of the Trusts). If you held title to all your properties in one LLC and it was sued and a judgment was obtained . . . a lien would attach to all properties held inside the LLC. Whereas, if each property is titled in a separate Land Trust, a judgment against the LLC beneficiary would not affect the title to each property (because the LLC does not hold title to the property . . . just a beneficial interest in multiple Land Trusts which constitute personal property interests not real property interests.