Stop Nightmares at Closing

Protect Your Land Trust Proceeds

Some of my students have asked me how to stop nightmares at closing. They tell me that the Title companies they use are demanding that the payment be made to the Trustee. This is a huge, unnecessary problem. Land Trusts do not have bank accounts (and if they did, you still would not want ANY money going into the hands of your Trustee). If you allow this, you are risking your profits. This mistake compromises your core asset protection.

Why This is a Major Problem

A Land Trust is simply a legal agreement. It is not a banking entity. If the check is payable to your Trustee, you cannot easily cash it. You certainly do not want your Trustee handling large sums. They belong in your controlled Beneficiary account. For most of my students, this is the account of their LLC.

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Here Are Ways to Avoid This Hassle

  1. Go to a different Title company! You are paying their fees, and they should not be telling YOU what to do or how to do it!! If they want to continue to earn your business, they need to "work with you."
  2. If you already have a check that you cannot cash (because it is made out to your Trustee), take it to your bank President or V.P. (Don't take it to the teller, as he/she will not put the money in your account . . . since it is made out to your Trustee). Explain the problem to your banker. If you have a good relationship with your banker, he/she will walk you out to the teller and tell him/her to put the money in your account! You may need to endorse the check as "Agent for the Trust," but that is no problemo!

Emergency Measures

  1. This option is to open an account for your Trustee, deposit the check, take the money out of the account as soon as the check clears, and then close the account.
  2. The worst-case scenario is (if you REALLY trust your Trustee), have your Trustee deposit in his/her account and then wire the money to you. Then, NEVER use that title company again.

Receiving Proceeds Made Simple

Directing your title company to pay the proceeds to your Beneficiary can be as simple as this handwritten note my attorney gave my title company . . . and they complied!

Here are the contents of the letter my attorney wrote at the closing table:

To: ABC Title Company

From: Tom Jones, Trustee, for the Medellin Partners Trust

Re: Net proceeds of the sale of 123 Vine Street, Nowhere, Illinois

Date: 11.1.20XX

Please make the net proceeds check for the above transaction payable to:  The Red, White, and Blue LLC.

Signed By: Tom Jones, Trustee of the Medellin Partners Trust 11.1.20XX

Stop Nightmares at Closing Before They Happen

Students who have my Land Trusts Made Simple® Basic course or Land Trusts Made Simple® Complete Package and are active subscribers to my Land Trust University (LTU) have my help educating their Title company. I have also prepared packets of information for their Accountant, Attorney, Banker, and Insurance Agents, intended to grow their understanding of Land Trusts.

My active LTU students may download packets written by me for each of these professionals in their lives. In these packets, I explain what Land Trusts are. I guide their appreciation for why and how they can integrate Land Trusts into their practices.

 

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