There are only six states that have an actual Land Trust statute (or case law recognition) and they are; Illinois, Indiana, South Dakota, Florida, Virginia and Hawaii. Does this mean if you do not live in one of these states (and own land in the same state) that you cannot form a Land Trust? Absolutely not!
Does Your State Have Land Trusts?
Most states recognize the validity of a Land Trust and allow its citizens to form a Land Trust to hold title to property in their state. This is typically done under the laws of the state where you live and own land.
For example, California does not have a specific Land Trust statute but you can still form a California Land Trust to hold title to California real estate by stating in your Trust Agreement that the trust is formed under the laws of the State of California.
Why Should Investors Even Care About Land Trusts?
Why should you care if you can form a Land Trust to hold title to your investment real estate (especially when advisors are recommending an LLC)? First, understand that titling multiple parcels of real estate in a single entity (be it a Land Trust, LLC or Corporation) is just plain dumb!
This practice creates a connection between each land trust.
If you agree with the philosophy of titling property in separate entities for asset protection (to insulate each property from the others), this leaves you with the question of which entity to use (LLC, Corporation or Land Trust)? Logic tells you that setting up a separate LLC or Corporation to hold title to each of your properties would be cost prohibitive (let alone, time consuming and frustrating).
Putting each property into a separate Land Trust is easy to do and costs NOTHING! Furthermore, the Land Trust provides privacy of ownership unlike other entities.
To learn more about Land Trusts contact a member of the professional Land Sales Team at Gratia Group by calling (239) 333-2221.