Trusts Are The Key To Protecting And Keeping Your Assets
27080
Finance > Real Estate
Jun 17, 2007
DoctorPre-Foreclosure
Trusts Are The Key To Protecting And Keeping Your Assets
Trusts have been used for hundreds of years for tax savings and estate planning, but few people realize the enormous potential for using trusts for privacy. In this information age where records of your assets can be accessed via computer, fax and even telephone, you have to take active steps to protect your privacy. A trust is a private contractual arrangement between several parties for holding, managing and investing assets. The parties to the trust are the grantor (the person creating the trust, also known as the "settlor"or "trustor"), the trustee (the person or entity holding title to the assets) and the beneficiaries (for whose benefit the trust is established). A trust created for one's benefit is called a "self-settled" trust, i.e., one in which the creator and beneficiary are the same person. A trust created during the life of the grantor is called an "intervivos" or "living" trust. An intervivos trust can be either revocable (taken back or modified by the grantor) or irrevocable (once created cannot be revoked). A "living trust," while technically any trust created during the life of the grantor is a buzzword in the estate planning industry used to describe a revocable, intervivos trust. The typical living trust is created by an individual for his own benefit. He also names himself as trustee, i.e., "The John Doe Family Living Trust." Upon his death, a successor trustee is named to hold and manage the trust property (typically his spouse, sibling or a bank trust department). Although he is the beneficiary during his life, the trust will name his family as alternate beneficiary upon his death (known as a "testamentary disposition"). One of the main reasons why living trusts are used is to avoid probate. Upon your demise, the assets remaining in your estate are distributed according to the instructions of a Will, or, if there is no Will, according to the rules set forth by state law. The Probate court is involved throughout the process, adding time, cost and aggravation. The Will is now public record, for all the world to see. If you own assets in multiple states, an "ancillary" proceeding must be commenced in each state. If most of your assets are owned in trust, these assets are not subject to probate, nor are they on display for the world to see. The trustee, according to the instructions of the trust agreement, either distributes the assets outright to your heirs (the alternate beneficiaries), or holds them in trust until they reach a certain age. Your trust can hold assets (such as real estate) in multiple states without the need for ancillary probate. You wouldn't walk around with a financial statement taped to your forehead would you? So why would you have your most valuable assets exposed to public scrutiny? Owning real estate in your own name is like walking around with a giant kick me sign taped to your back. In every county in the United States, copies of deeds to real estate are recorded in the public records. Anyone can go down to the courthouse or recorder's office and look up the owner of any property in the county. A land trust, a modified form of living trust, will hide your name from the public records. The land trust (also known as an Illinois Land Trust, "Title Holding Trust" and "Nominee Trust") differs slightly from a regular living trust in that the trustee is a mere nominee. The beneficiaries have the right to direct the trustee as to the acquisition, management and disposition of trust property. The main purpose for using land trusts is privacy of ownership. No one will know who owns the property but you, your attorney and the trustee. If the trustee resides in a different state than the property is located, it will be difficult, if not impossible, for anyone to discover the proverbial "man behind the curtain." If a judgment is entered against you, the lien will not automatically attach to the property, since the title is not in your name. A personal property trust, like a land trust, is a simple, revocable trust used to hold title to assets. Cars, boats, bank accounts, leases, mortgages, mobile homes, corporate stock - you name it - it can all be held in the name of a nominee. Anything that can be found on public record is a dead giveaway to potential creditors, contingency-fee attorneys and deadbeat litigants looking to steal your hard-earned fortune. Using a nominee trust to hold title to assets will help keep your financial matters private and discreet in the information age. A trust, unlike a corporation, is not registered with the state. There are no public records of officers, directors and shareholders. There are no minutes of directors' and shareholders' meetings. The trustee keeps control of the trust records and the identity of the beneficiaries in his file cabinet. A trustee will not reveal this information without a court order. Revocable, living trusts are "tax neutral," that is, there is no tax consequence of transferring property into trust. According to sections 671- 678 of the Internal Revenue Code, the property is treated as still being owned by the grantor (the logic is that since the grantor can still revoke the trust, it still belongs to him for tax purposes). For example, if you owned you rental property in your name and reported on schedule "E" of your federal income tax return, a transfer into a revocable, living trust of which you are the beneficiary would not change your reporting. Compare this to transferring property into a corporation, which is a separate taxpayer, even if your own all of the stock of the corporation. As you can see, trusts are simple, yet effective devices for holding title to assets and presrving your privacy.
Richard Reichmann is internationally known as a millionaire maker. He's a leading consultant in real estate and internet marketing strategies that are profit proven. Subscribe to our FREE newsletter Value $147.00 http://www.InstantRealEstateWealth.com
send email to DoctorPre-Foreclosure
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
Using podcasts in your business can do many thing to improve the bottom line. Creating customer awareness and driving traffic to your website are the two most important.
Category:
Making a great deal of money in the real estate business isn't very difficult. Remember it isn't what you earn it's what you keep. Learn to protect your assets with trusts and you'll keep it all in the process.
Category:
When you move beyond unlimited wealth, you are protecting yourself and your family from the financial instability that causes so much tension and anxiety in this world. You will enjoy peace of mind knowing you will always have more than enough money to ta
Category:
Anyone can buy and profit in a hot or rising market. You don't need to be very sharp to buy in a rising market. Buying in a changing or declining market is another story. Now is when you need to hone your skills if you plan to stay in this game.
Category:
Flipping is the buzzword of the year in real estate flipping books, flipping articles in the newspaper, and even flipping shows on TV!
Category:
As landlords we need to be very careful when it come to Disctimination. When I was a broker many poeple tried to get me to fall into their trap. Just be cautious in everything you say and do.
Category:
Concentrating on a specific area or farming as it is btter known, is by far the best way to become an expert in a given area. It also help to keep your skills honed as to the values of the properties in your farm area.
Category:
Being able to properly explain the options available to a seller can sometimes be quite a task. Make sure the seller understands all of their options before making a decision on which path to take.
Category:
Anyone can find a good lead once in a while, that doesn't take any real skill. Finding the good deals month after month in a horse of another color. That does take some practice and a few easily learned skills.
Category:
A motivated seller is a property owner whose sole aim in life at the time you are talking with him is to get rid of his piece of property.
Category:
Why would you invest in preforeclosures instead of going with conventioanl buying? The answer very simply is profit. The largest spreads are to be made in preforeclosures because you are dealing with people that have to sell not those that want to sell.
Category:
Contract don't have to be a formal fancy contract, but certain elements must be present for it to be a legally binding contract.
Category:
Getting started in real estate doesn't take money or credit. In fact, if your going down and sucking up to the banker to buy any type of property, you doing it all wrong.
Category:
There are tremendous profits to be made by savvy investors in the slowing market. Knowing what to look for and how to respond to it are the keys to your success in the as well as any other type of market
Category:
If you're looking for the way to make the most of your real estate business, buying subject is the way to do it. The method of buying will creat more wealth that any I have ever seen.
Category:
Your exit strategy is an extremely important part of your real estate investing business. In fact, it is one of the most important parts. Sometimes investors get excited because they learn how to buy properties, they find them and they have the money line
Category:
Other links at Finance > Real Estate
Foreclosure begins when a property owner defaults on the mortgage of a property, mainly due to financial difficulties or the inability to keep up with the mortgage payments for some reason or another. In the event that a property succumbs to a foreclosure
Category:
Sugar Land is a suburb of the city of Houston that is located just 20 miles southwest of this bustling metropolis.
Category:
The Johnson Development Corp has been serving the Houston area, in addition to both urban and suburban cities in other states, since 1975.
Category:
Moving can be one of the most stressful times in your life, so find out you can do a good job of finding the best place to live in your dream locale?
Category:
I would imagine that at some point soon, the Treasury Department and the Federal Reserve will start receiving thank-you notes from New York City realtors: The falling dollar has made New York apartments an incredible value for those that earn their salari
Category:
Site Sponsor
Directory Statistics
Articles: 68309
Categories: 501
Yahoo Entertainment
