What are the pros and cons of owning real estate in a land trust?
I’ve seen several situations where people thought that land was owned in a trust, and it was not – the trust had been set up, but the land was never transferred to the trust. If you think the property owner is a trust, check the deed to be sure. If you’re considering transferring the property to a trust, you will want to check the mortgage documents on any outstanding loan secured by the property, to be sure the sale/transfer of the property doesn’t trigger a “due on sale” clause. Depending on the type of land and use of the land, there may be tax advantages or disadvantages. For example, the trust will have to file an income tax return, (increased costs incurred), and if homestead property is transferred to the trust, the homestead property tax exemption may be lost, along with protection of the homestead from creditors. One good reason I’ve trusts used to hold land is to simplify probate, where the owner has property in different state than where he lives. The trust eliminates the ne
