Conservation TrustsA trust is essentially a set of legal documents and agreements that spells out how a piece of land can or cannot be used. There are two different types of trusts that are used to purchase real estate. One is primarily used by organizations or individuals concerned about land conservation. In order to control how a particular tract of land is used, theyll buy it and put it into a trust. Lets say, for example, that you want to protect a pristine riverfront wildlife tract from being converted into a shopping mall. You can buy land along the riverfront, and put it into a trust that specifically prohibits commercial development, while it simultaneously mandates stewardship of those natural resources.
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Keeping Property PrivateThe other reason to use a trust is to keep your ownership of real estate a secret. Whenever you purchase a home, there are deeds, property tax statements, and other documents with your name on them that are promptly recorded at the courthouse. Once they become public records, anyone who wants to can look at them. This includes nosy reporters for celebrity tabloids who have nothing better to do than to make the lives of famous people miserable. But, if you acquire your property through a legal trust, only the name of the trust and the person responsible for managing that trust (the trustee) will appear in public records. Thats why celebrities often use them to disguise their identities when buying homes.
Other Advantages Of TrustsBuying through a trust also offers additional levels of protection against liability. Instead of coming directly after your property, for example, people who file lawsuits, liens, and judgments must file their claims against the trust and trustee. If the trustee lives out of state, plaintiffs have even more hurdles to overcome, because pursuing legal action across state lines is complicated. You can also put real estate thats already in your name into a trust. But if you want to do a better job of concealing your identity and guarding against liability, you should have the seller put it directly into the trust at the point of purchase. If you want to leave real estate to an heir, you may want to take advantage of a trust, too. Thats because, at the time of your death, the property can go straight to your heir without going through the time-consuming, and often costly process, of probate. There is, however, an exception worth noting: A creditor could demand that you submit a complete inventory of all your assets. Your ownership of real estate held through a trust arrangement would no longer be concealed. After they discover what you own, they could go after that property. To set up a trust that serves your best interests, consult a qualified real estate trust attorney.
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