In the book, in the section about choosing a place to live, it talks about the financial issues surronding retreat property. The pros and cons of holding a mortgage are discussed and then Joel talkes about using trusts or other legal methods for keeping the purchase of a property hard to trace. I have heard about this before but I know no details. I looked for another book in the bibliography that would expound on this principle but there was nothing. Does anyone know of a book that would discuss effective ways to keep the ownership of property hidden? Or do I have to engage the help of a trusty lawyer?
Roberto,
For a time, I worked for a man named Lee R. Phillips whose business was living trusts--exactly the kind of thing you're wondering about. While I don't know many particulars, I do know that he wrote an excellent book, Protecting Your Financial Future. The Phillips' had a close call with probate law--Lee almost died of cancer, and Kristy faced all kinds of predators coming for her home and assets. After knowing them personally, and working with them daily, I can say with confidence that Lee is an honest and honorable man, even though he is a lawyer. :o) This would definitely be a book you'll want to look into. Good luck!
A living trust is also known as a Revocable Living Trust or a Family Trust. It’s a legal document that holds title or ownership to your real property and assets. When you create a Revocable Living Trust you transfer ownership of your assets to the trust. Transferring assets is typically called “funding.” When you transfer title you DO NOT relinquish any control. You can still buy, sell, borrow or transfer. You are still in full control of your assets.
What’s the difference between a living trust and a will? Like a will, the living trust includes details and instructions for how you want your estate to be handled at your death. Where a living trust differs from a will is that a living trust does not go through probate. A living trust prevents the court from controlling your assets at incapacity. It also allows you control over the assets you’ll leave to minor children or grandchildren.
What are other advantanges of a living trust? It enables you to transfer property after your death to your loved ones. It lets you appoint someone (a successor trustee) to make sure your property goes to the ones you choose after your death.
Joint tenancy or simply having a will does not let you keep your financial matters out of probate. A living trust offers more privacy.
Still confused? The above is only a partial or general definition. Read more about living trusts and their other advantages at the links below. Be forewarned, though, that creating a living trust is usually a bit more expensive and a touch more complicated than creating a simple will. Ask an attorney to explain the differences between a will and a living trust before you make a decision.
Here’s one thing that I personally like about living trusts. Imagine a person with no children, no spouse (or who may have outlived a spouse), but who has greedy distant relatives that would surely appear after the funeral, wanting to find and claim the deceased’s property. But perhaps the deceased didn’t like the wannabe-heirs and wanted something stronger than a will to disown them. Good luck, “wolves,” finding the property if the deceased had the wise foresight to place it in a living trust and not reveal the name of the trust to anyone other than the attorney before he or she died. A living trust would block off money-hungry “wolves” at the path. This is just one type of protection that the living trust offers. See below for other advantages of a living trust.
Privacy is a major advantage to a living trust. For example, Bing Crosby’s property was all held in a living trust, so the terms of his wishes and what became of his property never became known to the public. Crosby designed his estate planning strategies so things would go this way. If you don't want to be found, or you don't want your property or who you left it to or all your financial details to go on public record, you might consider having an attorney draw you up a living trust.
Pros And Cons Of Real Estate In A Living Trust
http://www.chicagotribune.com/classified/realestate/chi-0204260019apr26,0,5707378.story
What’s A Living Trust?
http://www.estateplancenter.com/livingtrust/what.html
Picking The Best Way To Hold Title To Your Home
http://www.latimes.com/classified/realestate/buying/la-re-hold-title.story
FAQ On Living Trust
http://www.turbotax.com/articles/FAQonLivingTrusts.html
Whether or not you have a Living Trust, you should set up a "Land Trust" entity for each parcel of property you own. It is simple and cheap to set up (compared to a Living Trust) and adds a beneficial layer to the Living Trust.
Basically you sign over the ownership of a land parcel and/or building to a land trust named anything you like ("123 Easy Street Land Trust" for example) and it will be in the tax records under that name (instead of your name or the name of your Living Trust). You can put yourself, your Living Trust or anyone you trust as the "Trustee". This can be changed by simply having a trustee assignment sheet signed and notarized. By the time a lawyer finds the trustee (could be your brother 4 states away), and gets him into a court room, he has simply signed over the trustee-ship to someone else, say, your sister 6 other states away. The lawyer won't find this out until your brother states in the court room that he was the trustee but no longer is. Now the lawyer must track down the new trustee and set a new court date, etc. There's no limit to the number of times you can change the trustee.
Alternatively, you could make the "Trustee" an LLC, and then make the Living Trust the owner of the LLC. This provides 3 layers of protection (including a "corporate veil").
For best results, put each parcel of property into its own land trust.
Disclaimer: I am not a lawyer, nor do I play one on TV (or the internet
so please seek competent legal advice before doing anything I suggest...
It's tough to convince a lender to let the trust/owner (anonymously named) pledge the property. But it appears to be possible. The challenge is that the lender's lawyers always say "no," and won't talk directly to the borrower(or even the lawyer for the borrower).
We solved this by getting our lawyer as a silent participant in a conference call between the mortgage broker (who was trying to help us with privacy of ownership) and the lender's lawyers. After our lawyer heard their lawyers' objections, she was able to help the broker explain matters in a follow-up call.
It looks like it will work, and our home will be owned by a trust with a name unrelated to ours.