THE “SINGLE-BENEFICIARY” GRANTOR’S EQUITY-HOLDING TRUST™
Safely Shielding One’s Real Estate Ownership from Public Scrutiny for
Protection Against Potential Unwarranted Attention and Thwarting In Rem Litigation
[i.e., In Rem: re. legal action involving the property]
A BRIEF SYNOPSIS
- ‘The beneficiary-directed Equity Holding Trust™, which is modeled upon the 100 year-old Illinois-Type (3rd-party trustee) Land Trust, effectively shields one’s real estate ownership from public view (i.e., in that only the deed to the 3rd-party trustee is recorded, while the unrecorded confidential trust document containing the identities of the beneficiaries remains private and unavailable to any inquiring party, absent a court order).
- Within the Equity Holding Trust™ (EHTrust™) arrangement, the trust property’s title is temporarily vested, legally and equitably, in a third-party, ‘bonded and licensed, non-profit corporate trustee.
- The temporary transfer of a property’s ownership to any inter-vivos trust does not violate any lender’s alienation (“due-on-sale”) admonitions (re. 12USC1701j-3).
- “Land Trusts” per sé (including the EHTrust™) are legal and wholly acceptable in all US states: ‘although in Louisiana and Tennessee, beneficiary-interest in a real estate holding trust is perceived as Use in, and Ownership of, Real Estate vs. Personal Property: thereby necessitating Foreclosure versus Eviction for the removal of a defaulting tenant-beneficiary. In other states, one’s property “Use” is, as per common legislation, Use in Trust versus Use in Land. (Note that even in La. and Tn. a qualified land trust beneficiary is, under IRC 163(h)4(D), entitled to full income-tax deduction for the expense of mortgage-interest and property tax.
READ MORE (‘If doing so is deemed necessary)
Application of the Equity Holding Trust™
The “EHTrust™” comports fully with existing regulations and pertinent legal fiction in all states relative to beneficiary-directed real estate title-holding trusts, commonly referred-to as “Illinois-Type” Land Trusts. This 500 year-old trust configuration (‘extant for 100 years in the US) is primarily used by owners of real estate who choose to avoid public disclosure of their identity and financial wherewithal, as might be evidenced by public notice of their financial interest in real estate.
Aside from a individual property owner’s use of the EHTrust™ for asset-shielding, anonymity and estate planning purposes, a common use of the EHTrust™ structure has been that of purchasers of real estate who choose to remain anonymous for fear that knowledge of their identity would unfairly inflate the property’s sale price, or cause unwanted and potentially harmful media attention. A specific case in point would be that of the very secretive 1965 acquisition, for $187 per-acre, of 27,000 acres (43 sq. mi.) of Florida swampland, by the Buena Vista Corporation Land Trust. Had the sixty plus individual sellers known at the time that their land was being acquired for the benefit of Walt Disney for construction of the largest and most frequently visited theme park on Planet Earth (”over 12 million visitors per-year), the terms of the sale and purchase would likely have been quite different.
It is essentially the same land trust structure referred-to above that can be used by individual homeowners, income-property owners, buyers and sellers for essentially the same reasons: i.e., ‘avoidance of public notice of ownership. This is to say that by allowing the property’s title ownership to be temporarily vested in a trusted and qualified third-party, the ownerwhereby all power-of-direction, power-of-sale, right to lease, right to terminate and re-convey, remain with the settlor (i.e., the original owner-of-record), the title (deed) is shielded against protected from is transferred to, and held legally and equitably (albeit, temporarily) by, a qualified third-party trustee for a stipulated term of years (‘most often from 2 to 21 years).
Note here that despite ownership by the trustee, the trust’s grantor of title as beneficiary has the property’s full management responsibility, full power of direction and termination, along with the power of sale and 100% control over all actions of the trustee. One’s vesting his/her property in the trustee in this manner has no deleterious effect concerning a lenders “due-on-transfer” admonitions (i.e., see 12 USC 1701j-3), involving a wholly-allowable transfer to an inter vivos trust for protective asset-planning reasons.
Subsequent to creation of the EHTrust™, any title search based upon a suspected owner’s name, or on the property’s presumed address, would not reveal the identity of any party-in-interest other than the true legal and equitable title owner: i.e., the designated title-holding nominee (‘the trustee). ‘Nor would one find in the public record the identity of any beneficiary named in the unrecorded trust document. ‘As well, with the proper trustee appointment, one can be assured that all information regarding the property, the trust and the beneficiaries’ are (‘under penalty of law) held confidential, never to be revealed to any inquiring party absent a court-order and deposition of the trustee (i.e., which deposition must be conducted within a fifty mile radius of the deposed party’s physical location).
Considerations re. Appointment of a Trustee
Relative to selecting a 3rd-party EHTrust™ trustee, one need remain aware that, although legal, a non-professional trustee-nominee (i.e., a natural person or any fictitious entity that is not operating as a full-time trustee), or one unfamiliar with pertinent law could be problematic in that a non-professional trustee is always an easy mark for those who would use intimidation, coercion or threat of litigation to extract personal and private information (e.g., ‘nosy neighbors, quarreling family members, bitter ex-spouses, contentious attorneys, self-proclaimed creditors, conniving “(so-called) Consumer-Advocate” lawyers canvassing for vulnerable targets with deep pockets).
Note as well that the asset-protective elements of an Illinois-Type Title-Holding (“land”) trust (‘such as the EHTrust™) would likely fail a legal challenge if the appointed trustee were to be a non-corporate entity acting without proper experience, insurance and bonding. Also any trustee not charging a fee sufficient to cover the standard operating and legal expenses ordinarily confronted by legitimate bank and trust company trustees. [‘i.e., ‘a fee that would be considered “commensurate with industry standards” — See the legal fiction established by Illinois 765 ILCS 435/Land Trust Fiduciary Duties Act, as well as related regulations in other states in which land trusts are specifically legislated]
Asset Protection via the Single-Beneficiary EHTrust™
One’s real estate holdings (i.e., ‘single-family, commercial or industrial property) are shielded from public recordation when the property’s title is transferred to a 3rd party trustee nominee, for the sole purpose of creating anonymity of ownership by the removal one’s name from the property’s title and, therefore, from the public record. The vesting of the property’s legal and equitable ownership in an unrelated third-party trustee in this manner effectively converts one’s ownership status from ownership of real property (i.e., real estate) to ownership of personal estate (“personalty”) interest in a real property trust (‘not wholly unlike owning stock in a corporation, which owns real estate: wherein the corporation owns the real estate and the stockholder owns personal estate in the form of a stock certificate). In this scenario, one must remain aware that even though the ownership of the property is secret, unrecorded and ordinarily wholly unavailable to any inquiring party, including the IRS: the trustee would have no choice but to release information to a litigant in an official deposition…(‘if asked the right questions): ‘quite likely resulting in the trust being set aside due to there now being an enforceable claim against the property). [See nest para. re. how such a result can best be avoided
The Value of Naming an Unrelated, Non-Participating Entity
As a Co-Beneficiary in one’s EHTrust™
In view of the non-partitionable nature of personalty, versus easily partitioned real estate, one might be well-advised, when creating any asset-protective title-holding trust, to name a trustworthy unrelated co-beneficiary in the trust, in order to best thwart potential threats of in-rem litigation (i.e., ‘actions against the property wherein partition would be sought). By doing so, the trust is established for all the foregoing reasons; however, the naming of an additional (unrelated, non-participating) co-beneficiary serves the purpose of protecting the property from intrusion by litigation, in view of the fact that co-owned personalty (‘the nature of the beneficiary interest in a trust) is rendered legally non-partitionable, and, therefore, reasonably beyond the reach of claimants seeking in rem relief…’even including the IRS (‘i.e., ‘that is, assuming there would be no provable creditor fraud, or intentional collusion relative to provable intent to avoid or minimize payment of taxes, or to perpetrate intentional Fraud upon a legitimate creditor or adversary litigant).
For additional information, contact ODWM at 800 409 3444
ODWM’s Equity Holding Trust™ (EHTrust™) contrasts significantly with the more commonly encountered “simple title-holding land trust” concept being widely promoted (‘and all too often misrepresented) by less than fully-informed real estate investment advisors across the country.
- EHTrust™ documents are professionally prepared, overseen and reviewed by legal counsel prior to client review and acceptance (‘boiler plate, “good in all states” documentation is unacceptable).
- EHTrust™ documentation consists of the Trust Agreement, the transfer document (Deed), a Declaration of Uninsured Deed, special trustee directions and any jurisdiction’s requisite PCOR (“Preliminary Change of Ownership Report”)
- All EHTrust™ documentation is regularly researched for continued applicability in each jurisdiction.
- Our company (ODWM, LLC) has endured (‘and always prevailed in) numerous local, state and federal legal actions since 1985 (‘i.e., without a loss or concession).
- ODWM, LLC has participated in no less than 250 eviction processes over the years in various jurisdictions and has been able to thwart all attempts at side-stepping the eviction process with claims of holding equity by errant tenants (‘i.e., for purpose of trying to force Foreclosure vs. Eviction in order to steal time and free rent).
- ODWM‘s offices remain available to clients throughout and beyond the term of the trust agreement.
- All of us at ODWM, LLC stand ready to assist and support our clients at any time in related person0al or legal matters
- Equity Holding Corporation (‘our preferred and recommended corporate trustee) is an experienced, bona fide non-profit 501C charitable corporation, acting for the benefits of its contributing members.
- Equity Holding Corporation is a true unbiased 3rd-party, and does not make disbursement on behalf of land trust beneficiaries.
- Equity Holding Corporation’s Title-Holding Fee (“trustee fee”) is fully “commensurate with industry standards” (i.e., $12.00 per-month, per-property, paid annually in advance).
- Equity Holding Corporation is not a (potentially biased) property management company or law firm.
- Equity Holding Corporation is a duly bonded, insured and licensed, non-depositary institution trustee.