EHTransfer™ Overview

A Trust-Based Framework for Owner-Assisted Real Estate Transfer

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Introduction

The EHTransfer™ system is a proprietary real estate strategy that enables parties to transfer the full economic benefits of real property ownership—such as tax deductions, appreciation, and control—without title transfer, traditional mortgage financing, or standard credit qualifications.

Rooted in trust and contract law, this structure is ideal for:

• Buyers unable to qualify for traditional loans

• Owners seeking to avoid foreclosure or negative equity

• Investors acquiring property without institutional financing

• Parties requiring privacy, asset protection, and legal separation of rights

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Structural Summary

1. Title Holding in Trust

The original owner (Settlor Beneficiary) transfers legal title to a licensed, bonded, non-profit Trustee, who holds title for the benefit of all parties under an Illinois-type, revocable title-holding trust.

2. Beneficial Interest Assignment

Beneficial interests are assigned privately to one or more Co-Beneficiaries, typically:

• The Settlor Beneficiary (original property owner)

• One or more Investor Beneficiaries, who may also be the occupant

This creates legal separation between title, possession, and beneficial ownership.

3. Lease from Trustee to Investor Beneficiary

The Investor Beneficiary, regardless of occupancy status, receives possession via a lease agreement with the Trustee. The lease is contractually independent from the beneficial interest held in the trust.

This dual-structure (lease + trust) preserves legal clarity and allows the trust to manage possession without violating mortgage, credit, or occupancy restrictions.

4. Payment Administration

All monthly contributions (covering mortgage payments, taxes, insurance, and agreed-upon costs) are made by the Investor Beneficiary to a bonded third-party payment service. This ensures:

• Arm’s-length recordkeeping

• Neutral enforcement

• Transparent accounting for trust parties

5. Disposition and Proceeds Distribution

Upon termination of the trust (e.g., by sale, expiration, or agreement), the net proceeds are:

• First used to satisfy any remaining encumbrances or obligations

• Then distributed to the Co-Beneficiaries based on their agreed percentages and documented contributions

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Use Cases

🔹 Over-Encumbered Property Owners

When a property is “upside-down” (i.e., more is owed than its market value), the owner can:

• Transfer title into the EHTrust™

• Assign a portion of beneficial interest

• Appoint an Investor Beneficiary to occupy and make contributions

This allows the owner to avoid foreclosure, preserve credit, and relieve financial pressure—without violating due-on-sale clauses or triggering legal complications.

🔹 Free & Clear Properties

An owner can place a fully owned property into trust and appoint an Investor Beneficiary. The owner may optionally refinance before doing so, then allow the Investor Beneficiary to:

• Make ongoing payments

• Occupy or manage the property

• Possibly generate income or long-term equity participation

🔹 Investor Acquisition Model

An investor may become a Co-Beneficiary in an EHTrust™ to gain economic control of a property without purchasing title. In this structure, the Investor Beneficiary may:

• Lease the property

• Manage it as an income-producing asset

• Participate in appreciation and tax benefits

• Share future profits at disposition with the Settlor Beneficiary

All this occurs without new financing, title risk, or exposure to tenant-equity claims.

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Legal Protections & Distinctions

• No Title Transfer: Title remains with the Trustee—there is no public record showing a sale, protecting against due-on-sale clauses and buyer risk.

• Separation of Rights: Trust interest and leasehold interest are legally distinct, preserving enforcement and reducing regulatory exposure.

• Eviction vs. Foreclosure: In the event of default, the Investor Beneficiary can be evicted under lease terms—there is no foreclosure process or equity defense.

• Private Contract Model: The EHTransfer™ model is not a wrap, lease-option, or land installment contract. It is governed by trust and contract law—not seller-financing statutes.

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Regulatory Compliance Basis

The EHTransfer™ model is supported by a combination of legal principles:

• Illinois-style land trust doctrine

• Garn-St. Germain Depository Institutions Act exceptions (for inter vivos trusts)

• IRS Revenue Rulings relating to trust and leasehold tax deductions

• Uniform Trust Code (UTC)-compatible trust administration

• Clear separation of equitable ownership vs. legal title and possession

This model has been used in thousands of transactions nationwide and can be customized for specific state law environments with proper legal review.

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Legal Disclaimer

Important Notice:
This document is for informational and educational purposes only and does not constitute legal, tax, or financial advice.
All parties considering participation in an EHTransfer™ or similar trust-based structure should seek advice from qualified legal counsel familiar with trust law, real estate law, and applicable state and federal regulations.