Can a Land Trust Own Real Estate?

Who holds legal title of property in a Land Trust?

Some real estate gurus mention that the Land Trust "owns" the property. Is that true? Who really owns the property? The Land Trust or Trustee or Beneficiary?

A Land Trust is a specialized type of trust formed to deal with real property (not personal property) for the benefit of one or more persons referred to as "beneficiaries." The person creating the Trust is often known as the "Trust Creator" or "Grantor." The person or institution holding legal and equitable title to the real property is called the "Trustee."

What is Trustee? The Trustee also has the duty of properly safeguarding and managing trust property and is held to a very high standard when it comes to protecting and investing trust property. This is referred to as the fiduciary duties and responsibilities. Not all states recognize the use of an entity as a trustee, so you must check your state law.

Be very careful who you choose as the Trustee for your Land Trust. The Trustee has the power to convey the property to third parties without question. It's not to say that Trustee is without recourse if they did not follow the Beneficiaries instructions.

The Trustee is used to protect the identity of the Beneficiary. The documents say that the Trustee should only act on the written direction of the beneficiaries, but no one has the right or obligation to see the written direction.

Land Trust Grantee The proper way to draft the deed to convey the real estate into a Trust is by noting the Grantee as follows, the Grantee is "Joe Friday, Trustee for the Smith 34 Sumter Trust" or "Joe Friday as Trustee of the Smith 34 Sumter Trust."

When the transfer/property tax forms are completed, you can use a post office box such as "Smith 34 Sumter Trust c/o Joe Friday Trustee, PO Box 343, Woodstock, CA 90025."

Not all states require you list an address in the deed. Check your state law to determine if it's required.

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