Published On Mar 22, 2017
Being the beneficiary of a land trust does not offer you or your real estate any asset protection (Florida being the one notable exemption). Many real estate investors think once their property is transferred into a land trust if something happens with the property the investor is protected. Quite the contrary, if the land trust is sued, the land trust beneficiary is personally liable for any claims brought against the land trust. Further, if the land trust beneficiary is sued a creditor can take the land trust beneficial interest from the real estate investor.
To put is simply, you do not want to be the beneficiary of a land trust any longer than necessary. Once you set up your land trust and deed your real estate into the trust your next priority should be to set up a limited liability company (“LLC”) and assign your land trust beneficial interest to the LLC. Thus, your LLC becomes the beneficiary of the land trust and creates an asset protection shield around your property.
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