Land trusts – trusts tied to real estate – are often part of estate planning and asset protection. They are to be used within your lifetime for the management of proper what is the Purpose of a Land Trust?ties. They’re revocable trusts, which means they may be changed or terminated. Land trusts may include real estate (homes or buildings). Typically, they’re used for investment/rental property and may be used for land that is involved in wildlife or conservation purposes or for real estate development.
Land trusts contain three main parts — the beneficiary, trustee and the grantor. A grantor is a person who transfers the property and creates the trust. A beneficiary is one who benefits from the land trust and a trustee manages the trust. Under the Florida Land Trust Act, the beneficiary receives all the benefits of the property.
Grantors set the terms of the trust and handle all transferring of assets into the trust. A trustee owns only legal title to the property and takes action only at the direction of the beneficiary. For instance, if a rental property is held within a land trust, the trustee or the beneficiary may be responsible for the collection of rent payments and overseeing maintenance.
Kinds of Land Trusts
There are a couple of different kinds of land trusts — conservation and title-holding land trusts. A title-holding trust allows entities or individuals to anonymously hold land. The key difference with conservation land trusts is that the owner has to give up some development rights and land use.
What Are Title-Holding Land Trusts?
Title-holding trusts allow a property owner to direct the actions of the land trustee and anonymously maintain all of the rights over a property. Also, these trusts are commonly referred to as ‘Illinois land trusts’ because they were initially popularized in Chicago within the 1800s. During that time, property owners weren’t permitted to vote on city projects within the same areas they owned land. In order to circumvent the law, wealthy politicians and businessmen would use these trusts to anonymously buy land, therefore protecting their rights to vote.
What Are Conservation Land Trusts?
A conservation land trust requires that a property owner give up a few rights over land development and use. The aim of conservation land trusts includes protecting wildlife, cultural or historical sites, as well as natural resources from commercial development or additional activities that might lead to pollution or disruption.