8501 W.
Higgins Suite 440 feel free to contact me for more information |
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be sure to read the disclaimer below |
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The Basics Note: The Illinois land trust is only available for real property within the State of Illinois. Other states may recognize and may grant legal status to the Illinois Land Trust, but this page deals only with land trusts within the State of Illinois. Also, I have received numerous inquiries from people in other states looking for help with an "Illinois Land Trust" in a jurisdiction other than Illinois. I cannot help with these requests. I am only licensed to practice law in Illinois and it is always best to consult with an attorney in your own State. In Illinois, land trusts have been around, in some form or another since 1868. From the first case recognizing the validity of these trust instruments in Kerr v. Kotz in 1920, Illinois Courts have upheld the entity as a legal manner of holding real estate. In essence, a land trust is a simple trust which vests in a trustee the title to the property and the power to convey or deal with the property at the direction of the trust beneficiary. The beneficiary, on the other hand, retains the power to use, convey, or manage the land and holds any other number of rights. In the typical scenario, a landowner will transfer title in property to a bank or another person as trustee of the property by way of a deed in trust. At the same time, the landowner will enter into a trust agreement with the trustee which basically reserves to the landowner, as beneficiary, most of the rights in the land. In essence, the trustee ends up with the right to hold title to the land in the land trust and to convey that land at the direction of the beneficiary. The next most important aspect of the land trust is the beneficiary designation. Upon the death of the primary beneficiary (or there may be more than one beneficiary who may hold title as joint tenants with the right of survivorship or as tenants in common), the trust agreement will designate a successor beneficiary or co-beneficiaries. As such, title to land will pass quite easily and outside of probate. Finally, the trust agreement will designate the person or persons who hold the power of direction. This is the ability to tell the trustee to convey the land or make changes to the trust agreement. As such, a landowner may designate another person as his or her co-beneficiary but still retain sole power to direct the sale of the property without the consent of the co-beneficiary. Advantages of having a land trust There are many benefits to holding title to your land in a land trust. The most obvious reason is probate avoidance for land. Because the trust agreement governs the ownership of the property and not a will, the property will not be included in your probate estate (although it will be included in your estate for estate tax purposes). As such, the long time delay inherent in probate will not apply and title to the land vests immediately upon the death of the beneficiary. In the same vein as probate avoidance is the ability of a landowner to easily designate the property to the heirs of his or her choice upon death. Because the bank or other trustee must act according to the trust agreement, there can be no heir contest in probate. Barring some technical trouble with the trust agreement itself (which has not changed much since the decision in Kerr v. Kotz), the property will pass to those whom the landowner has decided it should pass. Because the power of direction may be vested in only one or many individuals, depending upon your situation and the structure of the trust agreement, a land trust provides convenience and security. A landowner may grant beneficiary status to another person, but still maintain the sole right to direct the sale of the property. In other cases, a group of owners may designate one person as the sole decision maker for ease and convenience in making transactions regarding the property. In either case, depending upon the factual situation, a land trust can facilitate the transfer of the property in the trust. Finally, because the land is deeded to a trustee, the beneficiary is not disclosed to the public. This privacy can be of immense value to a landowner. Any information related to the property is a private matter between the trustee and the beneficiary. What a land trust does NOT do A land trust does not have the flexibility of a living trust. Living trusts are often much more complex, containing additional terms and provisions and holding title to property other than land. Living trusts are usually much more costly because of their increased scope. In addition, living trusts may contain various provisions dealing with estate tax minimization and other estate, gift, and property tax issues. However, the land trust is the perfect estate planning vehicle for the transfer of land outside of probate and is an excellent tool for most persons holding less than $2,000,000 (ie. those who do not require estate tax planning).
Services
Provided I provide full
service for the drafting of a land trust and trust
agreement. I can work with you to find a suitable
banking institution to act as trustee, such as Cole
Taylor Bank, Chicago Title,
Bloomingdale Bank, or any bank of your choice which
offers trustee services. I will also take steps
necessary to verify that your property is correctly
identified by doing a search of the legal
description and property tax number with the County
in which the property is located. Fees Land Trust Drafting
Services are provided for a flat fee of $350 plus recording costs
(usually $36.50) and the cost of a simple tract search ($60) and any
municipal transfer taxes (varies based on your city's rules).
Additional land trustee charges apply (acceptance fees vary depending
upon the value of the property but usually cost about $100 with
discounts for seniors) depending upon the banking institution chosen as
trustee. The first step to preparing a land trust is to think about who you would like to be the main beneficiary of the trust, who should have the power to control the trustee, and who will be the successors to the property when the beneficiary dies. Then, please give me a call for a free telephone consultation. We cannot discuss or help with land trusts for property outside of Illinois. To get this process started, please feel free to contact Richard Magnone at 773-399-1122.
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DISCLAIMER This website is intended to supply general information to the public. Although the information is generally accurate, it cannot be guaranteed. The nature of Legislation is that laws change quickly, and visitors should always insure that legal information is accurate before relying on it. The above information applies the law of the State of Illinois. The law in your jurisdiction may be different. This information is necessarily brief and may or may not apply to your situation. In all cases, PLEASE, consult a lawyer before acting. This website is intended to be advertising, and not solicitation, or legal advice. Thus, the reader should not consider this information to be an invitation for an attorney-client relationship, should not rely on information provided herein, and should always seek the advice of competent counsel in the reader's state. |
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