One can opt to buy a property through a real estate trust, a vehicle used to change its ownership from the owner to the appointed trustee. Here, the owner of the property won’t lose the ownership claim. At the same time, the legal claims are given to the trustee. A land trust can be revocable or irrevocable. When it is irrevocable, the beneficiary must make changes, such as gifts, inheritance, or charitable purposes.
On the other hand, when the real estate trust is revoked, the grantor is given control over the asset, and any transaction about the property can be altered or canceled. Therefore, as State Management says, one may decide to opt for a real estate trust when buying real estate because of its many benefits. Thus, the article below addresses some of the benefits that a real estate investor or a property owner would enjoy when purchasing through a real estate trust.
Reduced Tax Burden
One should not think that they would avoid paying taxes because they have the real estate trust. However, when one has a real estate trust, they will enjoy some tax relief benefits. It can either be a business or a person that will be the beneficiary of the real estate trust. Ideally, one needs to talks with the lawyer or accountant, as some property may be located in an area with a higher personal tax burden than that on business income. Therefore, it would be a good idea to set business as the beneficiary of the trust when taxation on individual property is higher. Thus, a real estate trust helps one identify the cheaper option on tax to reduce the burden.
One Can Remain Anonymous
With a real estate trust, the property’s trustee will be the owner, considering the public records. Therefore, for those who want to solicit their property from salespeople, it would be ideal to do so. The landowner places the land on the trustee, and their name will be left out of the public records, making the owner anonymous. It is easier to avoid solicitation from real estate agents or companies.
The appointed trustee for the property’s sales wouldn’t provide information about the property owners unless it were a court order. Unwanted solicitations can, therefore, be avoided when all the legal claims are on the trustee. There are also those with wrong motives or an opportunist who would want to take advantage of the property owner, once they realized that they have sold the property and has cash in the pocket.
Protection From Liability
In case one sells a land, the public records indicate that the trustee was the one who received the stated cash. One can then be saved from all these public records that one can take advantage of by determining the property owner’s net worth. These records are always available at the county recorder. Opportunistic and unscrupulous people can use this information with evil motives. Therefore, the real estate trust, they can’t understand the net worth of the seller. Some lawsuits can still not be protected by the real estate trust; therefore, one needs to ensure that they keep their legal track record clean. Such legal claims can be a liability to the property owner, and it is good to avoid such problems in the early stages.
Keeps Sales Price Secret
There is critical and sensitive information about a property that should be left out of the public. When one becomes anonymous in the house that they sell, they get the leverage. During negotiations, one may have obscure information like net worth or other property prices. For instance, a real estate investor may be working on a high profile commercial real estate with negotiations getting to the extremes. Simultaneously, it can be a liability to expose financial face, and the real estate trust will be an ideal way to keep everything a secret.
The public won’t have an idea of the seller’s net worth, avoiding incidences of opportunistic people taking advantage of the situation. Other benefits of getting real estate trust would be minimizing probate’s difficulty, and the transfer of property ownership is made more accessible.