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Land Trusts
Definition
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| a few states permit the creation of land Trusts, in which real estate is the only asset. as in all Trusts, the title to the property is conveyed to a Trustee, and the beneficial interest belongs to the beneficiary. in the case of land Trusts, however, the beneficiary is usually also the Trustor. while the beneficial interest is personal property, the beneficiary retains management and control of the real property and has the right of possession and the right to any income or proceeds from its sale. one of the distinguishing characteristics of a land Trust is that the public records usually do not name the beneficiary. a land Trust may be used for secrecy when assembling separate parcels. there are other benefits as well. a beneficial interest can be transferred by assignment, making the formalities of a deed unnecessary. the beneficial interest in property can be pledged as security for a loan without having a mortgage recorded. because the beneficiary's interest is personal, it passes at the beneficiary's death under the laws of the state in which the beneficiary lived. if the deceased owned property in several states, additional probate costs and inheritance taxes can be avoided.
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