What is a Colorado Land Trust? If you are looking for a conservation type land trust, you are in the wrong place. If you are looking for a title-holding, “Illinois type” land trust, you’ve hit the right page!
A land trust is a revocable, living trust used specifically for holding title to real estate. The trustee is a person with a different last name than the beneficiary for maximum privacy. Since the land trust document creating the trust is not recorded, nobody but the trustee and beneficiary know who the beneficiary (real owner) is. If you have many properties and want to keep your name off public records away from government inspectors, code enforcement, ex spouses, tenants and lawyer, a Colorado land trust may be for you.
Land trusts can protect you from liens filed against your name, because the property is titled not in your name but in a trust. Also, if you own property in a homeowner’s association with a trust, you are not personally liable for the unpaid HOA dues and assessments, but rather the trust (which only owns one property) is liable. Furthermore, if you sell a property from a land trust and end up with a title claim, the claim will be against the trust, not you personally. As you can see, there are many benefits to holding real estate in a Colorado land trust.
For more information on setting up a Colorado land trust, visit our main site at www.bronchicklaw.com or call us at 303-398-7032.
New website informs consumers how to form a Colorado LLC as beneficiary of trust.
http://www.howtoformcoloradollc.com.
Using an LLC as beneficiary of trust is a very powerful combination, affording anonymity and liability protection.
One of the dangers of owning a property in a subdivision or condominium building is that by simply taking title to the property you are agreeing to be personally liable for the HOA dues. This means even if you walk away from the property, the HOA can sue you personally for the debt.
Using a land trust to hold this one property will mean that the trust, not you, are liable for the HOA dues.
Are land trusts legal in Colorado?
If you are reading this because you are interested in Colorado conversation trusts, you found the wrong place. But if you are interested in title holding real estate land trusts in Colorado, you’ve come to the right place.
Land trusts, also known as “Illinois Land Trusts” are title holding revocable trusts for masking ownership of real estate. Unlike Illinois, Colorado does not have a specific land trust law. However, that does not mean Land Trusts are not legal in Colorado. In fact, Colorado title companies insure title to and allow transfers from land trusts all the time. Land trusts are created by trust agreement under common law trust principles. A trustee is appointed under the trust agreement and the beneficiaries are designated under the trust agreement. The trust is for a valid and legal purpose, and it is revocable and living, which means it is a form of revocable, living trust. Are revocable, living trusts valid in Colorado? You bet they are!
So what’s the difference between a standard revocable, living trust and a title holding land trust? Mainly the difference it twofold: 1. The living trust vests all power and authority in the trustee, whereas the land trust leaves the power of direction in the beneficiaries, and 2. The beneficial interest in a land trust is PERSONAL property and the beneficial interest in a land trust is equitable ownership of real estate. So, what exactly does this legal mumbo jumbo mean? Not much to the average person other than the land trust is valid and legal in Colorado!
If you ask the typical attorney in Colorado, “What is a Land Trust?” or, “Are land trusts legal in Colorado?” you will get the long stare and a blank look. This is because most attorneys in Colorado are not familiar with land trusts. This is a good thing – in Illinois, where land trusts are very common, land trusts are so well known that they are not very effective. Since most Colorado attorneys do not know what a land trust is, they would not know one if they came across it. This makes land trusts so effective in Colorado – confusion works well in your favor. Educate yourself on land trusts in Colorado, and use them effectively.
This video by Attorney William Bronchick below explains how a
rental property may be held in an LLC versus Land Trust
Many people are confused about whether to hold title to property in an LLC or a land trust.
This video explains which is better, an LLC versus a land trust for holding title.
For more information on Land Trusts and LLCs, visit www.bronchicklaw.com.
Many people wonder what’s the differences are of a land trust versus living trust.
A “living trust”, by definition, is a trust created while you are alive. Living trusts can be revocable (changeable or amendable) or irrevocable. When using a living, revocable trust for avoiding probate, this popular type of trust is often referred to as a \”living trust\”. A living trust vests legal title in a trustee, equitable title remaining in the beneficiary. The trustee has broad powers to manage the trust property as he sees fit for the benefit of the beneficiary.
A land trust is also a revocable, living trust, but it vests both equitable AND legal title in the trustee, leaving a \”personal property\” interest in the beneficiary. What does this mean? Basically that the beneficiary can transfer his interest in the trust like a shareholder in a corporation, without affecting title to the property. This makes transfers of ownership very simple, and not recorded on public records. In some states, this may avoid transfer tax normally due on the transfer of ownership of the property.
Also, the trustee in a land trust is not authorized to anything except that which the beneficiary directs him to do (called a \”power of direction\”, which is vested in the beneficiary).
While similar, a land trust agreement is drafted dramatically different than a typical living trust.
Want to setup a land trust in Colorado? This is a smart move because you can keep your ownership of real estate private by titling property in the name of a trust rather than an individual or LLC which is public record. A land trust is set up for each property, so that even if someone finds the owner of one property, they cannot cross-search the name in the public records to find what other properties are owned.
You can setup a land trust in Colorado in three simple steps:
1. Draft and sign a land trust agreement
2. Transfer title to real estate to the trust name
3. Record deed in county records with a document called a “statement of authority”
Also, you will need to insure the new titled owner, the trust.
A land trust agreement can be drafted by a Colorado lawyer who is versed in land trust law and Colorado real estate practices.
The law firm of Bronchick & Associates charges $497 to draft a land trust agreement and a transfer deed for the property, as well as prepare a statement of authority to be recorded with the Clerk and Recorder’s office. Some clients pay us to do all their properties, and some clients take the template and repeat it on their own.
If you have one or more properties your own (in Colorado or elsewhere) that you’d like to put in land trusts, contact our office at 303-398-7032 or go to www.bronchicklaw.com.
Need land Colorado Land Trust Forms? Land trusts are created by forms that are simple to, but quite different than living trust forms. These forms are generic for Illinois and often sold as good for all 50 states.
Attorney William Bronchick’s law firm, Bronchick & Associates, PC, can prepare Colorado land trusts forms you can use as a template over and over for $395.00 (go to www.bronchicklaw.com. We can prepare the trust agreement, deed, statement of authority and record the appropriate documents with the County clerk for just $395. We also do land trusts in New York and Florida, which forms are not the same as Colorado or Illinois.
Note that this service is for a title holding land trust, not a conservation land trust, which is a completely different animal.
For other states, he sells a land trust kit at www.legalwiz.com/land-trust. This kit is valid for all 50 states, except Louisiana and Tennessee, whose courts have declared land trusts invalid for those states.
There are many websites that sell generic land trust forms for use in all states, which may not be appropriate. Colorado land trust forms are not the same as Illinois Land Trust forms. Many states, including Colorado, have particularities that must be addressed by a licensed attorney, such as a particular form of deed, the way it is drafted, and a document specific to Colorado called a “Statement of Authority”.
If you prepared a land trust using generic Illinois land trust forms and would like William Bronchick to review the documents for compliance with Colorado law, call 303-398-7032 or go to www.bronchicklaw.com).