Privacy Protection Negotiation Florida Land Trust Introduction
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These are original documents we\'ve been developing over the past year to educate Realtors, US Investors, Foreign Investors, distressed home owners and Retiring Baby Boomers. You can see the video versions at either facebook.com/celticwindinvestment or on youtube at youtube.com/mikenweston/
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Privacy Protection Negotiation Florida Land Trust Introduction
- 1. A Celtic Wind Investment Educational Production Hosted by: Realtor Michael Belgeri CDEI
- 5. Ubiquitous Land Trust Law
- 6. Florida Land Trust Law
- 9. IRS Sees Real Estate In essence, the seller’s interest (legal title of the real estate) is converted into an interest in personal property (the money to be paid to purchase the property). Conversely, the buyer’s interest (purchase money) becomes an interest in real estate. Thus if, at the time of the sales contract’s execution, the seller is still in possession of the property (as is the usual case), he or she holds the property subject to a legal obligation to take care of it for the buyer and must be sure the property does not suffer damage.
- 11. Due on Sale Clause
- 12. Title 12 US Chapter §1701-j-3
Editor's Notes
- We offer for your review and careful consideration the following educational presentation. In anticipation of any concerns you may have, or which may arise later, important points will be made for clarification. There are two primary ways to transfer ownership of real property in Florida – First, when a house is sold by the owner to a buyer—that, is a transfer of the property’s legal and/or equitable title to an acquiring party. Unfortunately, this transaction is made part of the public record at the local county courthouse. The other way is by creation of a Land Trust. A Land Trust is not part of the public record. This creates a transfer of what is called “beneficiary interest” in a title-holding entity which owns the property. The process entails having the property’s legal and equitable title vested with an unbiased trustee for the duration of ownership or occupancy. Here is Florida Realtor Michael Belgeri, our Certified Distance Education instructor to tell you more.
- In an equity holding transaction, the beneficiaries remain 100% in full control of any and all of the actions of the Trustee. It’s the same in all matters relating to the property and its title. When using this method of transfer, maximum legal safety and asset protection is attained, and no benefits or advantages of real property ownership lost or forsaken. You can think of this method of transfer and asset protection as being analogous to holding the property in Escrow in order to best protect the property, it’s title and beneficiaries respective interests.
- IT MAY SURPRISE YOU TO LEARN THAT THE UNITED STATES IS ONE OF THE FEW COUNTRIES IN THE WORLD WHERE PROPERTY TRANSACTIONS HAVE ALWAYS BEEN IN THE PUBLIC VIEW. PUBLIC RECORDS ARE ACCESSIBLE TO ALMOST ANYONE UNDER THE “FREE OF INFORMATION ACT.” TODAY YOUR PRIVATE BUSINESS OF HOME OWNERSHIP OR PROPERTY INVESTMENT IS EVEN MORE IN VIEW BECAUSE OF THE INTERNET’S ABILITY TO STORE MERGE AND SERVICE UP DATABASES OF LEGAL DOCUMENTATION ACROSS MILLIONS OF COMPUTERS, CELL PHONES AND TELEVISION SCREENS.
- EACH DAY 1.3 MILLION REALTORS, DOING THEIR JOBS CAN LOOK ACROSS THE RECORDS OF MILLIONS OF INDIVIDUAL HOME OWNERS AND INVESTORS WHERE THEY CAN DISCOVER WHEN YOU BOUGHT, WHAT YOU BOUGHT, WHAT YOU PAID AND HOW MUCH YOU OWE. REALTORS USE THE INFORMATION TO DEVELOP A COMPETITIVE PRICE FOR BUYERS OR AN ACCEPTABLE PRICE FOR SELLERS. IN THE RIGHT HANDS THIS PUBLIC RECORD CREATES A KNOWLEDG LEVERAGE. It, ALONG WITH A REVIEW OF THE PROPERTY’S SALES HISTORY AND A LOOK AT THE DISTRESSED PROPERTIES IN THE NEIGHBORHOOD PROVIDE VALUABLE INSITE BECAUSE THE INFORMATION IS DRAWN FROM PUBLIC REQUIREDS RECORDED AT THE COUNTY FOR TAX RECORDS. LICENSED PROFESSIONALS … ATTORNEYS, ACCOUNTANTS AND REALTORS, ALL ARE GOVERNED BY ETHICAL RULES AT THEIR RESPECTIVE ASSOCIATIONS TO PROTECT YOUR PRIVACY. OTHERS MAY NOT BE SO ETHICAL. THIS PRESENTATION IS TO SHOW YOU HOW YOU CAN LEGALLY REMOVE YOUR PROPERTY FROM THE PRYING EYES OF LITIGATORS, REDUCE THE RISK OF MECHANICS LEINS, BUY A HOUSE OR SELL A HOUSE AND KEEP THE PRICE OFF THE PUBLIC RECORD BOOKS AND OUT OF THE MILLIONS OF PAGES OF INVASIVENESS THAT MAKE UP MUCH OF TODAY’S INTERNET SEARCHES, BLOGS, TWEETS AND FACEBOOK PAGES.
- Although not widely known and grossly under utilized by the vast majority of legal, accounting and real estate professionals, the land trust is in-fact, valid in virtually all states, (excepting only Louisiana and Tennessee due to those state’s characterization of use in trust and use in land being indistinguishable).
- The Florida land trust is highly respected by those who understand it as a foremost viable and a protective real property transfer and holding device. Vesting the property’s ownership with a land trust trustee effectively shields the property from virtually all legal perils (e.g., creditor judgments, IRS tax liens, divorce actions, bankruptcy, partition, charging order, probate, spousal claims, etc.). The Florida land trust is authorized by Florida Statute 689.071. It is important to know that, despite its relatively sparse use over the years, the Florida land trust model has been employed in real property transfer since 1963.
- Unlike other inter-vivos (“living”) trust structures, it is the beneficiary/ies and not the named trustee who holds the power of direction and management, or control over the actions of the title-holder trustee. In other words, it is the beneficiaries (you) who make all the decisions (100%) relative to the property, its title and any and all duties and actions of the trustee.
- In view of the fact that the property’s ownership is wholly vested in the nominated trustee, the property remains protected from virtually any legal action that would attempt to involve the trust’s beneficiaries or it’s property (even including attempted tax lien actions by the IRS). Although the beneficiaries can be sued in personam (against the person) for their own actions, a suit in rem (against the property) is not available to claimants.
- When money is exchanged for property, real or personal it comes under a legal transaction rule know as the Doctrine of Equitable Conversion. While the IRS continues to treat all beneficiaries of land trusts as owners of Realty for income tax purposes, the actual ownership by beneficiaries is that of personality (personal property versus real estate) and therefore protected under most state’s personal property law (IRR 92-105; The Doctrine of Equitable Conversion; Black’s Law, 6th ed, pp 332/538). This feature of the land trust form creates excellent protection from partition by judgment creditors, charging orders and outside creditor judgments and their resulting liens
- Another important feature of this very versatile transfer device is the simplicity of conveyance of the benefits of real property ownership to a second party without the need for lender involvement, new title insurance or formal escrow settlement. Now before we cover in detail the Privacy, Protection and Negotiating value of the Florida Land Trust, let’s deal with the crux of the matter. If you are going to move your property into a land trust by signing a Deed over to the Trustee and turning yourself into a beneficiary, won’t the lender call your note in?
- The Answer is yes if you do it wrong and no if you do it correctly. The benefits of real estate ownership can be effectively transferred to a named co-beneficiary without a violation of a mortgage lender’s “due-on-sale” admonitions relative to unauthorized title transfer (the due-on-sale clause…re. exclusions found in FDIRA 1982; 12USC1701-j-3: vesting a property’s title with a bona fide trustee in an inter vivos trust cannot be characterized as alienation of ownership or constitute cause for foreclosure). The subsequent letting (leasing) of the property by the trust and the naming of a remainder beneficiary (successor manager/director) are also fully allowable under the same title of the US Code. This bears repeating and illustration from the Code. Read it and weep, lenders…
- Federal Deposit Insurance Corporation Guidelines clearly elucidate that it is within the rights of every property owner to transfer their real property (residences and up to 5 doors) into a Land Trust without threat of a due on sale or foreclosure action. …a lender may not exercise its option pursuant to a due-on-sale clause upon— the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property; TITLE 12 > CHAPTER 13 > § 1701j–3 Prev | Next § 1701j–3. Preemption of due-on-sale prohibitions