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 Pictured left to right: Fred Moore Senior Vice President, Trust Officer Mary Kay Burke Assistant Vice President / Trust Officer Julie Winistorfer Assistant Land Trust Officer  
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Land Trust WHAT IS A LAND TRUST? The Land Trust is a simple and inexpensive method of handling the ownership of real estate (single family residences, apartment buildings, condominiums, commercial buildings, vacant land or farm land). Both the legal and equitable title to the real estate is vested in the Trustee, but at the same time all rights and conveniences of ownership are exercised by the beneficial owner (beneficiary) whose interest is not disclosed. The Trustee has no duties or powers other than to convey, mortgage, or deal with the real estate as directed by the beneficiary. The rights of possession, management, control and operation of the property, as well as the rights to rent, profits, and proceeds of either sale or mortgage financing are vested in the beneficiary. The rights, privileges, and obligations of the beneficiary are not interest in real estate, but are expressly characterized as personal property. The Land Trust may be terminated at any time, and additional real estate may be added to it at any time. However, only ILLINOIS property can be deeded into an Illinois Land Trust. WHO CAN CREATE A LAND TRUST? A Land Trust may be created by anyone capable of entering into a contract. It may be created by an individual, a group, a partnership, a corporation or other business entity. It has become a favorite method of holding real estate by builders, subdividers, partnerships, corporations and professional groups. PRIVACY OF OWNERSHIP The real estate owner is entitled to as much privacy in his real estate transactions as is the owner of stocks and bonds. Your identity as beneficiary is not disclosed to the public without your permission or unless authorized by the agreement or required by law. Certain governmental agencies, through a valid legal process, can inquire as to the beneficial ownership for a legitimate purpose. This is particularly useful in landlord-tenant relationships and by owners who desire that their interest be kept confidential so as not to be burdened with inquiries. AVOID PROBATE EXPENSE & DELAY When property is held in a Land Trust, probate is not necessary to pass title at the owner's death since the Land Trust Agreement provides for succession of ownership upon the death of the beneficiary. By providing for succession of ownership in the Land Trust, the beneficiary can be assured that whoever he/she chooses can enjoy the use of the real estate after the death of the beneficiary, without being granted an immediate interest in the ownership of the property. The death of a beneficiary, absence from the state, illness, divorce, incompetency or incompatibility does not terminate the trust or affect the title to the real estate, thus affording protection from the risks involved in joint ownership. PROTECTION AGAINST CLAIMS A judgement against a beneficiary of a Land Trust during the existence of the trust does not in itself create a lien against the legal title to the real estate. The interest of a beneficiary is personal property. Judgement and liens against a Land Trust beneficiary do not constitute a lien against the trust property since his interest is considered personal property. The beneficiary's interest is not immune from the just claims of his creditors and the Land Trust may not be used to defraud them. The creditors must take additional steps to assert claims against trust property. DISPOSING OF PART INTEREST A Land Trust simplifies the practical problem of disposing of a part interest in a property. Once the real estate is placed in a Land Trust, it is not necessary to sign a deed or execute a real estate contract or transfer a beneficiary's interest. This aspect of the adaptability of a Land Trust becomes especially important when real estate is held by a number of persons, such as a group of heirs, or if the owners have unequal shares of the property. NO PARTITIONING When two or more people share in the ownership of real estate there is a possibility of differences of opinion. Real Estate held in a Land Trust is not subject to a partition suit under Illinois Law. Therefore, one beneficiary cannot force the sale or division of jointly owned property. COLLATERAL USE There are times when a need arises to obtain a bank loan for various reasons. If you need collateral for a short-term loan, you can assign the beneficial interest as collateral more easily that securing the loan by a real estate mortgage. The beneficial interest may be pledged as collateral even where there is an existing mortgage against the real estate. SIMPLICITY OF CONVEYANCE A Land Trust affords a convenient means of mortgaging and selling trust property without having to obtain deeds, releases, waivers of homestead, etc., from all the beneficiaries and their spouses. This is especially useful for multiple ownership, or when many parcels of real estate are to be held in a trust, since one or more of the beneficiaries may exercise the power of direction on behalf of all the beneficiaries. These are only a few of the many advantages that a Land Trust can provide. One of them may be particularly suitable for you. They all provide security and convenience in today's complex society. HOW DO YOU CREATE A LAND TRUST? A Land Trust can be created at the time real estate is purchased or at any time thereafter. It can be established with a minimum amount of time and effort by signing a short one-page document called a Trust Agreement with PALOS BANK AND TRUST. The title can be conveyed to PALOS BANK AND TRUST as trustee by a form of deed in trust after the Trust Agreement has been formed. The owner (called the beneficiary) has full authority and power to direct the Trustee in all matters affecting the real property. The beneficiary designates who will succeed in ownership upon death, and when and to whom the property should be sold. Also, the beneficiary will direct the Trustee to execute any documents concerning the Trust.
PALOS BANK AND TRUST is here to serve your complete estate planning needs. Our Trust Officers welcome the opportunity to meet with you . . . and with the assistance of your attorney can provide maximum security for your family and frequently save you thousands of dollars in unnecessary tax and probate expenses. The above is intended simply as general information and not as legal advice. Specific legal advice should be obtained only from your attorney.
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