Land Trusts: An Estate Planning Tool

Carolyn Swafford, CTFA, Vice President/Trust OfficerSwaffordC_BUS014qc

Land trusts are a versatile legal tool for holding title to real estate. Individuals, investors, businesses and families all use land trusts to accomplish specific goals regarding the acquisition, ownership and transfer of property.

Land of Lincoln…and Trusts

Illinois is among only a handful of states that allows the creation of land trusts. Although the legal precedent originated in England, land trusts also began popping up in the United States. They first appeared in Illinois in the late 19th century and were used by real estate developers to acquire multiple parcels of land needed to build large-scale developments.

Using Land Trusts

Privacy is a popular reason to establish a land trust. Property can be deeded into a land trust either at the time of purchase or anytime afterwards. The trust becomes the owner of the property. The individual then becomes the beneficiary with all the rights, avails and proceeds to the property. Since the trust is the owner of the property, the beneficiary is able to keep their name off all public records.

As a legal tool, therefore, a land trust can be used to accomplish very specific goals. Here are three of the most common uses.

Protecting Business Interests

Land trusts are a great way to add a layer of protection between the beneficiary and the property that is contained in the trust. This protection ensures judgment claims against a beneficiary do not automatically become a lien on the real estate or otherwise cloud the title.

Bypassing Probate

If an individual or individuals are named to inherit the beneficiary’s interest after their death, the land trust is not subject to the probate process. This allows the remainder beneficiaries to manage or sell the real estate much faster.

Transferring Interests

When there are multiple beneficiaries in a land trust, there may be a time when one beneficiary buys another out. Individuals may also want to gift their share to another person. Transferring interests within a land trust is accomplished easily and quickly without the need to record public documents.

Flexible and Easy to Establish

Since a land trust is a legal entity, you will want your attorney to prepare the Land Trust Agreement and Deed in Trust. In cases where Old Second is named as the trustee, the necessary forms are downloadable from our website.

For more information on land trusts, click here or contact me directly at 630-906-5470 to discuss how this legal tool might benefit you.

 

 

How to Navigate the Wealth Management Milestones in Your Life

Jacqueline Runnberg, CFP®

Jacqueline Runnberg, CFP®Everyone travels a different path through their financial life. But like any well-traveled road, there are milestones along the way. Here are the common life events you are likely to pass through—along with a few roadblocks and detours—and a checklist of what you should be considering as you reach each one.

First Job

  • Understand employee benefits and employer-sponsored (especially tax-advantaged) savings opportunities for health care expenses, retirement and student loan repayment
  • Create a will and set up powers of attorney

Career Changes

  • Review the impact a change will have on your insurance coverage
  • Rollover your retirement account to keep savings on track and tax deferred

How to Navigate the Wealth Management Milestones in Your LifeRelationship Commitments

  • Talk about money with your life partner—different attitudes can be reconciled but not if they are unknown to one another
  • Know each other’s debt load and credit scores
  • Determine how your assets and income will be pooled together, saved and spent
  • Decide the best way to obtain health insurance coverage
  • Review your named beneficiaries on your employee benefits and in your will and power-of-attorney documents

Home Ownership

  • Buy what you need, not the maximum you can afford—it’s likely going to be your biggest asset

Side Trips
These events can require that you immediately revisit your portfolio allocation, named beneficiaries, and state and local laws affecting personal property, liability and estate settlement:
➢ Moving to a new state
➢ Starting a business
➢ Receiving an inheritance

Children

  • Review your budget for different spending needs
  • Initiate saving for future expenses
  • Revisit your will or trust documents and be sure to name a guardian
  • Start saving for college

Detours
To avoid unintended consequences, update documents that name beneficiaries and those for insurance coverage with these events:
➢ Divorce
➢ Unemployment

Retirement Planning

  • Determine what retirement means to you
  • Periodically reassess and gauge your progress
  • Plan for healthcare expenses
  • Understand your options and benefits under Social Security

Estate Planning

  • Consider that having more assets require more tax planning to ensure efficiency
  • Take into account beneficiary considerations
  • Preserve wealth as it grows and the process becomes more complex
  • Plan for your legacy

Roadblocks
Be prepared to reroute for:
➢ Illness or disability
➢ Changes in laws

Retirement

  • Test income plan before fully retiring
  • Determine the best withdrawal strategy for your circumstances

We’ve helped many generations of financial travelers plan for their journey and for any side trips, detours or roadblocks they might encounter along the way. Give us a call to meet with a wealth management representative today. We’ll help you determine the best route for realizing your financial goals.

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.