Land Trust without Beneficiaries

Chicago, Illinois

My Mother passed away in January without a Will. Most of her assets had beneficiaries named, but her house was in a "Land Trust" here in Illinois that does not name any beneficiaries. The trust was originally created when my Father was alive and my Mother was the only beneficiary. My brothers and I would like to sell the house when the market turns. What can we do to get the trust in our names? Thanks.

hopefully one of the lawyers can give you an exact answer.

but i have never heard of a trust without a beneficiary. i realize that your mom was the lifetime beneficiary.

there are a few items that must be in a trust, for it to be legal. there are many defaults when a trust does not mention an item in particular. it is in the trust code. but i am pretty sure that you have to name a trustee, and probably at least a format with which to pick a successor.

i always have a beneficiary in my land trusts, should i pass away.

while people can prepare their own trusts, they need to know what they are doing. not to put in a "contingent beneficiary" is like not knowing how to add 1 plus 1.

i dont know what the rules are, so i will give you what i think a judge should rule, if the attempt is to be fair. if i were said judge, i would have to rule that the land trust should be given to beneficiaries with the intestate rules of that state. in other words, treat it as property owned by someone who died without a will, and then use the rules of the state to determine who gets what.

that is just my opinion of what i think would be fair.

i am curious what anteater and tranquility have to say about what actually does occur.

I'm not even going to hazard a guess about something outside of my state where common terms are used. Legal jargon is important as a small word or phrase can describe a book's worth of case law and precision helps guide in the factual detail. I see neither legal jargon nor precision in the post. After reading these thing here a long time, you develop a certain sense of how you will have to pull teeth out of the OP before one gets a true sense of things and, even then, we will run up against the wall of the OP's knowledge.

Sorry, I can't play on this one.

TrustUser:

The Land Trust was prepared by a local Bank and Trust here in Illinois, and the Bank is the Trustee. From what I understand, Land Trusts are very common in Illinois as a way to protect an owner's identity. Based on Illinois intestate rules, it seems pretty obvious that the beneficiaries would be the three sons. I guess my question is more related to whether we need to go to probate court or can we work with the Trustee directly to "amend/add" our names to the Land Trust.

tranquility:

It seems you know nothing about Land Trusts, yet you felt compelled to waste all of our time stroking your ego. I'll be the first to admit I know very little about Trusts, which is the reason I came to this forum in the first place. I spend a lot time on technical sites learning and helping others with programming-related issues. I'm actually very good at it, but I can't imagine responding to a "newbie" in this manner.

Wondering if it's anything like I'm in the middle of ... I am the beneficiary of a trust. I received the trust. I now have to re-do the trust with MY beneficiaries. If anything were to happen to me before I get the paperwork filed, my children will be in the world of hurts (have been waiting for a little thing called $$ to redo this.)

This will need to be untangled by an experience attorney. I wouldn't even attempt to tackle this pro se.

I may not know much about land trusts (as that term is imprecise as I already wrote) and what is common in Illinois as that is not my state, but I do know that the general term "trust" needs a beneficiary. You don't have one. Where do we go from here? Well, we would need a lot of facts, like the specific creation and process and wording of the trust. See an attorney. You are not going to get help from the forum because help is unavailable without a lot more. Even if all the facts were known, I bet an experienced IL attorney who practice area specalizes in "land trusts" would need to spend some time in the library to figure out the next step.

hank,

the land trust is actually fully named the "illinois land trust", because as you might have guessed, it originated in illinois. LOL.

but it is typically just referred to now as a land trust, because it is in widespread use in many states. certainly mine here in california.

there is a big difference in it, versus other types of trusts. the main gist is that the trustee can act only on the direction of the beneficiary. the trustee really doesnt do anything, except sign the documents that the beneficiary asks him to.

but it keeps the names of the beneficiaries off the public record, so it is great for privacy.

but it should still name a contingent beneficiary. and this was drawn up by a bank ?

i cant see how the trustee could amend the trust to add your names. i have never seen a land trust give a trustee that sort of power. as i said, the trustee usually has no power at all based on his own discretion.

well, here a few thoughts. the trustee should still be able to sell it, as there should be no problem with clear title. but how that trustee is supposed to distribute the proceeds is not at all clear to me - which is why i am interested to see how it eventually plays out.

what i do with my land trusts is something like this. while john smith is alive, john smith is the sole beneficiary. when john smith dies, then his kids are the beneficiary.

so there is some sort of language of ownership, if john smith dies.

otherwise, it seems to me that it has to go before a probate judge, which defeats one of the main reasons for the trust, to begin with.

since the trustee is the bank, why not call them with your question ?

well, here a few thoughts. the trustee should still be able to sell it, as there should be no problem with clear title.

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Why do you say that? Would a land trust allow the "trustee" unfettered right to sell? Let's say he sold it for a dollar, it would clearly be a breach of fiduciary duties, right? How about for an amount based on comps? What if the eventual beneficiaries disagree with the price or if they wanted the property as their family home? Would it be a breach then? I'd say yes. I bet the land trust has a provision that, absent a need (say to pay property taxes or the like) the trustee must get permission from the beneficiary before sale if for no other reason to prevent fiduciary breach. As a more direct violation, as you said: "the trustee usually has no power at all based on his own discretion".

but how that trustee is supposed to distribute the proceeds is not at all clear to me - which is why i am interested to see how it eventually plays out.

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Why can he sell again?

otherwise, it seems to me that it has to go before a probate judge, which defeats one of the main reasons for the trust, to begin with.

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At the bare minimum, we could predict that probate will have to be opened on the last named beneficiary.

since the trustee is the bank, why not call them with your question ?

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But, remember, the bank has a motivation to keep things in trust.

Which brings us back to the start. An attorney is needed. Probate will probably be opened. An heir search will need to be done. Motions and pleadings presented on what to do with property with no equitable ownership through a poorly created document. We know that all land trusts are not the same. As is seen here. So, OP, stop telling us this is standard and that things are easy and see an attorney. We still don't have the information needed to even hazard more than a guess at the specific steps. We still have an imprecise term which can vary. And, I've still wasted my time here as predicted.

TrustUser: i am curious what anteater and tranquility have to say about what actually does occur.

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I guess I should say, "Thanks for the vote of confidence." But I know when to avoid subjects with which I am not familiar and the information is skimpy..

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Abusive Trust Tax Evasion Schemes - Special Types of Trusts
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Illinois Land Trust
In Illinois, and in five other states, legislation has been enacted that creates a special type of trust, commonly referred to as an "Illinois Land Trust". These trusts are designed to house real estate within a grantor trust and provide limited access to grantor or beneficiary information contained in the trust instrument or known to the trustee. Once a land trust is established, the ability to trace property transactions becomes limited as state law establishes the right of the trustee not to disclose the true owner of the property or those with a beneficial interest. The "land trust" has no special distinction in the Internal Revenue Code and would be a simple, complex, or grantor trust depending on the terms of the trust instrument. Filing requirements would depend on the type of trust.
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http://www.irs.gov/businesses/small/article/0,,id=106553,00.html

hi tranquility,

good point. when i was thinking "sell", i was thinking clear title. but the typical land trust gives the trustee "rights", only based on direction from the beneficiary. and since we are now unclear as to who the beneficiary is, who is supposed to be giving direction now ? LOL.

i stand corrected. it would be interesting to hear from a title officer how they handle land trusts. notably, do they check that there has been approval from the beneficiary if the land trust document says that it must (which they pretty much all do).

Illinois Land Trust issue

There are two main options you have in this case for without naming contingents the beneficial interest in the land trust vests in your mother's estate:

1. If the total value at the date of death of your mother is under the stipulated Small Estate Affidavit, value of $100,000, then the Small Estate Affidavit along with the Affidavit of Heirship can be completed and provided to the land trust company. This can go via the Small Estate Affidavit because a beneficial interest in a land trust is a personal property interest. The land trust department will then take direction of the those named heirs of your mothers;

2. If the total value is above the small estate affidavit amount, unfortunately you will have to at minimum open an estate in your county probate division and get letters of office naming an administrator (no will). That named administrator can then direct the trustee to deed the property out.

Since the trust fails for lack of ascertainable beneficiary, why doesn't it revert to the grantor (father) rather than the holder of the lifetime interest?

hi tranquility,

i cant say for sure without looking at the document, but it sounds to me that the mother became the official beneficiary of the property when her husband died.

she would be the new owner, and be able to do with it what she wants.

so it seems to me that it would be more likely that it would be part of her estate, instead of her husband's estate.

with my land trusts, i always make the beneficiary a trustee. the only trust that i have that names individuals is my main trust. and in that trust, each individual has the option of naming his own beneficiaries.