Buying real estate in a trust

[brutus1776]

What is the name of your state (only U.S. law)? TN

i am in the process of possibly buying a home/farm with owner financing. i will be putting down 20-30% of the purchase price and the owner will be holding the note for the rest of the amount due.

i want to purchase the property in a trust for privacy and estate planning reasons. my question is, how will this work with the owner financing that i personally would be responsible for? i don't want to scare off the seller when we would go to settlement and have them think that i wouldn't personally be responsible for loan. is this possible?

or if its easier for me to purchase the property in my name, and if there is a mortgage on the property, is it as simple as me going to an attorney and changing the deed with the state into the name of my trust? or would the note have to be paid off before it could be put into trust?

what are the approximate legal fees to set this whole thing up?

im just trying to get a basic understanding before i visit a lawyer.

thanks for any insights.

 

[HomeGuru]

What is the name of your state (only U.S. law)? TN

i am in the process of possibly buying a home/farm with owner financing. i will be putting down 20-30% of the purchase price and the owner will be holding the note for the rest of the amount due.

i want to purchase the property in a trust for privacy and estate planning reasons. my question is, how will this work with the owner financing that i personally would be responsible for? i don't want to scare off the seller when we would go to settlement and have them think that i wouldn't personally be responsible for loan. is this possible?

or if its easier for me to purchase the property in my name, and if there is a mortgage on the property, is it as simple as me going to an attorney and changing the deed with the state into the name of my trust? or would the note have to be paid off before it could be put into trust?

what are the approximate legal fees to set this whole thing up?

im just trying to get a basic understanding before i visit a lawyer.

thanks for any insights.

**A: very easy. The Buyer would be the trust and you would be the personal guarantor. Get your attorney involved and make sure there is no due on sale clause in the seller's mortgage note.

 

[brutus1776]

thanks for the reply.

if the property is bought in my name/my name on the deed, and there is still a balance due on the note, can the property be placed into a trust? or does the note need to be paid off completely before this is done?

 

[FlyingRon]

Yes, you can move deed the property from your name to the trust and as long as you are one of the beneficiaries of the trust a due-on-sale clause can not be executed.

 

[brutus1776]

i had super quick conversation with a mortgage broker friend today and he said its about impossible to get a title company to deed a property to a trust... any truth to this??!?!

other people are telling me that the name of the trustee's show on county records and not just the trust name. is this different from area to area? can a living trust be named something besides " the living trust of john doe ? "

thanks again

 

[Pojo]

What or whom are you trying to hide the property from?

 

[FlyingRon]

Huh? People title things to trusts all the time. If you couldn't what would be the point. I've not had any trouble. Now trying to title in a in vivo trust with a non-obvious name may raise eyebrows, but nothing prevents it. However, yes the trustee is going to be shown on the deed.

The in vivo trust doesn't really allow you to hide the real owner of the property. What it does do is allow it to be transferred on your death with out public scruitiny that an probate (which is a matter of public record).

Giving the trust a non-obvious name might deter people looking up things purely by title, but if someone goes down and searches the actual documents, it's not going to be hard to figure it out. Second, unless you do NOTHING ELSE with that property address: no phones, no use on financial statements of any kind, no drivers license, no voter registration, etc... etc... you're not really making yourself unknown at that address.

 

[brutus1776]

im would not be trying to 'hide' the property anyone per se, just like if i have an unlisted phone number, i wouldnt be trying to 'hide' from the law or anything, i just like privacy. this will be the first property i would be buying and i'm not to big on the idea that anyone can find what properties i own and where, on the internet at the click of a mouse.

thanks for the answers to my questions.
the trustee is on the deed in a living trust.
not really interested in keeping my 'address' unknown, just merely that i own said property.

as far as judgements against you, if you place your property in a living revocable trust, 'they' can still get to it, correct? whereas an irrevocable trust would offer much better asset protection?? however, in such a trust the grantor cannot also be the beneficiary, or trustee, correct?

 

[FlyingRon]

Actually, in some places a trust loses protections. But generally, no. A revocable trust makes no difference to judgments or taxes. It's primary function is to facilitate the disposition of the property after you die. It bypasses probate for things titled to the trust and you can make specific provisions as to what happens to the property that are much more involved than you typically can in a will. The trust lives on (but becomes irrevocable) on your death.

Like I said, you can give the trust a nonobvious name like "The Brutus Trust" and if you have an online site that looks things up like that they might not see "John Smith, Trustee" or not. However if you've got a really up to date county tax/records department the deeds themselves may be on line.

Further, even on relative LAME sites like my county, while the name of the Trust first shows up, if you look down the page you see the previous $0 conveyence from me to my trust as well (and those real estate valuation sites probably have this archived as well).

An irrevocable trust has it's own issues.

I suspect you would be best served to find a lawyer who is experienced in estate (typically these are the trust guys) and real estate issues and talk to them about what you want to accomplish and let them handle the paperwork. Mortgage brokers are by and large idiots. I'd never trust a mortgage broker alone to shine my shoes let alone even give me advice on mortgages or more complex real estate issues. It's not even intended to be part of their expertise. Let your lawyer handle the closing and everything will be named properly on the paperwork.

 

[HomeGuru]

What or whom are you trying to hide the property from?

**A: from the Watchmen.

 

[Pojo]

>>im would not be trying to 'hide' the property anyone per se, just like if i have an unlisted phone number, i wouldnt be trying to 'hide' from the law or anything, i just like privacy. this will be the first property i would be buying and i'm not to big on the idea that anyone can find what properties i own and where, on the internet at the click of a mouse. <<

Go to google.com and google your name and address then look at the list of people willing to sell you everything you ever wanted to know about "brutus" and some of them actually CAN.

Heck just google your username here and see what comes up.

My point in asking was that if you had, FOR INSTANCEno accusation here, said child support, IRS, an ex I would have told you that you can't hide.

>>Huh? People title things to trusts all the time<<
Yes, WE do!

 

[brutus1776]

thanks flying ron and pojo.
im getting a better understanding.

pojo you mention, for instance hiding from the IRS, an ex, etc... if your property is in a irrevocable trust and i do not own it, they would not be able to touch it, correct? or am i missing something.
what about in a living trust?

what about a law suit, etc. if my house is in any sort of trust it would still be able to be taken? is this true for both revocable and irrevocable?

 

[HomeGuru]

thanks flying ron and pojo.
im getting a better understanding.

pojo you mention, for instance hiding from the IRS, an ex, etc... if your property is in a irrevocable trust and i do not own it, they would not be able to touch it, correct? or am i missing something.
what about in a living trust?


**A: it depends.


######
what about a law suit, etc. if my house is in any sort of trust it would still be able to be taken? is this true for both revocable and irrevocable?

**A: see above.

 

[Pojo]

You cannot buy home until the existing owner pay balance due on the note. First the note have to be paid off then you can buy that home. Otherwise you will be in trouble. Beware.....!

Darn why didn't one of us think of this before now this will really help the original questioner!