Property Ownership, Real Estate Trusts Flashcards
Trust
An estate planning vehicle in which property is owned by an entity controlled by the trust maker.
Example Kyle put all his property and to Trust so that in the event of his demise, his assets could pass to his heirs outside of probate
Trust
A Trust is a special relationship called a fiduciary relationship that is created between the trustee and the trust store. The trust store is the person who creates the trust. The trustee is the person who carries out the trustors wishes.
Trustor
The individual creating the trust
Grantor, settlor conveys title to trustee
Example Lisa’s parents, as trustors, decided to make Lisa the trustee as she has always been the sensible one of the children.
Trustee
The person in charge of caring out the term of trust
Example Lisa was the trustee for the parents estate, and acted on behalf of her self, and her siblings as beneficiaries
Beneficiary
The person who receives the benefit of the trust
Trust agreement
Instructions of the trust. Held privately, and not filed with the court. the cost to maintain the trust include payment for the trustee for minimal fees and operating expenses.
Testamentary trust
Created, according to the terms of the will of a deceased person. Unlike, living trust, testamentary, trust do not avoid probate.
This is not the choice of trust that works best
A type of trust is created during a persons, lifetime, and often used when minor child is involved. The property may be placed within the trust for their use in their lifetime, or when they reach an age, determined by the person who creates the trust. In the meantime, the trustee will manage it for them, according to the terms of the trust.
A living trust
Is created to dictate terms care in the event, the trust maker becomes incapacitated
Testamentary trust
Is created, according to the terms of the will of a deceased person. Unlike living trust, testamentary, trust, do not avoid probate.
All Estates must go through probate? True or false
False
Property held within a living trust avoid probate, true or false?
True
A living trust is created during a persons lifetime, and is establish to convey property
True or false
True
A Testamentary trust is created, according to the terms of the will of a deceased person
true or false
True
Both living and testamentary trust avoid probate
True or false
False
Beneficiaries are not responsible for the cost of administering a testamentary trust
True or false
False
The maker of the trust
Trustee
Trustor
Beneficiary
Trustor
The person in charge of caring out the terms of the trust
Trustee
Trustor
Beneficiary
Trustee
The person who receives the benefit of the trust
Trustee
Trustor
Beneficiary
Beneficiary
To create a trust, the Trustor usually conveys property to the trustee with instructions, regarding how the trustee is to hold and manage it on behalf of the beneficiary
True or false
True
The role of the Trustor and trustee cannot be held by the same person
True or false
False
Spouses may transfer real and personal property into a trust and the name themselves as joint trustees with rights of survivorship
True or false
True
In the case of a married couple, after the death of the second spouse, the estate is distributed to the beneficiary or beneficiaries named in the trust
True
The creation of a trust is a legal process that is best handled by Atturny’s
True or false
True
There are no cost associated with maintaining a trust
True or false
False
Land trust
Has privacy, unless under court order.
Ease of conveyance : beneficiary interest in the land can be conveyed without having to go through the formality of a deed. Interest considered personal property to beneficiary even though interest conveyed is in real property.
Can be changed by the Trustor at any time until death
Specified term such as 10 2030 years, then the trustee must either extend the trust term when it expires or sell the real estate and provide the proceeds to the beneficiary
What are negatives and positives of a land trust
Negative: lam, trust is revocable, trust, implying that it doesn’t offer any asset protection
Positive : transfer title to an LLC to protect their other assets. The land trust will prevent a bank from accelerating the mortgage note when the property is put into an LLC. The property would have protection from the LLC because of the liability it rolls from the trust to the LLC and that’s where the liability stops.
Lam, trust is set up with the property owner as the trustee and the third-party as the beneficiary.
Protected under Garn, Saint Germain act the federal depository act. This prevents lenders from accelerating notes whenever there’s a transfer into a grantor trust.
What are other reasons land? Trust me also be helpful.
The state will impose a doc stamp
Moving the property to LLC would create a taxable event
When a property is paid off, it’s unencumbered and the owner desires anonymity.
With a land trust, the person who establishes the trust(the Trustor) can’t also be the beneficiary
True or false
False
Usually the person who establishes the trust is also the beneficiary
Land trust must be created at the time the real estate is purchase, not after it’s been acquired
True or false
False
Are under a land trust, the owner directs, a corporate fiduciary to hold title to the real estate, and provides instruction for the management, Control, and disposition upon the owners death
True or false
True
Lantrist generally don’t have a specific term
True or false
False
10, 20, 30 years is usually a common term once expired, the trustee renew, or sell the estate, and give the proceeds to beneficiary
When the land trust term expires, the trustee must either extend the term or sell the real estate and provide proceeds to the beneficiary
True or false
True
Summarize a land trust
Eleme Trust is formed specifically to hold real estate. Real property is the only asset within the trust.
Under a land trust the owner directs a corporate fiduciary to hold title to the real estate for a specific term (10, 20, 30 years) and provides instructions for management, Control, and disposition upon the owners death.
When the land trust term expires, the trustee must either extend the term or sell the real estate and provide the proceeds to the beneficiary.
What are four benefits associated with land trusts?
A beneficiary interest in the land can be conveyed without having to go through the formality of a deed.
A land trust is a grantor. Trust that is revocable.
Asset transfers into trusts are protected by the garden, Saint German depository, institute act
The identity of the Trust owner is not made public
