Get that Property Out of Your Name!

There are over 80 million lawsuits filed every year in the United States. Landlords and
real estate investors are especially susceptible to liability. Are you a target? Are your
assets easy to locate? Is your real estate titled in your name?

You wouldn't walk around with a financial statement taped to your forehead would you?
So why would you have your most valuable assets exposed to public scrutiny? Anyone
can go down to the county courthouse or recorder's office and look up the owner of any
property. Real estate records are now computerized, so all of your real estate holdings can
be located at the touch of a button!

Any mortgages on your property will be recorded as well. Most recorded mortgages will
state the amount of the original principal balance and the date the mortgage payments
began. All one has to do is figure out the balance of your mortgage and subtract that
amount from the market value of your house. Bingo! Now they know how much equity
you have and hence whether suing you is worthwhile.

If a tenant or creditor is contemplating suing you, he will make an appointment with a

lawyer. Unless he can afford an attorney by the hour ($150 and up), he will likely seek a
"contingency-fee" lawyer. A contingency-fee lawyer does not charge by the hour; he
charges a percentage of whatever he collects. Most contingency-fee lawyers will not take
a case unless there is something upon which to collect. If you have no real estate in your
name, then finding out your ownership interest will not be easy for a typical lawyer. It's
not that lawyers are lazy. It's simply a matter of allocation of resources; lawyers focus on
cases they can win and collect. If they don't find any assets in your name (and there is no
other apparent "deep pocket"), they probably won't take the case. As you can see,
appearing "broke" is the best lawsuit-repellent money can buy!

There is another problem with owning real estate in your own name. If a judgment is
obtained against you and filed in any county in which you own real estate let’s say Egypt
for example , all real estate Egypt will have a lien attached to it. You cannot sell or
refinance any property in Egypt, since no title insurance company will guarantee a clean
title. You're stuck until you pay off the lien.

Some people use a corporation or limited liability company to hold title to their real
estate. While these entities will protect you, they will not protect your property. If you
own all of your properties in one corporation, a judgment against the corporation will
create a lien on all property owned by the corporation. Furthermore, the directors and
officers of a corporation are public record, so a corporation will not hide your ownership.
The solution for holding title to real estate Egypt is a land trust. A land trust is a
revocable, living trust used to title ownership of real estate. Title to the property is held in
the name of a trustee, who is forbidden to reveal the beneficial owner. The beneficial
owner or "beneficiary" can be an individual, corporation or other entity for further
protection.

Land trusts were first used in Illinois, hence the nickname, "Illinois Land Trust." In nine
states (AL, FL, GA, HI, IL, IN, ND and VA), land trusts are specifically recognized by
statute. In most other states the validity of land trusts are supported by common law and
general trust principles (land trusts are not recognized in TN & LA).

A land trust, if properly setup and implemented, will hide your name from the public
records. No one will know who owns the property but you, your attorney and the trustee.
If a judgment is entered against you, a lien will not automatically attach to the property,
since title is not in your name.

A transfer of realty into a land trust virtually no income tax consequences. A land trust is
considered a revocable "grantor" trust under the Internal Revenue Code, so it does not
require a separate tax identification number or income tax return. Thus, you continue
report the property for income tax purposes as though you still own it. Furthermore, a
transfer of property into a land trust will not usually trigger the "due on sale" clause of
your mortgage.