Real Estate Investing Information Blog

A land trust is a concord whereby one party (the trustee) agrees to hold ownership of a piece of real property for the advantage of an extra party (the beneficiary). Land trusts are used by nonprofit organizations to grasp conservation easements, by corporations and investment groups to compile huge tracts of land, and by individuals to stay their real estate ownership private, avoid probate and provide several other benefits.

A community or conservation land trust is an organization recognized to hold land and to administer use of the land according to the contract of the organization. A land trust is a helpful way to manage multifaceted divisions of the Bundle of Rights that people can own in real estate, and can be used to handle something as large and complex as a multi-state REIT, or as ordinary and small as a single-family home.

Corporations sometimes set up land trusts when they want to collect large tracts of land without arousing doubt or alerting people to their plans. For example, the land for Disney World near Orlando Florida was put together by using several land trusts to buy smaller tracts of land.

Individuals use land trusts mostly for privacy and to avoid probate. No one knows what one's bank equilibrium or stock investments are, yet anyone with an internet connection can seem up a person's real estate holdings. A person who has an auto accident or a doctor who accidentally injures a patient is a much improved target for a lawsuit if he or she owns real estate investments. So several investors buy their properties in land trusts so their name does not show in the public records. The land trust also allows the property to directly pass to their heirs at the moment of death, rather than go through a long probate process.

Investment trust companies grasp property for investment purposes and non-citizens who want long-term contact to land in Mexico often enter real-estate trust agreements, called fideicomiso, with Mexican citizens, but land trust additional often refers to a community scale organization. Community land trusts are recognized to provide low- and middle-income families access to affordable housing while conservation trusts defend environmentally, historically or culturally valuable places. Land trusts are also in place to defend farmland and ranchland. Despite the use of the term "trust," many if not most land trusts are not officially trusts, but rather non-profit organizations that hold easy title to land and/or other property and manage it in a manner reliable with their non-profit mission.