When people first hear the term land trust, or when they first wonder how much does it cost to set up a land trust, it can get overwhelming fast. Is it expensive? How long does it take? Is it worth it? Who can do it? So many questions that the common person most likely will not understand. This is why we created this guide about setting up land trust and teaching what you need to know, easily and quickly.
A practical way of ensuring ownership of real estate remains private, land trusts not only avoid the need for probate but are also tax advantageous.
Designed to protect assets and estate planning, land assets can be revoked or canceled when required. This means many land trusts allow for more significant adjustments to suit current circumstances.
However, when it comes to setting up land trusts, the potential costs are often at the foremost of people’s minds.
Here we consider the estimated costs of setting up such land trusts, looking at the concept of them in further detail.
How Much Does It Cost to Set up a Land Trust
What is a Land Trust?
A land trust is an agreement privately undertaken between that of a trustee and a beneficiary.
The idea of a land trust is that the trustee party holds a title to the property of the beneficiary party.
Along with this title comes a certain amount of rights, but trustees will work as the deed instructs them to do so.
What is The Procedure for Setting Up A Land Trust?
For most people, a law firm or dedicated trustee company is often the first port of call when setting up a land trust. This is especially so for those wanting to ensure all the correct procedures are adhered to. These services are primarily used because they’re not only knowledgeable about such issues but ultimately the more trustworthy of choices.
With many of them offering such services at reasonable fees and rates, finding the most reputable company is usually the first step in the process of beginning a land trust process.
What Are the Costs Involved When Setting Up a Land Trust?
When it comes to determining the cost of setting up land trusts, these can vary greatly. They will be defined by the trustee company or lawyer who you deal with.
Generally, such costs will cover one to two beneficiaries as well as that of taking care of the deed, the trust, the trustee’s first-year fee plus any other documentation required.
However, as a guide, these are some typical figures associated with setting up a single property land trust.
- Around $400 for a Basic Land Trust Setup. This is usually suggested for those who have familiarity with the subject of land trusts. This will involve you directly submitting the setting up forms, while the trusts are sent to you. Your closing agent will be dispatched the relevant information and necessary instructions to proceed.
- Around $500 for a Full-Service Standard Land Trust Setup. For those who have never completed a land trust before and would like additional help, a full-service set-up is recommended. This will involve a dedicated agent that works to ensure your transaction goes smoothly. From preparing the actual land trust agreement to getting those final signatures and closing, this package type would also be beneficial for those anticipating issues with the transaction.
- Around $750 or possibly more for an Extra Service Land Trust. You may know there will be specific issues or problems arising from your transaction. So, a full-service land trust would perhaps help you resolve such problems and help get your land trust set up swiftly.
- Around $100 per half hour for questions asked before deciding on setting up a land trust. You may be at the very first stages of implementing a land trust but as yet still need some further explanation. See some ideas at https://irishpaving.ie/ that you can implement. For those who need further advice on how land trusts work, you can opt for a consultation in person or over the phone.
Additional Costs Worth Considering When Setting Up Land Trusts
As well as the initial consultation session to get your land trust up and running, there are also other fees that you may have to consider besides. These include:
- Around $150 for an assignment from a seller or an assignment to a buyer
- Around $100 for an annual trustee fee
- Around $250 for an additional set up fee to add parcels to a trust
- Around $100 for an additional annual fee to add an additional parcel to the same trust
- Around $50 for an amendment to the trust for any simple changes
- Around $25 to $100 for a letter to be drafted to a government official
- Around $200 or more for a sale of property from trust
- Around $50 to $100 to review any extra papers or have them notarized after completion of closing package
- Around $100 for an emergency fee
- Around $40 for an authorization letter
- Around $25 for any bad checks that bounce
The Potential Benefits of a Land Trust
- The most significant benefit of a land trust is the privacy it brings with it. For some, this can mean avoiding potential litigations. It can also reduce the possibility of becoming potential targets as names are not recorded on any public real estate records.
- If there are multiple owners of a land trust, they aren’t punished should one of them have a legal judgment. This means that real estates are protected against potential legal actions should any arise against the other owners.
- Land trusts can offer ease of convenience. This means that they make it easier when transferring property ownership to heirs. Thus, lawyers or courts are not needed to get involved in the process.
The Potential Disadvantages of a Land trust
- Land trusts will not protect those property owners from all liability. Some people assume they are immediately protected through land trusts. But, they then find court’s ruling that the real property owner is liable in certain instances – as opposed to the trustee.
- Land trusts do not offer indefinite and invincible privacy. Once again, a court can determine full disclosure of property ownership in several criminal and civil complaints.
- Contrary to popular belief, land trusts, though tax advantageous, do not eliminate the need of payable taxes entirely! The IRS will demand land trusts, like all other trusts, to file.
Final Thoughts on Setting Up a Land Trust
In concluding, if you want to go about creating and setting up a solid land trust, then utilizing the services of a knowledgeable trust company or lawyer will undoubtedly pay off long-term.
With many a choice of set-up options varying in price, costs for a suitable land trust service will usually set you back somewhere around $300 to $500. Yet they will no doubt offer continued peace of mind alongside full protection in the process.