Selling Property in a Land Trust

There exists a way for you to own a property that does not involve putting your name into the public record. This can be done through land trusts. Many property owners choose to do this because they are very sensitive to the fact that their personal information will be available to the public. For example, wealthy businessmen and celebrities who want to keep their real estate plans under wraps usually choose to hide their developments using land trusts.

In this article, we’ll give you an idea of what a land trust is and how you can possibly sell a property that is held in a trust.

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Land Trust in Real Estate Explained

A land trust is an organization that, at the request of the property owner, assumes control or ownership of a piece of land. Nonetheless, each land trust's terms are distinct and can be customized to meet specific requirements.

In some cases, the landowner who is both the trust grantor and the beneficiary can set up the trust in a way that he will remain the only person who can manage, control, and specify ways to distribute the income of his property. By doing this arrangement, the land trust can appear to be the title holder on paper, but the actual land owner retains full control.

There are three most common types of land trusts that exist in the United States. They are mainly differentiated based on how they are structured and how they operate but the essence is the same. These three land trusts are an investment trust, a conservation trust, and a community land trust.

1. Investment trust - A real estate investment trust is an organization that buys properties. A trustee oversees the administration of this trust on behalf of the beneficiaries.
2. Conservation land trust - A private, nonprofit organization called a conservation land trust buys land and easements to restrict development in specific locations. Most of the time, the goal of a conservation land trust is to preserve wildlife, historical or cultural sites, and natural resources from commercial development.
3. Community land trust - This trust, which is also nonprofit, works to purchase inexpensive housing and develop land for diverse uses.

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Benefits of Land Trusts

Now that we have explained what land trusts are, let’s go over some of the benefits that you can get if you decide to put your property inside one. This list is not exhaustive but these are some of the most common perks that you’ll get by putting your real estate in land trusts.

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1. You will maintain anonymity - If your property is held in a land trust, your name will not be reflected on the record as the owner. Therefore, no one would know that you own the land. The trustee is not allowed to share this information with anyone, unless during a legal proceeding where a court will compel them to do it. Otherwise, the anonymous status of your owning the property will give you peace of mind over things that you want to avoid such as sales calls from real estate agents.
2. Preservation of land - Large swaths of land can be preserved for future use by holding property in a land trust. Developers whose business it is to acquire and hold onto possible development sites while they are in the planning stages may find this benefit helpful.
3. Conservation of natural resources - Some people who are very concerned about the environment will go to great lengths to preserve natural scenery. One way of doing so as mentioned above in one of the three most common types of land trusts is by putting parcels of land into trusts that focus on conservation. By doing this, these nonprofit organizations can build easements into these properties in order to prevent people from developing certain areas.

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What’s Unique About Land Trusts

One more distinction that you might want to know about land trusts is that it is possible for you to earn a big tax break if you donate development rights to one.

If you are a landowner and you decided to donate your development rights to a conservation trust, you can be eligible to receive a tax break. This is a typical practice in families of landowners and ranchers who have owned large properties for generations.

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Some Examples of Land Trusts

The Walt Disney Resort in Orlando, Florida is one example of a land trust. In 1965, the property was purchased by Walt Disney through an investment trust. At that time, the original owner of the property was not aware that the company behind the purchase was Walt Disney, or perhaps they would have demanded more money when they sold the property.

One most notable examples of a conservation land trust would be the Ozark Land Trust. The trust is a non-profit organization that helps preserve 28,000 acres in the Ozark Region against urban development. They can achieve this by establishing nature preserves and conservation easements.

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Selling a Property Held in a Trust

If you have a property that is held in a trust and you want to sell it for whatever reason, it is entirely possible. Selling a trust-held property is almost the same as selling a property that is registered under your name, the only obvious difference is that your buyer will see your trust’s name in the documents instead of yours.

However, be sure to take a look at your agreement with your trust before you take steps in selling your property. Make sure that you have the legal right to sell the property. Once you have that taken care of, then you should be good to go.

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