How do I create a trust for my land investment business?

Tax & Legal
1

Is there anyone on this forum who is familiar with creating trusts that can help me create one that is specifically suited to the needs of land investors?

For purposes of smoothly transitioning all my properties to my children and grandchildren someday, I find the argument that I should put all my properties into a trust very persuasive. I have been watching YouTube videos on this, and particularly those filmed by California attorney Edmund Yan, who specializes in teaching people how to create their own trust. I talked to a law firm that said the work to create a trust started at $3000. Definitely I am going to do it myself if I possibly can.

I find that as a land investor there are things I need to know that perhaps others do not. First, I guess the matter of creating the trust per se is standard, but there may be special considerations I should be aware of. Then there is the matter of transferring several dozen properties into it. Is there a way to expedite this one-time project? I realize a deed needs to be created for each one, and that raises a question. The videos I have been watching say to use a warranty deed form or a quitclaim deed form. However, that does not cover all the permutations. Some of the deeds I have received from the states are special warranty deeds. One county in Pennsylvania issues what it calls “repository deeds.” In transferring the deeds to my trust, shouldn’t I keep the original designation? And if the answer is yes, do I take a template for say, a quit claim deed and substitute the words “special warranty deed” or “repository deed”?

Then there is the matter of making changes to the trust. Most of the videos I watch assume this will rarely happen. They tell you to create the trust with a lawyer and on the rare occasions you want to make a change, just let him know what this is. This advice is of no use to a land investor who is buying and selling properties all the time. I need to know how to access the text of my trust (where is the trust filed, by the way?) so as to frequently change the inventory of properties. As circumstances in life change, I may also want to change the successor trustee and the names of the beneficiaries and the particulars of what each will receive. In other words, any trust I create will be a living structure that I need to be able to change as my circumstances change. There must be a better way than adding page after page of amendments, or alternately creating a new trust each time I want to make a change.

Then there are details, such as in addition to putting my personal bank accounts into the trust if I choose, do I create a bank account in the name of the trust and conduct all of the trust’s finances out of that account?

Please do not reply that I should go to a lawyer. I will just have to reply that I really want to explore doing it this way.

I look forward very much to the insights you can give me.

2

Hey there! I went through something similar, so I get what you’re saying about making a trust that actually works for our unique situation.

I’m no attorney, but I think you’re on the right track with a revocable living trust - it gives you the flexibility to make changes whenever you need, which is super important when you’re actively buying and selling properties.

For transferring all those properties, you’re absolutely right to question the deed types. You’ll want to maintain whatever the original deed type was (special warranty, repository, etc.) rather than just using a generic quitclaim for everything. I learned the hard way that you can’t just swap words on a template - each deed type has specific language. I found my county recorder’s office actually had formats they preferred, and I adapted those for my trust transfers.

About managing changes - one thing that surprised me was that the trust document isn’t officially “filed” anywhere except when you record property deeds. You just keep the original and make copies. What worked for me was creating a separate schedule of assets as an exhibit to my trust, and structuring it so I could update that schedule without doing full amendments every time. I also included language that automatically incorporates future properties I might acquire.

And yes, I definitely recommend opening a bank account in the trust’s name for all the trust-related transactions. Makes everything so much cleaner for accounting purposes.

I found Mark Warda’s “Land Trusts in Florida” surprisingly helpful even though I’m not in Florida. Nolo’s “Make Your Own Living Trust” had some good investor-specific stuff too.

One thing that saved me a ton of headaches was creating a simple spreadsheet tracking all my properties, their deed types, recording info, and transfer status. Really helped keep everything organized during the transition.

I ended up taking a middle approach - I drafted everything myself using good templates, then paid an attorney a flat fee just to review it rather than creating it from scratch. Gave me peace of mind without the huge bill.

Good luck with your trust! It’s definitely doable as a DIY project for someone motivated like yourself.

1 Like
3

Amy, I am blown away by what a detailed, helpful answer you have sent me! I have just ordered Nolo’s Make Your Own Living Trust. I am sure I will have a few follow-up questions. Again, thanks so much!

4

As I have commented on this forum before, I am in the process of creating a trust for inheritance purposes, and there have been many things I have been having to learn. I have a specific question now. The instructions we read online say to just use a quit claim deed to transfer our home to the trust, because what is involved is simple and non-controversial. However, this means that the house will be transferred to them via a quit claim deed, which we know offers no guarantees. Theoretically this should make it harder for my heirs to sell the house. The warranty deed it has now, as we know is the gold standard. Can someone explain this to me? It is my assumption that a new deed supersedes the old. It follows from this that i am substituting a title that provides no guarantees for one that guaranteed everything. There must be something I am missing, because this would make no sense.

5

Setting up a trust yourself is definitely possible, but since you’re regularly buying and selling properties, you’ll need some flexibility. DIY can work, but it’s smart to at least have an attorney review it afterward to ensure you’ve covered your bases.

When transferring your properties, it’s best to keep the original deed types exactly the same—special warranty deeds stay special warranty, repository deeds stay repository. This avoids any confusion or loss of protections from the original deeds.

Also, you won’t need to amend the trust itself every time you buy or sell. Just use new deeds to transfer properties in and out of the trust, and maintain a separate list of what’s currently in the trust. This way, you’re not constantly rewriting the trust document.

You also might want to set up a dedicated bank account for the trust to keep everything clear and organized. Remember that your trust document itself isn’t publicly recorded—only the property deeds you transfer into it are.

6

Sean, thank you for clearing up that important point.

In trying to carry out this project, I have encountered a problem I was not expecting. I bought my home in 1998 under my (then) married name, Sylvia Asturias. About twelve years ago I changed everything back to my maiden name, Sylvia Castellanos with the exception of the deed to my house. I assumed this would be an easy fix that would just involve a trip to the office of the Recorder of Deeds with my documents making the change in the name. Well, I just called the office of the Recorder of Deeds and they said not at all. They said I had to hire a lawyer to create a new deed and convey it to them. Are they for real? It is such a trivial change. Is there a way I can change it myself without paying a lawyer?

The reason this arose is that I want to transfer my home to the living trust I am creating. My basic question is: Can I transfer a property in the name of Sylvia Asturias (perhaps Sylvia Castellanos Asturias, I need to see how the deed is worded) to the Sylvia Castellanos Living Trust? Or does my home need to be changed to Sylvia Castellanos before I can transfer it?