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Is There Such a Thing as a "Land Trust" in Alaska, Arizona, California, Colorado, Oregon or Tennessee?

Posted by Nina Whitehurst | Sep 04, 2019 | 0 Comments

Every six months or so I get a call from someone, usually hailing from Illinois or Florida, wanted to form a "land trust" for the property they have acquired or are about to acquire in Tennessee.  They get very frustrated when I tell them there is no such thing.  They are familiar with "land trusts", know all about them, and are utterly convinced that I must not be a very good lawyer if I don't know about them.  I do know about them; they just aren't a thing in Tennessee (or most other states for that matter).  I try to explain that if they tell me what they are actually trying to achieve, we can probably get to the same place using different tools.

So, what are "land trusts"?  Well, first of all, they are creatures of statute, and there are only six states that have enabling legislation:  Illinois, Florida, Hawaii, Indiana, North Dakota and Virginia.  As you can see, Tennessee is not one of them.  Neither are Alaska, Arizona, California, Colorado, Oregon (the other states in which I am licensed) and a slew of other states.

Why are people from the "land trust" states so fond of them?  Mainly for privacy.  You see, the land trust statutes allow people to keep their land holdings private by titling them in the name of a trust that does not include their name, backed up by a state law that allows the trust to hide the identity of the true owner.  For this to work, the true beneficial owner needs to appoint someone other than himself as the trustee, because disclosure of the identity of the trustee is required and necessary for commerce.  Usually the name of the trust is the property address or something completely whimsical.

But do not despair, except for Arizona (more about Arizona later), the same results can be achieved by using a plain vanilla common law grantor or nongrantor trust just about anywhere.  It's just not called a "land trust" and it doesn't have a statute to back it up, but it can achieve the same results.

Arizona is a bit of an outlier.  In Arizona there is a statute that requires that the beneficial owners of a trust be disclosed on the deed.  The solution there is to create an trust in which the settlor gives up all legal authority to access the property but retains other powers (such as the right to change the beneficiaries to anyone but himself) that essentially gives him control.  And the same can be done in any other state, statute or no statute.

It's just a terminology thing.  We don't call them "land trusts" in the non-land trust states, but we do understand client goals and we know how to achieve them.

About the Author

Nina Whitehurst

Attorney at Law Nina has been practicing law for over 30 years in the areas of estate planning, real estate and business law She is currently licensed in Alaska, Arizona, California, Colorado, Oregon and Tennessee. Her Martindale-Hubbell attorney rating is the highest achievable: 5 stars in peer...

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