About Land Trusts

A land trust is a legal agreement held by one person or company for another person. The trust is a piece of real estate or property. Land trusts were created to protect the actual land owner by having the property documents in trust of someone else. Many non-profit organizations hold land in trust for conservation purposes. These organizations simply keep the land so that it can remain as is for plants and animals. Today the government holds millions of acres of land for Native Americans. The government manages the land and the Native Americans are exempt from taxes.

Benefits

The sale price of the property may be kept private and off the public records. Companies that hold land trusts can keep the property as an investment for people who live in other countries that would like access the land in the future. Land owners who keep their land in trust of someone else are able to avoid probate. If the land owner dies the land will go right to relatives, avoiding a lengthy paperwork process. There is no need for an attorney to get involved because banks or trust companies are required to ensure that their forms are legal in order to stay in operation. Some people have used land trusts to hide assets and avoid creditors, but this doesn't work in every state.

Significance

Land can be protected and preserved through land trusts. Land trusts can stop developers from building. This is important to protect wetlands, deserts, greenways and farmland. The government promotes the use of land trusts to protect these open spaces.

Size

The government, organizations and private investors own land trusts all over the United States. A large amount of land is held in trust. Nearly 500,000 acres is being protected by conservation and government agencies. Millions of other acres are being held in trust by the government.

Considerations

There are many things to consider if you plan to buy a land trust as an investment such as how much control you have over the trust. There are small administration fees involved in holding land trusts. Some states don't consider land trusts to be valid so double check the rules in your state before you buy. Also, some attorneys won't even deal with land trusts, which can be a major drawback if you have any issues.

History

Land trusts first were established in ancient Roman times. In England during King Henry VIII's rule, land was held in trust to keep ownership of the land a secret and to avoid serving in the king's army. Land trusts were used to build up Chicago in the 19th century. Some of the land was held in trust because land owners were not able to build where they owned land close by. Because the land was kept in trust of someone else, investors were able to side step this rule. Since then land trusts have been used more commonly throughout the United States.

Resources

• Conservation and land trusts