Does anyone here have any experience buying a house on a property trust? The wife has a job where we'd prefer some folks not be able to look up her home address, and just in general, I like the idea of a bit more privacy. The only goal is to get our names off of the databases publically available online.

We own our current home outright, but are looking to move to a better school district. What is the process for a trust? Im not sure if we will buy outright or need a loan, will banks lend to us if we're putting into a trust? Other than the lawyers fees, are there any other costs or issues that could arise?

Obviously we would need a local lawyer, but I'm just trying to decide if it is feasible or not.

I managed a couple of dozen of those when I was a title co. lawyer. There are trusts, a bit more elaborate, and there are simple holding agreements where title is put in the name of the title co, the owners do everything else.

Mostly, this is done by prominent people who try to have some modicum of privacy. Richard Nixon's property in San Clemente was done this way. Celebrities, some high elected officials, and wealthy businessmen trying to keep real estate ownership from wives or about to be ex-wives.

There was a story in the San Diego paper one day about raids on several dozen houses operating as "massage parlors." About a dozen of them were in the name of a title company competitor. None of ours, thanks to heaven. The story made it sound like that competitor had some subsidiaries in another line of work, heh, heh, heh.

Be sure you pick who to deal with wisely. With title in that name, that person or entity can cause you all sorts of problems, if they file bankruptcy, get liens against them, or chose to violate your trust.

With lending as it now is, I would be surprised if you could make it work. It should not be expensive to set up.

I set-up a living trust when I lived in Whackyland (aka California). Since then, my employer has moved me 4 times and I've bought 4 homes via the living trust. It was easy 3 out of 4 times.

Do yourself a favor and don't get a mortgage with Chase. The rectal warts don't read your 2 page certificate of trust, lie to you all through escrow on everything being set-up for purchasing via trust, and surprise you on closing day with having to sign every damn document 3 ways (grantor, trustee, and individual).

One thing with all estate documents is you do have to periodically update them for changes in laws and your life situation. JHE provided a reference to a very experienced estate attorney who brought it up to modern, Texas standards.

Financing can be difficult for a direct conveyance to a trust from the seller. Most here deed it to the trust after buying in their own name. Some states actually index land records in the name of the trustee as well as the trust. If it is a cash purchase, it should be a lot simpler.

Not sure about trusts. But I deal with very exclusive customers and many of them will set up the houses in LLC's. I think the LLC's may be a little bit easier to deal with if you're buying/selling properties every couple of years.

Thanks for all the replies, guys.

Tatortodd,
Since you've financed houses with a trust, other than a touch more paperwork, is there any type of rate premium, or additional closing costs from the bank? Do most banks deal with Trusts, or would I be limiting the number I can shop around with?

Oz,
Thanks for the tip. I'll try and check around to see if TN law will list our names as trustees. When you say "most deed it to the trust after buying it in their own name", that means that our real names would show up in the historical record of previous owners, but would probably fool a simple search. Am I understanding you correct?

quote:

Originally posted by tatortodd:
I set-up a living trust when I lived in Whackyland (aka California). Since then, my employer has moved me 4 times and I've bought 4 homes via the living trust. It was easy 3 out of 4 times.

Do yourself a favor and don't get a mortgage with Chase. The rectal warts don't read your 2 page certificate of trust, lie to you all through escrow on everything being set-up for purchasing via trust, and surprise you on closing day with having to sign every damn document 3 ways (grantor, trustee, and individual).

One thing with all estate documents is you do have to periodically update them for changes in laws and your life situation. JHE provided a reference to a very experienced estate attorney who brought it up to modern, Texas standards.

This isn't exactly a living trust, but the lenders will have the same or maybe even more issues. For one thing, you want a trustee taking title unrelated to the true owner. For these factors and those I mentioned above, title companies were the most popular choice in my day.

Some people try business entities, like LLCs, but these can have awkward ramifications for a personal residence, depending on the state.

Yes, all records owners would show up in the chain of title if someone actually did a thorough search. In TN, some newspapers also print all real estate transfers - more of a small town thing.

quote:

Not sure about trusts. But I deal with very exclusive customers and many of them will set up the houses in LLC's.

This is an option as well if you're just trying to make it difficult to track you. You can set up the LLC with your attorney as the registered agent. Public records searches won't turn up anything.

What's even more important is that you don't use that address for anything else. I have found far more people by where their cell phone bills were mailed that I ever did searching property records.

quote:

Originally posted by Shackelford:
Tatortodd,
Since you've financed houses with a trust, other than a touch more paperwork, is there any type of rate premium, or additional closing costs from the bank? Do most banks deal with Trusts, or would I be limiting the number I can shop around with?

IME, no rate premium or closing costs. I'm doing this on corporate relos and always go through the relocation company's preferred lenders since it's simpler for me.

quote:

Originally posted by a1abdj:

quote:

Not sure about trusts. But I deal with very exclusive customers and many of them will set up the houses in LLC's.

This is an option as well if you're just trying to make it difficult to track you. You can set up the LLC with your attorney as the registered agent. Public records searches won't turn up anything.

What's even more important is that you don't use that address for anything else. I have found far more people by where their cell phone bills were mailed that I ever did searching property records.

They tend to like to use their CPA a lot as the registered agent too sometimes. Also easy to put each separate house into it's own LLC, so if something happens at one (like someone falls and sues), that 1 house is their entire limit of liability.

I don't mean to drift the thread, but maybe jhe will come along, see this and answer my question about homestead in Texas.

Texas homestead is among the most protective of any state. Does title to the homestead have to be held by a natural person, or is it available to those who occupy the claimed property but own it in an entity, corp, llc, trust, etc?

quote:

Originally posted by JALLEN:
I don't mean to drift the thread, but maybe jhe will come along, see this and answer my question about homestead in Texas.

Texas homestead is among the most protective of any state. Does title to the homestead have to be held by a natural person, or is it available to those who occupy the claimed property but own it in an entity, corp, llc, trust, etc?

My trust owns my Texas property, and I qualified for homestead exemption. Specific wording had to be in the trust, and the attorney who updated my trust took care of that so I qualified for homestead exemption.

Jallan,
Thanks for your comment, I wasn't really aware of simple holding agreements. You mention that they are "a little bit simpler" than a trust, but it sure seems, like you warn, that you are opening yourself up to a lot of risk if your title co (or whoever) gets in trouble and decides to screw you.

I am really only aware of trusts from the NFA world, and I certainly wouldn't need anything complicated, although many of course are. But, trusts seem like they can be pretty simple if I want it to be. I figured in this day and age, it should be pretty simple for a lawyer to copy-paste me something. I guess I'm failing to see the advantage of holding agreements, if I can get a basic trust done for a grand or so by a lawyer.

quote:

Originally posted by a1abdj:
What's even more important is that you don't use that address for anything else. I have found far more people by where their cell phone bills were mailed that I ever did searching property records.

Can you please elaborate a bit more on these types of searches? Do you mean just looking in the old school phone book? By and large, cell phones are unlisted, and therefore not traceable by this method, right? Are utility bills traceable without access to private or commercial databases? I had considered the whole "mail my bills to the UPS store", but had always figured that was kinda paranoid.

Not a lawyer but staying in a Holiday Inn tonight (literally)
We set up a trust for estate planning purposes and when we did we transferred all property including our house into the trust. You can name the trust whatever you want so it seems to me that it would meet your needs. So now when you go to look up property records it shows the trust name only.
My understanding on trusts are that the need for estate planning is fairly State specific. But once set up in your current state you can then move and maintain the trust. We live in NV. But we could retire to say AZ, keep the NV house and not need to change anything with regards to the NV house.

quote:

Originally posted by Shackelford:
Jallan,
Thanks for your comment, I wasn't really aware of simple holding agreements. You mention that they are "a little bit simpler" than a trust, but it sure seems, like you warn, that you are opening yourself up to a lot of risk if your title co (or whoever) gets in trouble and decides to screw you.

I am really only aware of trusts from the NFA world, and I certainly wouldn't need anything complicated, although many of course are. But, trusts seem like they can be pretty simple if I want it to be. I figured in this day and age, it should be pretty simple for a lawyer to copy-paste me something. I guess I'm failing to see the advantage of holding agreements, if I can get a basic trust done for a grand or so by a lawyer.

When I was supervising these, decades ago, I was counsel at a very large national title insurer. There were perhaps two other very large insurers doing similar services. I would not have worried about it then, and did not, but a decade or so ago, one of the big title insurers mishandled the 1031 exchange funds it was holding and ended up in bankruptcy. While that ought not imperil a customer's property held under a holding agreement or property trust, it might take some effort to straighten out and at a minimum result in some undesirable and unpleasant anxieties.

I would be much less confident about naming your lawyer, accountant, or any natural person as well as any local title co which are usually small, mere agents of the title insurers. Finally, I am not sure if any offer this sort of thing these days. It wasn't lucrative, more of an accommodation to wealthy big shots whose favor we sought to curry back then.

Whether a trust or holding agreement, the idea is to take and hold title in a name that will not tie to the true owner(s) on a tax search or title search.

I would be careful to make sure the arrangement permits homestead treatment. Not only does it reduce property tax in some states, but it can save your property from forced sale if you have a judgment entered against you.

If you go the LLC route, and the homestead exemption doesn't protect you, the creditor can execute on your LLC interest and end up owning the LLC which owns the property. Interest isn't deductible either.

quote:

Can you please elaborate a bit more on these types of searches?

Without even touching on the "trade secrets" professionals use, just about every company out there sells its database to others. In today's world, this puts your information everywhere.

As an example, if you Google my company, you'll find an address of one of my unmanned warehouses listed as our main business address. I do not own the building, I do not have utilities in my name at that building, and we have never maintained any sort of presence at the building. It's solely storage.

The only connection between that address and the outside world is that we have had freight delivered there. One (or more) of those companies sold their information which included that address. One sold it to another, which sold it to another, and now it's all over the internet.

While not necessarily as obvious on a personal basis the exact same thing happens. There are websites that will gather this information, and for a small fee will provide it to anybody who asks. No need to be paranoid, but if your intent is to have an unknown address you must not use it. The second you do, the world will know.

Just be sure there are no bills, utilities, or anything else in your name and associated with that address. All it takes is one such thing, just once, even only briefly, to screw up the idea of privacy vis a vis a trust.

Get somebody else to live there, too. That'll really throw off the lookie loo's.

In San Diego, every kid going to school had to bring in utility bills in the parents name, to prove where they lived. There may be a number of hurdles like this to deal with.