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About Exeter 1031 Exchange
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We Have Answers. Go Ahead, Ask. Title Holding Trust Frequently Asked Questions (FAQs) The following Title Holding Trust frequently asked questions (FAQs) have been compiled by our team of trust officers to provide our clients and their advisors with answers to the most commonly raised questions regarding Title Holding Trusts. What is a Title Holding Trust or Land Trust? Who can set-up a Title Holding Trust? Why would I use a Title Holding Trust? Can I avoid a due on sale clause with a Title Holding Trust? Can I 1031 exchange property held in a Title Holding Trust? Didn't Find Your Question? Do you have a Title Holding Trust question and can't seem to locate an answer? Ask the team of Title Holding Trust specialists at Exeter Fiduciary Services, LLC and we WILL get you an answer. Email your questions or comments to Exeter Fiduciary Services, LLC at ASK Exeter, or post your question on our Exeter Discussion Board, or contact one of our national branch office locations for assistance. Call Exeter 24/7 Our Senior Title Holding Trust Officers are also available 24 hours a day, 7 days a week, 365 days a year to answer your Title Holding Trust questions. Simply click here to schedule an immediate call back from one of our Senior Title Holding Trust Officers. Here Are Your Title Holding Trust Answers! What is a Title Holding Trust? The Title Holding Trust is a fully revocable grantor trust and is an extremely simple and inexpensive method for acquiring and holding legal title to real estate or personal property. Title Holding Trusts function very much like a family living trust in many ways, but have some very important and distinct differences. The most common use or benefit of the Title Holding Trust is the ability to acquire and hold real property or personal property in a confidential and private manner. There are of course many other uses and benefits as well, such as protection from liens and judgments. Who can set-up a Title Holding Trust? The Title Holding Trust can be set-up by any individual, group of individuals (co-owners), a general partnership, a limited partnership, another trust, another trustee or trust services provider such as an out-of-state trust company, a limited liability company, a corporation, or any other type of business entity. Why would I use a Title Holding Trust? There are many uses and advantages of using a Title Holding Trust. The most frequent use is for confidentiality and privacy of ownership. There are many other advantages as well, including advantages while negotiating the sale or purchase of property, protection from liens and judgments, preventing clouds on title, avoiding probate and ancillary probate, and preventing partition actions. Can I avoid a due on sale clause with a Title Holding Trust? Generally, no. It will depend on the specific language contained in the due on sale clause of your promissory note. However, assigning 100% of the beneficial interest of a Title Holding Trust is considered a conveyance of title of the property held in the trust and will most likely trigger any due on sale clause contained in your loan documents. Can I 1031 exchange property held in a Title Holding Trust? Yes, you can 1031 exchange property held in a Title Holding Trust. Title Holding Trusts are fully revocable grantor trusts that can be terminated, amended or updated by the beneficiary at any time. The Title Holding Trust is also classified as a pass-thru entity and a disregarded entity for income tax purposes. A full or partial assignment of a beneficial interest in the Title Holding Trust is treated as a conveyance of the underlying property held in the Title Holding Trust for income tax purposes. The IRS issued Revenue Ruling 1992-105 that permits the 1031 exchange of beneficial interests in Illinois Land Trusts. Can I 1031 exchange out of property held in one Title Holding Trust and buy property held in a different Title Holding Trust? Yes, as long as the underlying beneficiaries of both Title Holding Trusts are exactly the same the transaction will qualify for tax-deferred exchange treatment under Section 1031 of the Internal Revenue Code. And, both properties do not need to be held in a Title Holding Trust. You could sell relinquished property that was held in a Title Holding Trust and acquire replacement property that was held in your individual name as long as the individual was also the beneficiary under the Title Holding Trust. |
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