Definition
A land trust is a trust structure where a neutral third party (trustee) holds legal title while the beneficial owner retains control and use rights. Land trusts provide privacy and management simplicity.
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Land trusts are particularly useful for privacy-conscious buyers who want to keep their property ownership confidential. The trustee holds public title while a beneficiary deed identifies the actual owner privately. Land trusts simplify succession and can reduce probate complications. However, lenders typically require disclosure of the beneficial owner, and land trusts have specific legal requirements that vary by jurisdiction.
Pro Tip
Use land trusts carefully, as they may trigger due-on-sale clauses if not properly disclosed.
Example
A buyer uses a land trust with a title company as trustee to hold title while remaining the beneficial owner, maintaining purchase privacy.