Community Land Trusts Part III: Stories and Resources

Community Land Trusts:
Stories and Resources

Last week, we discussed how to form a Community Land Trust, a specific type of Land Trust.  Today, we'll see how Community Land Trusts are being implemented in various parts of the country.  We'll also discuss some resources for support and information once the trust has been formed.

Land Trusts in Action

Maryland

There are several Community Land Trusts in Baltimore, MD.  The Charm City Land Trust, Inc. formed around the turn of the Century, has been buying up vacant lots for years. The Northeast Land Initiative and New Park Heights Community Development Corp. have similar goals.  The three are non-profit groups that develop and oversee affordable housing, as well as community assets such as playgrounds and gardens.  All three groups sell property with ground leases.  There are income eligibility requirements for purchase, and specific guidelines and caps for resale of any property held in the trust.  Baltimore is using the Land Trusts to try to reduce the stock of vacant, crumbling buildings, to fight the housing shortage for middle-income workers, and to promote true, mixed-income type of neighborhoods.  

Nearby Frederick County is the home of Maryland's first successful community Land Trust. Baltimore is looking to their successes and issues in implementing their models. To qualify, Frederick residents have to earn less than 80% of the county's median income, which is currently about $107,000 per year.  In Frederick, any resale profit is split between the buyer and the trust, with the trust receiving 60%. The Frederick Trust is a subsidiary of Habitat for Humanity.

(Source: Community Land Trusts Make their Pitch: www.baltimoresun.com/business/real-estate/wonk/bs-bz-community-land-trust-20151130-story.html)

Oregon State

Oregon's largest trust, the Southern Oregon Land Conservancy, was formed in 1978. By the turn of the century, there were over 20 active Land Trusts in Oregon.  

The Three Rivers Land Conservancy is one of these trusts.  Its purpose is to try to conserve open land and access to natural resources in a rapidly growing, urban area.  They focus on the Southern part of the Portland Metropolitan Area, one of the few parts of the district that still has open space to preserve.  Created in 1991, they are building a system of green-spaces and trails to give residents access to natural settings within the urban environment.  Rather than focusing on large parcels, this trust has dozens of smaller properties. totaling over 160 acres.  Most of their land remains undeveloped.  They also make use of conservation easements to expand the areas they protect.

(source: The Oregon Story: http://www.opb.org/programs/oregonstory/land_trusts/index.html)

Pennsylvania

Pennsylvania has The Pensylvania Land Trust Association, also known as PALTA.  According to their website: "The Pennsylvania Land Trust Association was created by land trust volunteers and staff who recognized the need for an association that can focus on the broad needs of the conservation movement—to take on activities that no one organization could effectively handle or wish to handle on its own."  PALTA started as an informal network in 1991.  They incorporated as a non-profit in 1995, and today, they have more than 100,000 Pennsylvanians as members and contributors.

PALTA not only works to preserve land; they also work to foster conservation policy throughout the state.  PALTA also sponsors educational programs and offers support through webinars.

(Source: Pennsylvania Land Trust Association: http://conserveland.org/)

Florida

Florida has over 10 Community Land Trusts, including ones in both Palm Beach County and Broward County.  Palm Beach County is both one of Florida's richest counties and one of the poorest. Broward County, home to the Miami Metropolitan Area, has a similar socio-economic spread. 

The Community Land Trust of Palm Beach County focuses on affordable housing.  Those who qualify sign 99 year land leases, and the trust retains title to the underlying property.  The trust focuses on helping people build equity, qualify for mortgages, and learn about all the benefits of homeownership, while capping the equity participants build.  Participants are looking to build equity and stability, rather than seeing a return on an investment.

TheSouth Florida Community Land Trust in  Broward County operates similarly.  Putting participants in a trust-owned home with a mortgage generally saves them about $500 to $800 a month in rent. Initial purchase prices are about a third of the price of buying a similar home NOT owned by the trust.  

Both programs allow people to buy homes at below-market values. To qualify, residents must not make more than 120 percent of the area median income. They must also have steady employment and good credit.  These trusts tend to focus on workforce housing.  They want to help people stay in Florida, rather than flee the state for a place with a lower cost of living.  

(Source: The Sun Sentinel :http://www.sun-sentinel.com/business/realestate/fl-land-trust-affordable-housing-20150710-story.html)

Connecticut

Connecticut has the third most Land Trusts of any state in the country, significant especially because Connecticut is one of the country's smallest states.  There are over 130 conservation trusts alone.  Many of these smaller trusts are affiliated with the Connecticut Land Conservation Council (CLCC). Created in 2006, CLCC represents the merger of two previous organizations, one which focused on advocacy and the other that provided technical support to conservation trusts.    According to their website, "CLCC's mission is to advocate for land preservation, stewardship and funding, and ensure the long-term strength and viability of the land conservation community. The intent of CLCC is to enable our conservation community to better learn from each other and to even more effectively advocate for critical issues at the State Capitol."  CLCC holds an annual conference.  They also provide grants and assist Connecticut-based trusts to obtain funding.

A list of Connecticut Land Trusts can be found here:  http://www.ctconservation.org/findalandtrust

(source: CLCC: http://www.ctconservation.org/)

Connecticut also has several Community Land Trusts that focus on housing.  In fact, the State itself sponsors a Land Trust/Land Bank through the Department of Housing.  P.A. 87-441 "provides eligible applicants with grants, loans and deferred loans for the costs of acquiring land or interest in land and the costs of holding and managing land to be developed as housing for low and moderate-income families."  DOH has an open application process, meaning applications are accepted any time.  Funding is available to organizations to acquire  "real property for the purpose of providing for existing and future housing needs of very low, low and moderate income families."

(Source: Connecticut State Government: http://www.ct.gov/doh/cwp/view.asp?a=4513&q=530484)

Litchfield has provided affordable housing through a trust for over 25 years.  Since 1989, this trust has developed over 48 homes.  According to their website "The Litchfield Housing Trust was created to strengthen our community by advocating, facilitating, and developing housing so that Litchfield could once again become affordable families of all income levels."  They offer rentals as well.  To qualify,  the applicant must have a gross family income below 80 percent of area Median Family Income.  If they are interested in ownership, they must be able to qualify for a mortgage.  This trust builds up its inventory both through purchases and donations.

(Source: Litchfield Housing Trust :http://litchfieldhousingtrust.org/)

In 2005, inspired by Litchfield, a group of citizens in Sharon decided to organize their own housing trust.  They formed a group, looked aat similar programs in Salisbury and Cornwall, then modeled themselves after the Litchfield Trust.  The mission of the Sharon Housing Trust, Inc. is "to provide permanently affordable home ownership to low and moderate-income households members of the Sharon community."  

Thus far, the trust has only developed one property.  In 2005, they received a donated parcel, and were able to sell it by 2007.  They have identified a site for their second home, and are now screening potential buyers.  The Sharon Housing Trust will require sweat equity from participants.  

The Sharon trust cobbled together its initial funding through donations, matching donations, and State grants.  They received  a $100,000 grant through the DOH program described earlier.

(Source: Sharon Housing Trust: http://www.sharonhousingtrust.org/)

Land Trust Resources

There are a number of non-profit organizations with the sole purpose of providing support to Community Land Trusts.  Three of the most well known are the Land Trust Alliance, National Community Land Trust Network, and Community Wealth.

Community Wealth: www.community-wealth.org

According to their website, "Community-wealth.org houses an extensive collection of resources focused on Community Land Trusts and their role in community wealth building. "  Here you can find a wealth of resources.  They have a policy section, a best practices section, a toolbox, and a wealth of articles and stories about how trust princiiples are being implemented.  They also have a lot of facts, figures, and statistics that may be helpful in developing your own trust's pitch.  They also have a large section on funding resources.

The National Community Land Trust Network: www.cltnetwork.org

CLT Network is another resource powerhouse.  Their primary goal is to develop resources for folks developing or wanting to start a community trust.  They also have a wealth of information on their website.  They offer training, advocacy, networking, and funding information.  They also sponsor an active forum so that members can learn from each other and "do not have to reinvent the wheel."  They offer newsletters to keep folks up to date with all the developments happening across the nation.  They also offer technical assistance and help people develop all the things that go along with building a Community Trust.

The Land Trust Alliance: http://www.landtrustalliance.org/

The Land Trust Alliance offers resources for conservation trusts.  According to their website:

The Alliance brings its more than 1,100 member land trusts together — and increases each one’s success.  We advocate for the policies and incentives that it takes to save millions of acres every year. We’re the go-to source for training for people who work in conservation — so land trusts get more done. We back up land trusts when the places they promise to protect are threatened. And we support land trusts in connecting more people to the land.

They also offer an extensive "learning center," filled with everything you'd ever want to know about setting up or maintaining a conservation trust.    They also sponsor trainings and publish a newsletter.

Summary

This week we continued exploring Community Land Trusts.  We looked at how these types of trusts are being implemented in several states, including Connecticut, Oregon, Pennsylvania, and Connecticut.  We also learned about some National Non-profits who aim to support all types of community and conservation Land Trusts.  

The next couple of posts will wrap up everything you need to know about Land Trusts.  Then we'll take a couple of weeks off to compile our course into an e-book, for even easier reading. Watch this blog space for information about the book.

Being Connecticut residents ourselves, here at The Law Offices of Heath D Harte, we are very proud of Connecticut's trusts.  We have all types here: investment Land Trusts, Conservation Land Trusts, Housing Trusts, Regional Trusts, and local Trusts.  Our own State Government believes in using Land Trusts as a solution, as is evidenced by their open application process for state funds.  Like Palm Beach County, we have a wide range of socio-economic status in Connecticut, and we'd like to keep our own talent in-state.   We have seen the utility of ALL types of trusts, and we believe investors can benefit from participation in all of these types.  It is why we've spent so much of our energy developing our Real Estate Law practice.  We also believe successful investors can reduce their tax obligations through donating to non-investment trusts, while also significantly improving their own communities.  And as always, we look forward to assisting you with all your Real Estate Law needs, including setting up Land Trusts.

Part II: The Community Land Trust

Part II: The Community Land Trust
Setting Up a Community Land Trust

Last week, we started learning about Community and Conservation Land Trusts, and how these types of trusts are preserving communities.  This week, we'll talk about how one goes about starting a Community Land Trust.  Future posts will talk about how these types of trusts are being used across the country.

How To Set Up a Community Land Trust

Step One: Determine Your Goals

So you want to start a Community trust.  Why?  What types of goals do you hope to accomplish?  Are you looking to preserve affordable housing?  Preserve open space for recreation?  Do you wish to provide amenities not easily found in the area?  Who are you hoping to serve? Low income individuals?  Middle class? Service workers? First-time homeowners?  Nature lovers?  Boaters?

As with anything, your first step involves delineating your plans.  This will help guide you through the rest of the list of things you need to do.  Remember, these types of trusts always have one thing in common: they serve some sort of public benefit. Beyond that, your trust may have a very narrow focus, or it may have broader goals.

Many community trusts focus on housing.  However, others choose to focus on Day Care, recreation, or building parks and playgrounds.  Waterfront areas may develop trusts for community docks, swim areas, or fishing access.  Some trusts focus on preserving hiking or biking trails.  Historic districts may use trusts to preserve their "character."  Community trusts are not just limited to providing affordable housing.

People less experienced with building trusts may want to begin with a  more narrow focus.  Starting smaller may help lead to greater initial success.  

Step Two: Recruit an Organizing Committee

Most Community Land Trusts are non-profit organizations.  Many communities already have established groups that might be interested in sponsoring the trust. Once you have the goals outlined, the next step is to either find an established group to work with or to form your own, brand-new group.  Whichever option you choose, you'll want a committee to help.

When forming this organizing committee, keep your overall goals in mind, and try to invite people with skills and resources in those areas to join your group.  If you decide to form a new, non-profit, try to invite someone with expertise in this area to join your group.  If you are partnering with an existing group, your steering committee will consist of your people, plus a few from that established group.

In addition to forming the 501(c)3, your steering committee will need to raise the initial funds to get your trust off the ground.  This means you'll need at least one person with fundraising experience.  Funds may come from a variety of sources, including government grants, foundation grants, fundraisers, and good old donations. It is always helpful to have a philanthropist on your initial Board.  Real Estate personnel, builders, developers, and other people familiar with local regulations are also helpful.  If you cannot recruit such individuals for your steering committee, do not give up. Many National Non-profits began as small, grassroots clubs.  As you grow your trust, you can continue to try to recruit people to join your Board.

Step Three: Refine Your Goals and Beneficiaries

Now you have a committee together, it's time to refine your goals further.  Who exactly will the Trust serve?  And in what geographical area(s) will you provide services?  Will there be  income requirements or residency requirements for beneficiaries?  Again, this relates back to the purpose of your trust.  

If you are focusing on housing, you will need to define your terms concretely.  If you are targeting "service workers," exactly who qualifies? Teachers? Fire Fighters? Police? Bus Drivers?  If you are targeting "the middle class," what exactly does that mean in your area?  If you are trying to preserve housing, must a potential beneficiary already live in a certain neighborhood, or will you accept people looking to move there?  If you are providing work force housing, must they be employed within a certain mile radius? And what happens if they lose that job?  Do they lose the housing too?  

If you are focusing on recreation, similar questions apply.  Are you providing trails for anyone, or for just the town residents?  Will someone need a membership card to use a trust-owned dock?  If so, who qualifies for membership?  Are there financial considerations, residential considerations, or both?  

If you decide to partner with an existing group, they may already have criteria for membership.  You may have to adapt your initial goals to be more in line with those of the organization.  Steering committee members may have ideas for funding sources, to which you'll need to bend your initial goals.  

Step 4: Organize and Formalize

You've made a plan, recruited an organizing committee, and refined that plan.  Now it's time to organize.  It's time to elect a Board of Directors, designate staff roles, and start filing the paperwork.

If you are working with an established group, you may not need a separate Board of Directors.  But you will still need to determine positions and roles.  If you will have any paid staff, you will need to write job descriptions and determine the chain of command.  Even with an all-volunteer group, you'll need to delineate roles and responsibilities, as well as who reports to whom.  You may need to break into committees and sub-committees and appoint committee chairs.

You'll also need to decide the structure for beneficiaries.  Will this be a "membership" group?  If so, what are the criteria for membership?  Are there dues to join?  Or will you require "sweat equity." Will they need to apply for membership? Is the membership limited in number, or is it unlimited? Will you have wait lists?

If you are establishing your own non-profit, you'll need to complete your 501(c)3 application.  It's best to do this BEFORE you start fundraising so that donations are tax deductible.  And of course, you'll need to name your trust, as well as figure out where your group will be physically located.  You may need to look for donated space, at first, until you've raised enough money to get your own.  This is also the time to recruit volunteers to help you develop your outreach materials.  Business located in your service area that may benefit from your activities are a good source for donations.  Businesses can donate either goods, like paper for flyers, or actual services, like a designer to help with flyers.

Step Five: Solicit Donations and Funding

Now you have the basics of your trust together, you need some actual land.  And to get land, you will need to raise funds.  Funding can come from a variety of sources. These include Federal and Local Government grants, tax credit programs, corporate donations, individual donations, matching grant programs, private land donations, Foundation grants, sales, galas, and special events.  

Many organizations like to plan a public initial fundraiser in the form of a local event. This can be something as lush as a black tie dinner or something as small as a car wash at the local High School. The purpose here is to market the new organization and to solicit volunteers as much as it is to raise funds.  A public fundraiser markets your group's goals and purposes, and helps the group find both donors and beneficiaries.  It can also help to expand the pool of volunteers.  

Again, soliciting entities in the community that may benefit from the trust's goals is key during this phase.  You must sell your organization at the same time you are raising funds to make it a reality. This is probably the most important phase of starting your trust, as well as the most frustrating.  But it is this phase that will ultimately mean success or failure.  

Step Six: Acquire Assets

Now you have yourself formally established, and you've raised some funds, it's time to start meeting your goals.  A Land Trust must consist of real property.  Now is the time to start acquiring that land.

Of course, the assets you acquire will depend on the goals of your trust.  If you are building playgrounds, you'll need to find some empty lots in a suitable area.  If you are focused on housing, now is the time to acquire land for housing units, and maybe even a few blighted buildings.  If you're developing community gardens, it's time to find spots to put them. Once you've acquired the property, it is time to develop or redevelop that property.

But the real property is not the only asset you need to acquire.  With a Community Land Trust, your beneficiaries are one of your greatest assets.  While you are obtaining land, you need to be recruiting members as well.  And depending on your model. these members may be key in helping you to redevelop that land so that it meets the goals of your trust.

And of course, all the information we reviewed about setting up a Land Trust applies here.  Once your organization acquires the Real Property, the parcels are all put into a Land Trust.  The basic steps for setting up a Land Trust all apply here.

Step Seven: Keep Repeating Steps Three, Five, and Six

A successful Community Land Trust needs to be self-sustaining.  Your group will need to keep fundraising to keep it alive.  And as the Community Land Trust matures, you'll need to keep reassessing your goals, service areas, and beneficiaries.  And hopefully, you will be successful enough to keep building your assets.  Whether that means you start with a quarter acre lot and 4 garden plots, and grow that to 6 acres and 2 dozen plots, or you start with 2 apartments and grow that into an entire building, a successful trust will expand to meet the community's needs.  You may start with a neighborhood and expand to serve an entire city.  

Likewise, you should always be looking to expand your stable of volunteers.  Your volunteer needs may change as you peak and plateau.  Your membership requirements will likewise change.  You may find your trust requires more "sweat equity" from beneficiaries than you initially thought.  

Your group may want to broaden their focus as your trust grows.  Committee and sub-committee needs will change.  Building your trust will be an ongoing cycle of building, recruiting, fundraising, and assessing.  That is just par for the course.

Summary

This week  we reviewed the steps needed to set up a Community Land Trust.  The steps for setting up a Conservation Land Trust are virtually the same, the only difference really is the trust's goals.  A Conservation Trust is really just a specific sort of Community Land Trust.  And a Community Land Trust is a specific type of Land Trust, with the beneficiaries serving some sort of public interest.

Our own offices are located in Stamford Connecticut and White Plains, New York.  Both are cities with a wide range of diversity.  We have the very rich, the very poor, and all income levels in between.    Both areas are Urban-Suburban areas, just a hop, skip, and a jump from more rural-suburban locales.  Our area is ripe for all sorts of Community and Conservation trusts, especially as public recreation areas are being lost to in-fill developments.

We truly believe that Community Land Trusts can improve the quality of life for people across the spectrum in our area.  In fact, it is becoming harder for the middle class here, as there is more housing available at either end of the spectrum than there is in the middle.  We are seeing more trusts being developed every year.  And each and every one is an asset to the area.On the lower end of the scale, people are organizing to try to stay in the area their family has lived for generations.  On the upper end, we see more people taking advantage of the tax benefits participating in community trusts can bring.

We hope you are enjoying this series, thus far.  As always, we welcome your feedback.  Questions can be submitted here or on our website at HarteLawOffice.com Or you may reach us through Facebook, Twitter, or Google+.

Whether you are an investor or a philanthropist, Land Trusts of all kinds can help you reach your goals, and we are here to help.  We can even help you locate properties for any type of Land Trust.  Please contact us today.  We'd love to help you with your Land Trust.

Setting up a Land Trust, Part 2

Setting Up a Land Trust, Part 2

Our last post detailed the steps you need to take to set up a Land Trust.  As promised, we are continuing this week with some specific examples.

Land Trust Agreement Samples

Now you know what a Land Trust is, as well as what goes into forming one, it's time to see some samples.  Land Trust Agreements are filled with legal boilerplate, as are most legal documents.  However, their contents boil down to what we've discussed already.  Again, we cannot stress the importance of consulting with an attorney when drawing up your own trust.  These samples are not meant to be "do it yourself forms" in any way, but rather, are provided as concrete examples of what goes into a Land Trust.  They are provided for informational purposes only.  They may also be helpful for organizing your information so you will be prepared when you meet with your own lawyer.

ATG Trust Sample Trust Agreement Sample

ATG Trust Trustee Deed Sample

Emarquette Bank Trust Outline Sample

Emarquette Bank Trust Agreement Sample

First Midwest Trust Agreement Sample

Investor Insights Trust Agreement Sample

Sample Trustee Deed

Chicago Land Trust Company Trust Agreement Sample

Again, these samples are being provided for reference purposes only.  They are NOT supposed to represent any type of "Do-it-Yourself" type kit.  We strongly suggest you consult with a skilled attorney when trying to create your own trust documents.  

We have provided a zipped folder with copies of these samples, if you prefer to download them to read.  This file is stored on our Google Drive.  

Summary:

This post was a continuation of last week's post.  Last week, we discussed all of the steps in developing your own Land Trust, including how and when to consult with your lawyer along the way.  This week, we examined some specific Land Trust Samples, to help make this topic a little more concrete for our readers.  These included sample Trust Agreements, as well as sample Deed Agreements.  Most of these samples were full of legal boilerplate type language.  Your attorney will probably have similar boilerplate forms to be used when developing your own trust.  However, these samples can be valuable in helping you organize your information so that you can be prepared during your own consultation with your attorney.  

Next week, we will continue our series on Land Trusts.  Future posts will delve into the pros and cons a little further, as well as discuss some "real life examples" in which Land Trusts are being used.

As always, The Law Offices of Heath D Harte is here to help you with all of your trust-related and real estate legal needs.  Feel free to contact us at any time to discuss your own trust needs.

Setting Up a Land Trust: Steps and Samples

Setting Up a Land Trust: Steps and Samples

Now that we understand the concept of Land Trusts, it's time to make things a little more concrete. Today we'll discuss the specific steps you need to take to develop your trust.  We'll also look at some sample templates that you can use to develop the trust.  As always, you really should consult with a qualified attorney when taking these steps.  

How To Set Up a Land Trust: Steps

Step 1: Draft A Trust Agreement

The second part of this post contains some sample trust agreements so you can see what a typical agreement looks like.  Although these samples are being provided to give you an idea of what a trust agreement contains, it is extremely important that you work with an attorney on this step.  Your attorney will know the specific verbiage needed in the state you want to establish the trust.  In fact, your attorney will help you to complete all of the steps described hereafter.  But it is important to know what the steps are so that you can bring the proper information and paperwork to your attorney. The next couple of steps talk about what you need to help your lawyer "fill in the blanks."

Step Two: Designate the Grantor and the Trustee

This is important: who is putting the land into the trust, and who will be the trustee? Now you may ask, aren't I the grantor?  Possibly.  However, investors often ask the seller to put a piece of real estate in trust when they contract to purchase.  When the property closes, the investor just amends the trust, naming himself/herself as beneficiary.  You personally may never take title to a property.  Rather, the property is moved into a trust pre-purchase, and the trust is amended upon closing.  In this case, the grantor is the current deed holder, rather than you.

The trustee is a very important decision.  Many entities can act as Trustee.  And the fees differ significantly according to who you appoint.  There are companies whose entire business revolves around being paid trustees for a Land Trust.  Banks, property managers, lawyers, and Investment Managers are other possible choices.    One of the biggest choices is will you use an institutional or a private trustee.  Institutional trustees usually have set fee structures, and these are usually higher than those charged by private trustees.  Costs are more negotiable with private trustees as well.

When meeting with your attorney to discuss developing the trust, you may want to inquire if s/he ever acts as a Trustee.  If the answer is yes, ask about his/her fee structures for doing so.  If the answer is no, ask who the attorney recommends you appoint as trustee.  If your attorney can neither suggest possible trustees nor personally acts as a Trustee, you may NOT have selected the appropriate attorney to develop your trust.  In this case, you may want to interview other attorneys before proceeding further.  (You can always contact us, The Law Offices of Heath D Harte.  We can help you with all your Land Trust needs.)

Remember, the trustee is the administrator or manager of your trust.  The trustee needs to be someone you can trust yourself, hence the name.  In addition, if you appoint a private Trustee, it should be a person with a different last name.  Your attorney will advise you whether the place you are setting up the trust requires that the Trustee be in the same State.  We cannot emphasize the importance of selecting the RIGHT Trustee enough.

Step Three: Name The Trust

Again, consult with an attorney while completing this step.  Ideally, you want to keep your name out of the trust.  However, in some jurisdictions, it is easier/preferable to use the beneficiaries' name(s) in the name of the trust.  If you are trying to keep ownership private, it is best to leave your name out of the trust's name.  A "classic" Illinois Land Trust generally uses a generic trust name.

Step Four: Determine Type: Revocable or Irrevocable

This is another crucial step, and will depend on your intents and purposes.  Most trusts are set up as irrevocable.  However, an irrevocable trust cannot be amended in any way.  You cannot change any of the terms until the trust expires or all its assets have been removed.

You may amend a revocable trust.  You may change beneficiaries, trustees, etc.  So if you think you're going to want to change anything at all, the trust must be set up to be revocable.  

We previously discussed the example of an investor asking a seller to put a property into trust before going to closing.  In this case, you would need a revocable trust.  However, in most cases, Land Trusts are set up as irrevocable.  Your attorney will advise you on what is appropriate for your specific situation.

Step 5: Name the Beneficiary

Again, this may not be as straightforward as it seems.  Depending on your intents and purposes, you may be the beneficiary, a corporation or LLC may be a beneficiary, or the beneficiary may be a number of people.   

The Chicago Land Trust Company has put together a sample list of "Beneficial Interest Designations" that show the types of beneficiaries a Land Trust may have.  It is embedded below:

As you can see, naming a beneficiary can be quite complex.  But a skilled attorney can help you match your named beneficiaries to your overall intents.

Step Six: Name the Director

Think of the Director as the CEO of the trust.  The Director is the person who dictates how the trusts' assets are handled.  Typically, the beneficiary is named as Director.  If the beneficiary is an LLC, typically the director of the LLC would act as the Director for the trust.  This is probably the most straightforward step in the process, and the one that requires the least amount of consideration.

Step Seven: Name Successor Beneficiaries

As we saw in step 5, naming beneficiaries can be quite complex.  Adding to the confusion is the question of successor beneficiaries.  Successor beneficiaries can be thought of contingencies, should a "main" beneficiary die.  For example, an aging parent might name a child as a beneficiary, to help that child avoid paying Estate Taxes and probate costs.  That child's child may be named as a successor beneficiary, should something happen to the original beneficiary before the trust expires.

With a revocable trust, successor beneficiaries may be changed at any time.  However with an irrevocable trust, successor beneficiaries must stay the same throughout the period the trust runs.  Thus, this is another area requiring careful thought and consideration.  And it is another area that warrants thorough discussion with your attorney, particularly if you are using a Land Trust to help structure your estate.

Step Eight: Name Successor Trustees

Just as with the beneficiaries, you want a "Plan B" in place, just in case something happens to the trustee.  A primary trustee might become ill, retire, or just up and quit.  You need a plan in place should that happen.  This is especially crucial if you choose a Private (rather than Institutional) trustee.

Again, with a revocable trust, things can be changed later.  It is much easier to replace a trustee after a trust has been formed.  But things are more set in stone with irrevocable trusts.  You cannot amend the trustee once the trust has been established.  Even with an institutional trustee, you need a sucessor named.  Companies go bankrupt or out of business; you do not want your trust to go up in smoke just because the trustee does.

An attorney can be especially helpful when it comes to finding and naming successor trustees.  This is absolutely a step in the process that cannot be overlooked.

Step Nine: Designate the State

Your particular needs will dictate in which state the trust is formed.  It is not necessary in all cases to establish the trust in the state the property is located.  In many cases, it is advantageous to set up your trust in a different state.  And of course, the state in which the trust is established will form the basis for the statutes upon which it is based.

If all the land in the trust is in one state, it may be best to establish the Land Trust in that state.  If there are properties from different states in the trust, the issue becomes more complex.  Many investors choose to set up trusts in Illinois with institutional trustees.  Investors also prefer to set up their trusts in states with clear statutes.  Some states require the trust be established in the state where the land is physically located.  This is another area in which your attorney is key.  A skilled Land Trust Attorney should make the recommendation to you, once you have presented him/her with the parcels to be included in the trust.

Step Ten: List the Trust Assets

Finally, it's time to list the real estate that will form the Land Trust.  Some people prefer to set up individual Land Trusts for each parcel of real property.  Others include multiple properties in their trust.  The decision to set up one vs. many Land Trusts will, of course, depend on your purposes.  If your primary purpose is tax management, you will want to confer with both an accountant and an attorney before finalizing any trust agreements.  If it is more for estate management reasons, consulting with an attorney will suffice.

Step Eleven: Finalize the Paperwork

The process is finally reaching its end.  Once you have drawn up the agreement, named the Trust, appointed a Trustee, named successors, designated beneficiaries, named successors, designated a Director, listed the supporting state statutes, and listed all the assets, you should have the Trust Agreement in hand, ready to be executed, as well as the Deed of Trust.  (The Trust Agreement should be dated BEFORE the Deed of Trust.)  Now it is time to get everything signed and notarized. (Of course, always read the documents through thoroughly BEFORE signing the final papers.)

Now that the paperwork is signed, it's time to record the documents.  ONLY the Deed of Trust gets recorded.  The Trust Agreement remains private, locked up in the file cabinets of you, your attorney, and the Trustee.

Step Twelve: Insure the Properties

This is the final step in the Land Trust process, and a step that many people overlook: insure the properties.  Placing a property in a trust does not negate insurance obligations.  You have done this much to protect yourself and your assets; don't forget this important final step.

Land Trust Agreement Samples

Next week, we will continue this post.  Check back to see several examples of Land Trust Deeds and Agreements.  Again, we cannot stress the importance of consulting with an attorney when drawing up your own trust.  And remember, here at the Law Offices of Heath D Harte we are Land Trust Experts.  Contact us if you want to discuss your Land Trust plans.

As always, please use the comments section below to ask any questions.  You may also contact us through Twitter or Facebook.

Introduction to Land Trusts

Introduction to Land Trusts

Trusts

Before getting into the specifics of Land Trusts, it is important to understand the concept of trusts. According to the dictionary, the legal definition of trust is “confidence placed in a person by making that person the nominal owner of property to be held or used for the benefit of one or more others.” (Dictionary,com) It lists “safekeeping, care, protection, and custody as synonyms.

Simply put, a trust is an arrangement that allows a third party, called a trustee, to hold assets on behalf of a beneficiary or beneficiaries. It is a legal document that spells out the rules for how you want assets handled. A trust separates the legal ownership of an asset from the enjoyment of that asset. The trustee has responsibility for managing and maintaining the goods, while the beneficiaries get to use those goods.

Trusts are separate legal entities, like a corporation or LLC is a separate legal entity. Trusts hold resources. They can help protect those resources from creditors. Trusts are also used to protect assets for heirs. Trusts dictate how and when assets pass to beneficiaries. They can help one avoid probate costs and avoid capital gains taxes. Trusts can also help one keep his chattel private. Trusts allow assets to pass outside of probate, thus keeping the assets out of the public record.

Trusts are revocable or irrevocable. An irrevocable trust cannot be altered by the grantor after execution. Conversely, a revocable trust is more flexible and may be dissolved at any time. However, revocable trusts are generally subject to estate taxes whereas irrevocable trusts usually are not. An irrevocable trust is generally protected from legal judgments against you as well. Thus, an irrevocable trust is generally preferred if your goal is to remove assets from your estate or to reduce estate taxes and probate costs for heirs.

Each state has different laws related to trusts. Thus, your first step in creating a trust is to consult with a knowledgeable attorney.

Land Trusts

A land trust is one specific type of trust agreement. Essentially, a Land Trust is an agreement in which a trustee holds title to real estate for the benefit of another party. And although a Land Trust is a legal agreement, it is not a “recorded document.” Instead, they are declared through a “deed to trustee.” Thus, the specific properties that form the trust are kept private. The deed conveying the property does not identify the parties involved, but rather just assigns the beneficial interest under the trust.

Land trusts have been around since the Roman Empire. During the Elizabethan era in England, Land Trusts were used to avoid Military service. During feudal times, land ownership came with many obligations, including fighting for the King. Nobles would form land trusts to hide their ownership, and thus, avoid its associated obligations. Today, land trusts provide similar shelter from owner identification. Likewise, the transfer of the property to the land trust does not require the payment of transfer or recording fees. You also retain tax benefits like seniors' exemptions or homestead exemptions even though the trust now owns the property. You retain all property owning rights, including the right to mortgage, rent, improve, or live on the land. However, activities associated with that land do not effect tor personal holdings any more. Financial transactions associated with the land will no longer effect your credit report. Liens and judgments against you will not attach to the property. Liens and judgments against the property will not attach to your personal credit.

Land Trusts can be especially beneficial when there are multiple owners of a single property. First, it makes it easier for one owner to sell their share of a property to another owner. Second, it protects co-owners from being impacted by another co-owner's financial distresses. It protects the other owners' interest should one investor need to file bankruptcy, as it takes the property out of that individual's asset pool. The trust dictates what happens to the shares should a shareholder pass away. And it makes completing all associated paperwork easier, as documents only require the signature of the trustor, rather than needing all involved parties to sign.

Land Trusts are of particular interest to investors, as it allows folks to discreetly buy land. This may be a large tract of land for redevelopment purposes, or it may be a number of small parcels. (Rumor has it that Walt Disney used land trusts to purchase the needed acreage for his Florida theme park. By using the trust, it obscured his identity so that folks would not know Disney was planning a huge park, thus driving up the land costs.) Setting up a trust can be particularly helpful when buying land in many states, or land in a state in which none of the beneficiaries reside. Again, a Land Trust absolves one of individual responsibilities and instead, puts all of the burdens on the trust itself. The trust handles the taxes, paperwork, association fees, etc.; the beneficiaries just sit back and reap the benefits of enjoying the land.

Most land trusts are formed for a specific period of time. At the end of the period, they either expire or are extended. The trust agreement itself should specify what happens if the trust agreement is allowed to expire.

Like with any other trust, the first step in developing a Land Trust is consulting with a skilled attorney. You, of course, should be armed with the basic information, including who will be the trustor, the trustees, and the beneficiaries. In addition, you should have a good idea of the property or type of properties you will be including in the trust, whether these are properties you currently own or are hoping to obtain. You should have an idea of whether they are for personal use, or if they will be used commercially or rented. Your attorney will then prepare the trust agreement, as well as handle the deed transfers and document recording. It is important to select an attorney skilled in preparing Land Trusts, as few are trained in this area. Depending on where you live, your attorney may suggest you establish your Land Trust in a different state. (This will all be explored in greater depth in a later article.)

In sum, a Land Trust is a simple legal agreement that moves ownership of real estate from an individual to a separate legal entity, while allowing you to retain all of the benefits associated with owning the land. Responsibilities move from the individual to the legal trust. You are no longer associated with that property in any legal way; instead, the trust entity assumes all the legal obligations of property ownership. You are no longer listed as owner in any property databases, and the property essentially separates itself from your estate. Still, you still enjoy all the benefits of owning that particular piece of real estate.


This article discussed the general concept of trusts and Land Trusts, and it introduced some of the reasons one might want to form a land trust. Subsequent chapters will discuss these reasons a little more in-depth. Later chapters will also delve a little more into the history of land trusts, including the Illinois Land Trust, state considerations, pros and cons, tax benefits, and frequently asked questions. Please follow this blog to be notified when additional chapters are posted. You may subscribe to the blog by using the form in the right sidebar, or follow us on Facebook, Twitter, or G+ to be notified when new chapters post. We look forward to exploring Land Trusts with you in the future.

Land Trusts

Land Trusts:

Prologue

Happy New Year to all of our readers.  To start the New Year, we'd like to introduce you to a guest blogger: Laurel Nevans.  She has been a Home Owner for decades, and now, she is considering becoming an investor.  However, she had never explored the idea of Land Trusts until recently. Laurel is interested in building a rental portfolio in Florida, an area particularly ripe for real estate investment.  When we asked her if she'd ever considered investigating a Land Trust, she confessed she knew nothing about them.

Laurel has generously agreed to work with us to inform our readers. As she learns all about the ins and outs of Real Estate Trusts, she'd like to invite our readers along on the journey.  As we open 2016, we'll all learn about  the ins and outs of Land Trusts.  We will start by reviewing exactly what is a land trust.  From there, we will learn about when it might be beneficial to set up a land trust, as well as when a land trust might not be the best choice.  We will review the pros and cons of land trusts, as well as a lawyer’s role in developing one.  We'll discuss some Frequently Asked Questions (FAQs) about Land Trusts, and we'll answer reader's questions.  We'll also discuss whether Land Trusts are good investment vehicles, and what are the limitations.  When we are finished, we will compile all of the information into an easy to reference ebook, including document samples.

Of course, none of this should  be construed as legal advice.    You should always consult with an attorney in your jurisdiction before taking action as a result of the information given to you here.  The information that will be given to you here will help prepare you to meet with an attorney and make informed questions as well as give you a better idea of what an attorney can and cannot do for you.

We invite all of our readers to take this journey along with us.  To be notified when new articles are posted, please follow us.  You may subscribe to the blog using the subscription form in the right sidebar, or you may follow us on Facebook, G+ or Twitter to be notified when new chapters are posted.

We also invite all of our readers to submit questions to be answered in future posts. Please submit questions using the comment section of this article.  You may also tweet us your questions or comment on the associated Facebook post.

Here at the Law Offices of Heath D Harte, we get a lot of inquiries about Land Trusts.  Although a lot of people are knowledgeable about real estate in general, we find few are aware of the benefits of Land Trusts or the intricacies involved with setting up trusts.  Hence, we hope you will take this journey with us to fill the gaps in your knowledge.  Please invite your friends and colleagues to join us.

Preparing Your Appearance For Court

Preparing Your Appearance For Court 

Playing To Win In Court In New York And Connecticut 

If you must appear to face criminal or motor vehicle charges in Superior Court or Juvenile Court in New York or Connecticut, the outcome of those court proceedings is very important to you. Your freedom and your future may be at stake. If convicted, you may face fines, jail time, revocation or suspension of your right to operate a motor vehicle, and a criminal or motor vehicle record. A criminal record will make it more difficult for you to be admitted to college, get a student loan, rent an apartment, find a job or enter the military. A serious motor vehicle record may result in the revocation or suspension of your right to operate a motor vehicle and increased motor vehicle insurance rates. Your appearance in court is serious business and you need to appear serious in court if you want to improve your chances for a favorable result.

You Only Have One Chance To Make A Good First Impression 

 The prosecutor, judge and jury, if you are at trial, will get their first impressions of you based on how you look; that is, how they see you dress and how they see you behave. A favorable first impression is invaluable. It influences how the prosecutor, the judge or the jury will like you, whether they will believe you and whether they will want to help you. You will be much better served if they like you, want to believe you and want to help you from the first time they see you. It will be much harder to get what you want if they don't like you and don't want to help you because you made a bad first impression. So, when you get ready for court in the morning:

• Wash up and pay attention to your personal hygiene and clothing. 
• Wear nice, clean, presentable and conservative clothes.

 For men this means a clean shirt with a collar (preferably light blue in color), clean pants without holes (jeans are OK but khakis without cargo pockets are better; pants should be worn at the waist, not below the hips) and clean shoes (sneakers are OK but dress shoes are better). Men don't need to wear ties, sport jackets or suits. For women this means a conservatively modest dress or blouse and skirt or pants (jeans are OK but slacks are better), clean shoes or sandals. Spending a few dollars to improve your wardrobe for court, even at a thrift store, may prove to be a very worthwhile investment in your future, so please consider it seriously.

• No clothing that reveals your midriff or your undergarments. 
• No bling showing! You can wear modest jewelry. 
• No heavy perfume, cologne or make-up. 
• No tattoos showing! If you have tattoos, cover them. When you are driving to court, parking your car, walking into the courthouse, waiting in the courthouse lobby or courtroom, talking to courthouse staff or anyone else in the courthouse: Be polite, respectful and courteous. Try not to offend anybody with loud talk or rambunctious behavior. 
• Turn off your cellphone and put away your MP3 player or iPod. 
• Be careful who you speak to and what you say, as you do not know who may be listening and you can safely assume that no conversation is private. It is important you watch what you say in the restroom, the hallway and in the courtroom itself, as you are under constant scrutiny. 

Five Considerations in Choosing a Lawyer

5 Considerations in Choosing a Lawyer

There are a slew of lawyers in every town, all of whom are telling you that they want to be YOUR lawyer. When you find yourself needing a lawyer, how do you choose? Here are some considerations to help you narrow down your choice.

 

1. Big Firm or Little Firm?

 

Some legal firms are huge. Their firms' names have 5 or 6 partners listed, and the firm employs dozens of other legal personnel, from Associate Attorneys to paralegals to legal secretaries. At the opposite end of the spectrum are firms composed of a single attorney. Which is right for you?

With a larger firm, much of your case will be handled by staff, rather than by your attorney. In fact, each piece of your case might be assigned to a different individual. When you call the firm, the receptionist will have to pull your file to see the appropriate person to whom to direct your call. You may rarely speak to “your attorney,” but usually will speak to one of the junior staff assigned to assist with your case. One attorney may handle settlement negotiations, while a different person will be assigned your case if you go to trial. One individual may prepare documents while a different person executes them. If you retain that firm again in the future, you may be working with an entirely different set of people. One lawyer will handle your divorce, different lawyer will handle your will, and another will handle that DUI.

With a smaller firm, you will get more individualized attention from your attorney. When you call the office, you will generally speak to one of two people: the lawyer himself or his assistant. Any future cases will be handled by these same individuals. You will be working with the same person through document preparation, settlement negotiations, and litigation. The same attorney will handle your divorce, custody settlements, will and preparation. If a few years later you get a DUI, you will be again working with the same attorney.
If a personal experience is important to you, you may want to consider going with a smaller firm. Your lawyer will get to know you with your first interaction, and s/he will be familiar with who you are when s/he handles future cases.

 

2. Areas of Practice

 

Some lawyers specialize, handling only cases that fall under a specific aspect of the law. There are lawyers that specialize in Condo Association Law, attorneys that specialize in Wills and Trusts, and firms that specialize in Personal Injury. Other law offices practice in many different areas of the law. Which is right for you?

Generally, the specialists are part of larger firms. Again, individuals within the firm have a specialized area of expertise. One personal injury lawyer may only handle car accidents, while a second in the firm only handles slip and fall incidents. One attorney may prepare your will, while a different attorney prepares your real estate trust.

With a smaller firm, the same attorney will handle both the will and the real estate trust. S/he will also handle your car accident and your slip and fall.

You might assume that the specialist will be cheaper in the long run, as s/he does not have to do as much research to effectively handle your case. Although it may be true that a single area lawyer can cite case law off the top of his/her head, you still want your attorney to research the latest case law that may apply. This is one area where skimping may be foolish. Chances are that firms of all sizes will need to do the same amount of research on your case.

Another consideration is the states in which the firm does business. To practice in any state, an attorney needs to pass the Bar Exam in that state. It is important to ensure your attorney can practice in the state where you need services.

Larger firms tend to have offices in multiple states. Smaller firms tend to practice in only a couple of states. If you own investment property in 6 different states, it might make sense to go with a specialized firm with offices in those states. Or, your lawyer may recommend s/he consults with such a firm should you require services in an area s/he doesn't practice.

Usually, as a client, you only need to worry about services in your own state and the adjacent ones. Most smaller firms maintain relationships with the specialized firms so that they may work together, when necessary, to meet your needs.

 

3. Convenience

 

Let's face it; we're all busy. None of us seem to have enough hours in the day. Any legal case brings enough stress along with it. You need to choose a lawyer who will work with you, on your schedule, and be convenient.

Does your lawyer insist that you come see him for every interaction, or after the initial consultation, does s/he work with you by phone, text, and e-mail as much as possible? Does your attorney work bankers hours? Or will s/he alter his/her schedule to meet with you after your work hours have finished? Are the offices easy to get to? Can you reach him/her at 1 am from your jail cell? Can s/he arrange for a bail bond if necessary?

Working with your lawyer should be as easy as possible for you. If it is not, you may have chosen the wrong attorney.

 

4. Payment

 

Lawyers are available at all price points. Many require large retainers up front. Other lawyers work on a contingency basis. Some lawyers cannot work within a budget; others will. Some lawyers require payment up front. Some lawyers offer payment plans. Some lawyers charge for travel time to court.

For some people, the price of their defense is no object. For others, money is tighter. It is important to discuss money and payment when choosing your attorney. Often, a contingency type arrangement ends up being a lot more expensive for the client. Sometimes though, contingency is the only way you can afford to pursue your case.

With the law, price and quality are not necessarily the same. Often, a too plush office is a sign your lawyer cares more about padding his wallet than about justice for you. Excellent representation is available at all price points. A good attorney should be able to quote you a ballpark range for your case. The initial consultation should be free. Ensure you choose a lawyer whose prices are in line with what you can afford. Be wary of attorneys that demand complete payment up front.

 

5. Personality

 

Last but not least, you need to choose an attorney with whom you can work. If your personalities clash, your defense will suffer. You need an attorney who you can trust and respect. Now this does not mean your attorney should become your BFF. It does mean that you should feel comfortable speaking with your lawyer. You should trust in your attorney's values and ethics. You should feel like a valued customer. You should be able to get your questions answered in a way you can understand.

That first consultation should be like an interview. If your gut tells you this is the wrong attorney, retain a different one. Likewise, you should feel comfortable with the office staff.

 

Summary

 

Choosing a lawyer can be stressful. But if you keep several things in mind, you can make an effective choice. Consider the size of the firm and how important a personal relationship is to you. If you want an attorney who recognizes your voice on the phone, you may want to consider going with a small firm. You also need to consider the practice areas, both in terms of subject and location. Your lawyer should be convenient to work with and accessible through whatever means you prefer. His work hours should also mesh with your schedule. Your ideal attorney will offer payment options and plans individualized to you. S/he should also be someone you can trust, respect, and just generally get along with. S/he should be able to meet both present and future legal needs.

Here at the Law Offices of Heath Harte, we realize you have a large choice of attorneys from which to choose. We are a small firm, and we believe in individualized, convenient services for all of our customers. We can handle a variety of legal issues, from personal injury, to criminal, to family, to wills and trusts. We offer convenient payment options and convenient payment plans. We believe in getting to know you as a person so we can better handle all of your legal needs. We hope, if you're located in the New York-Connecticut area, that you will consider us when choosing a lawyer. We invite you to our offices for a free consultation so that you can see if we can successfully work together. And we truly believe in law with a personal touch. If you are outside of the Westchester-New York-Fairfield-Greenwich-Stamford area, we hope you will be able to find a firm with the characteristics of our own.