What You Missed December 2014 General Meeting
by Rob Earhart
The Benefits of Trusts
10+ Unknown Uses for Investors"
Presented by: Jack Shea
December 2, 2014
You can hold real estate in trusts for protection. Land trusts are the place we started at.
Today was gift card Tuesday so I got my Christmas shopping done for Merle today and it only took 4 minutes to get some gift cards at Harbor freight and some food at Arbyís.
There is an article about Bill Gates buying hundreds of acres of real estate in Florida. He believes that Florida real estate is a good long term investment but he bought them in LLCís and that is public record. Now he has exposure that he did not plan on. He made a mistake so Iím going to send him a Facebook invitation to my class.
That is an example of someone using the wrong device. In 1963, someone purchased 20,000 acres in land trusts. You may have heard of them, Disney, 50 years ago.
We teach how to create and use Trusts. Mark Warda, my partner and my trustee, does half the class and I do the other half. Trusts are standard procedure since the 1890ís.
It is pretty difficult to create a trust. You type in a few things in a document, print it and you have a trust. You just need two people, an address and a dollar sign. Dave Marek had taken the class several times and is now a graduate. Mark is on the trust committee in Tallahassee so he knows whatís going on.
We went to Pinellas County and asked to get Homestead on my home in a Trust. At first, they did not want to do it, until we convinced them Florida has now passed a law to make it available in all counties. Currently Mark is a trustee on over 1400 trusts.
In 1535, the courts ruled against the King so that he could not take property that was in a trust.
Later came the personal property trusts. If you have a mobile home on land, then a personal property trust can own the mobile home and the land trust can own the land. A personal property trust can own stocks, bonds, property and belongings.
Saturday, December 13th Mark Warda can tell you how he works with Morgan and Morgan to put peopleís property out of reach of any attorneys. Another evolution is taking the land trust and the personal property trust and putting together an IRA checkbook control trust. Then we can invest in things and get the monies in the ďcorner bankĒ and not back to the custodian. Then I pay $295 per year for the custodian and control the income and outflow.
Title companies want to see the trust but the Florida Statues say the trustee cannot show it. Title companies also try to make the check out to the trust but the Trustee has to direct them to make it to whomever the Trustee says to make it to. Florida law says that the beneficiary is not liable and the Trustee is not liable, just the Trust or the insurance company.
What you can do is make the offer in the name of the trust but if they will not accept that and itís a good deal, take it in your name then two days later put it in a trust, no big deal. There is no public record of the beneficiary.
Once you have the beneficial interest you can sell off a percentage, borrow on it or do whatever you want. The Beneficiary directs the trustee and, if there are more than one, they have to agree and let one direct the trustee.
Question: How do banks look at trusts to loan money? I donít use banks but use seller financing, private money and options, but some banks donít care how itís held since they get a first mortgage and a personal note.
Another thing we can do to purchase a property is to direct the seller to put the deed into a trust and I buy the beneficial interest. I then have to pay the doc stamps to Tallahassee in the name of the Trust.
Agreement for deed: Say the buyer does not make a payment, then you have to foreclose to get your property back. Instead sell the contract for beneficial interest, a contract for personal property. For personal property you donít own it until you make all the payments, so you just kick him out.
Would you ever sell 50% of an interest in a house? Yes, no problem in a trust.
How do you use lease options? Use a contract for option: contract for 36 months for the contract and then the purchaser gets the option.
Seller financing is easier because there is a large demand and they will pay over market and higher interest.
Condominiumize: This is to use a trust to create a condominium. Itís a lot cheaper and quicker to form than the normal condo conversion.
Jack then covered the class that he and Mark Warda will hold describing the layers of protection they will cover. The layers will protect your privacy, give you liability protection, and keep you safe and secure.
Donít be afraid of Trusts, just use them to your advantage, advised Mr. Shea.