Land Trust Agreement
I am 1/7 beneficiary of a Land trust, I have had rental income reported on my tax return for at least 13 years. The actual money was never given to me. Can you explain why?To understand the full extent of what is being done within the land trust, you would probably have to conduct an audit. However, a person can have taxable income without ever having the actual cash. Taxable income isn't necessarily connected to available cash that is to be distributed. For example, there are situations that require money to be spent, but these things don't create deductable income. If the land trust earned $500 in net taxable income but had to pay the same amount to the principle, there would be $500 in taxable income but there wouldn't be any money to distribute.
Can an executor of a land trust use the property in trust for a personal gain?While there are no laws that stop an executor from using the property for personal gain, if the executors gains are impacting the heirs funds from the trust or going against the grantors wishes, you might be able to sue the executor for damages resulting from the acts. Another thing to know is the executor must claim all gains from the trust on their personal tax return. The executor's main role is to divide the estate properties as the grantor (deceased) has directed.
My rental property is under a land trust and a LLC, I am a managing member. If I need to evict someone, do I need legal counsel or can I represent myself?An LLC is generally used as a tax device and probably wouldn't be used. However, if the LLC and Land trust are connected, it may be a situation where all the members of the LLC sign the pleadings and go to court. Usually, the trustee of the land trust would be the one to file the petition with the court for the eviction. You may want to show proof of how the LLC and the trust are connected. If you found by the court to not be qualified to represent the trust, you can have the trustee of the land trust appear at the court proceedings and you both can represent the land trust and the LLC.
Can I set up a land trust in Michigan to protect my home from creditors?Attempting to protect your home from creditors by using a land trust would appear to the court that you were trying to avoid or defraud the creditors who get a judgment against you. Generally, the court would void such actions later on in the judgment process. It will only take the creditor to claim you deliberately placed your home in a land trust in order to avoid attachment of the home.
Many people use land trusts as a means of safeguarding their property. These people allow another person to hold the land to avoid potential probate issues and some even try to avoid creditors. Before getting involved in a land trust, you should ask an Expert for assistance in making the right choices for the right reasons.