WHY USE EQUITY HOLDING CORPORATION
AS TRUSTEE
As trustee Equity Holding Corporation holds title according to the terms of
an unrecorded trust agreement. The agreement sets forth the rights and
obligations of the parties. All of the rights of ownership are retained
by the beneficiary(ies)
The trustee does not manage the property or become responsible for its
operation. The trustee only deals with the title upon the written direction of the beneficiary(ies).
Beneficiaries control and direct the trustee in all matters relative to title
and disposition of the trust property. The trust can be revoked by the
parties beneficially interested in the trust.
This method of holding title may eliminate many of the difficulties encountered
in the acquisition, ownership, or disposition of real estate.
Trustworthy
Equity Holding Corporation was incorporated and registered with the California
Secretary of State in December 2000 as a nonprofit Mutual Benefit Corporation.
The sole function of the corporation is to act as trustee on behalf of the Members
of the Equity Holding Trust and other forms of land trusts. As a corporate
professional entity with unlimited life, its assets cannot end up in probate
or become subject to unnecessary income tax or delay in disposition.
Knowledge You Can Trust
The Corporate Executive Officer of Equity Holding Corporation has a rich background
of over 25 years in real estate, business and finance. He is educated and experienced
in the nuances of the Equity Holding Trust as well as its reporting requirements
including, to whom the Trustee can and should release information and to whom
it should not, without a Court Order. With over two decades
of law enforcement education and training, he is knowledgeable and experienced
in court ordered release of information, court appearances and depositions.
Management You Can Trust
While Equity Holding Corporation, charges a fee for its services that is commensurate
with industry standards, care is taken not to disqualify the Equity
Holding Trust and render it “dry” or invalid. Therefore Equity Holding Corporation
does not charge fees for handling collections, disbursements or other bill paying
and collection functions. Additionally, Equity Holding Corporation does not
become involved in managing property for the beneficiaries nor are the business
interest of the trustee merged with those of the Settlor.
Protection You Can Count On
Equity Holding Corporation is custodian of all original document including
Grant and Warranty Deeds, Assignments and Occupancy Agreements.
CHOOSING A TRUSTEE
Bill Gatten
North American Realty Services, Inc., a Consultancy
When
creating a simple single beneficiary land trust for just the purpose of
shielding ownership from
public view, one can legally name just about any one or
any entity he/she would choose to function
as a trustee. However, when more
than one beneficiary (i.e., a trust involving other parties with disparate
interests and objectives) is involved, there are severe drawbacks to using any
entity other than a
third-party, non-profit, corporate trustee.
Below are
listed a few of such considerations.
Selecting A Trustee
"When
creating a simple single beneficiary land trust for just the purpose of
shielding ownership from public view, one can legally name just about any one
or any entity he/she would choose to function as a trustee. However, when
more than one beneficiary (i.e., a trust involving other parties with disparate
interests and objectives) is involved, there are severe drawbacks to using any
entity other than a third-party, non-profit, corporate trustee."
Using A Friend Or Relative As Trustee
Risky
and quite probable failure to honor privacy and anonymity,
especially under threat of legal action.
An individual trustee’s failure to charge a fee would not support the land
trust’s validity in court. The attempt to charge a fee would not be seen
as adequate unless the party were a bonded entity.
An individual trustee’s death would embroil the property in his/her own
bankruptcy, Probate and other personal legal actions.
An individual would most likely never be bondable as a trustee and would likely
not have the resources to provide a completely separate, free and bonded
collection and bill-paying service.
An individual would not be seen by the courts as a standard trustee, charging
fees “commensurate with industry standards” therefore severely impairing
the integrity and structure of the land trust.
One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary
as a mutually trustworthy holding entity. Such likely bias obviously
would not be in the best interests of any of the co-beneficiaries
One’s Self As Trustee
Risky and quite probable failure to honor privacy and anonymity,
especially under threat of legal action.
An individual trustee’s failure to charge a fee would not support the land
trust’s validity in court. The attempt to charge a fee would not be seen
as adequate unless the party were a bonded entity.
If a trustee is also a beneficiary, a merger of title is created (see
Doctrine of Merger), invalidating the trust if challenged in court as being a
bona fide land trust.
An individual would most likely never be bondable as a trustee and would likely
not have the resources to provide a completely separate, free and bonded
collection and bill-paying service.
An individual would not be seen by the courts as a standard trustee, charging
fees “commensurate with industry standards” therefore severely impairing
the integrity and structure of the land trust.
One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary
as a mutually trustworthy holding entity. Such likely bias obviously
would not be in the best interests of any of the co-beneficiaries.
Using
One’s Attorney As Trustee
Using one’s own attorney would perhaps not pose a problem as long as no
other unrelated beneficiaries were involved who would have separate and
independent interests and financial objectives within the arrangement.
An individual trustee’s failure to charge a fee would not support the land
trust’s validity in court. The attempt to charge a fee would not be seen
as adequate unless the party were a bonded entity.
An attorney or law firm would most likely not be bonded as a trustee for land
trusts; though his/her malpractice insurance may suffice as protection against
malfeasance and/or errors and omissions.
An attorney or law firm would likely not be recognized as a bona fide trust
holding institution by any court that would be challenging the integrity and
purpose of a co-beneficiary land trust title transfer.
One’s own attorney would not create a mutually trusted, unbiased third-party
“escrow” entity. A biased attorney (acting in primary favor of a client)
could wreak havoc in a contest involving dissention between/among
beneficiaries.
Using One’s Own Corporation
Would create a merger of title, invalidating the trust, should it be challenged
in court as not being a bona fide land trust (see N.C. A.G.O. vs Russell and
Dianne Barberio 2005)
A privately or closely held corporation would not charge legitimate fees and
therefore would not likely be seen by the courts as a bona fide holding
company, whose business it is to hold titles in trusts and charge fees
commensurate with industry standards.
One’s own corporation would not be seen by a co-beneficiary as a mutually
trustworthy, and wholly unbiased third-party holding (“escrow”) entity.
Such a bias would not be in the best interests of co-beneficiaries. As
well, using one’s own business entity would create a merger of title
invalidating the land trust model.
Using An Outside Corporation As Trustee
In virtually all states, any corporation used as a holding company must be
either: 1) one’s own corporation (see above), 2) a chartered depository trust
institution (e.g., Bank and Trust, Title and Trust, etc.) or, 3) a non-profit,
charitable corporation established solely for the purpose of holding titles to
real estate in trust for the benefit of its members.
The Third Party Non-Profit
Corporation
A professional non-profit entity specifically and solely engaged in the holding
of titles in land trusts. Fully staffed by full-time knowledgeable
professionals.
A reasonable trustee fee is charged, which is well in line with industry
standards is charged, enabling the creation and funding of an un-paid 3rd-party
collection & disbursement entity (a free bill paying service for the
benefit of members).
Cannot die (re Probate issues), and is well backed financially to allow for
careful adherence to all laws, rules and regulations relative to reporting and
maintenance of a consistently good standing with the state.
Fully bonded as a trustee for title holding, beneficiary directed, 3rd party
trustee nominee title-holding land trusts.
Fully recognized as a bona fide holding institution by any court that
would/might be challenging the integrity and structure of the land trust or holding
to adherence to statute and or standards in states wherein land trusts per se
are specifically legislated and authorized
Functions a fully unbiased and unassociated third-party title holder
(“escrow-type)” holding entity.
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