Ordinarily a sale and transfer of real estate happens when an owner, choosing to sell, seller places another party on the property’s publicly recorded title as a new owner. When this process is done in the “regular” fashion–‘depending on the property’s geographical location–the deed (‘grant deed, warranty deed, or a bargain and sale deed) is transferred within an “escrow” process, wherein the properties legal title is entrusted with an escrow settlement official to hold until the transaction has been completed. This trusted, temporary holder of legal ownership is virtually always an officer of a licensed and bonded escrow company; a settlement official within a title insurance company; an attorney; or sometimes it may be the real estate broker responsible for the sale.
It should be noted here that this temporary conveyance of title-ownership in escrow serves to protect both buyer and seller from illicit or untoward actions by the other party (‘such as, say, attempting to unilaterally alter the terms of the purchase agreement; secretly borrowing on the property prior to transfer; causing liens against the property following title inspection, tampering with the verbiage in the public record, etc.).
HOWEVER, in a bonafide “land trust transfer (e.g., as is used the ODWM EHTrust Transfer®)”…’instead of granting the properties title to a buyer (i.e., “vesting it inthe buyer”), title is vested in a qualified third-party trustee (acting as title-holder in a beneficiary-directed, title-holding trust (‘most commonly referred to as an Illinois-type “Land Trust”), and appointing the acquiring party (the “would-be buyer”) to the position of “Remainder Co-beneficiary.” At this point that party receives all (100%) of the benefits of fee-simple real estate ownership, along with the added advantage of virtually perfect asset-protection, relative to future legal threats against the property.
In other words, by employing the EHTrust Transfer®, the acquiring party is afforded full income tax write-off for mortgage interest and property tax expense; future appreciation potential, equity build-up from mortgage principal reduction; full use and occupancy of the property; all available water and mineral rights; and the right to lease, sublease, rent or sell (‘as mutually agreed-to and stipulated in the contract).
In addition to the above,. the resident beneficiary’s (“buyer’s”) real property ownership is shielded against creditor judgements; IRS and/or state tax liens; bankruptcy; actions in marital dissolution; obligations in probate; and potentially irreconcilable dispute between the parties themselves.
In that the land trust transfer is directly analogous to a long-term escrow process, the presence of the third-party title-holder prevents any party’s untoward or illegal actions, or actions that would be detrimental to the other party/ies or to the property’s title (i.e., nothing can be done with regard to title, the underlying loan or the property itself without 100% concurrence by all beneficiaries).
WHAT ARE THE DISADVANTAGES? Other than the need for all parties to comport themselves in accord with the best interest of the other parties, the EHTrust actually affords far more benefits than does any seller-assisted financing device, or even a traditional home sale and purchase…’especially from standpoint of asset-protection. One’s ownership of beneficiary interest remains wholly private, secret, unrecorded and unassailable by judgement creditors.