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What is a Real Estate Privacy Trust?

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Your real estate deeds become publicly recorded whenever you buy a new property, be it commercial or residential. Certain states even upload these records to their online database, giving other people access to view them whenever they wish.

May 14, 2020
Author: Amber Ornelas

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So, to protect their assets from public record, real estate investors with plenty of separate rentals protect them by providing each property with its distinct trust agreement. Suppose they have residential and commercial property. If so, they can only secure their assets from liens, title claims, and HOA claims by placing separate trusts on each estate.

If you want to ensure maximum property privacy and protection for your assets, the best action is to look for a real estate privacy trust (REPT). This blog will discuss what REPTs are, how they work, and the benefits it offer to real estate investors.

What is A REPT?

Real Estate Privacy Trusts or REPTs are a type of Revocable Living Trust that real estate investors can use to place each of their properties. They are powerful tools that help landlords protect their assets and improve their overall privacy. By creating a REPT, the named beneficiaries retain the use of the estate while the trustee holds the legal title to all the entrusted properties.

Aside from this, REPTs also allow for multiple ownership. You can provide clear and easy legal guidance if you share your property with other investors. Ultimately, REPTs guarantee you maximum privacy and protection against litigations.

How Do They Work?

REPTs guarantee your privacy by not registering your trust and avoiding public records. When real estate investors purchase a property, their documents become a public record. Anyone can see the names of officers, directors, and shareholders on government websites if they want to. 

Furthermore, certain private companies provide access to public records like property tax assessments, liens, and more. By skipping the registration process entirely, your records stay private. Only your trustee can secure the documents and the identity of the beneficiaries. 

Trustees cannot release this information to the public unless they have a subpoena. Only you, your attorney, and the trustee knows about your REPTs.

The Benefits of REPTs

Besides improved security, there are other advantages to placing your properties in a REPT, including the following:

Privacy of Ownership

Real estate investors with REPTs can buy, sell, and own property anonymously. They can also transfer their estate in and out of the trust without anyone else knowing. The closing documents of your REPTs may be publicly recorded, but your name will not appear as grantor or grantee on any deed or in the public database. 

Flexibility

Another excellent advantage of having a real estate privacy trust is flexibility. You can easily transfer your properties to new beneficiaries while maintaining your privacy. Additionally, you can add a third-party trustee to sign your documents to prevent drawing attention to your estate. 

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Holds Various Properties

Whether you own a residential or commercial property, You can transfer both real estate types into a REPT. You can protect your home and office by transferring them to a land trust.

Avoids Probate

A land trust arrangement allows you to designate the succession of ownership according to your preference. With a REPT, you can name new beneficiaries anytime and skip the probation process. The property is transferred to your grantee without going through costly and time-consuming proceedings.

Facilitates Multiple Ownership

A REPT is the perfect solution for clear legal direction if you share properties with other investors. You and your legal representative can easily set up an agreement wherein multiple owners are included in the parcel. 

Retain Tax Advantage

When you place your properties in a REPT, you remain eligible for the homeowner’s and senior citizen’s real estate tax exemptions.

Protect Your Real Estate Today

As a real estate investor with multiple properties, you need a good strategy that can provide you with advanced protection and benefits. A real estate privacy trust is the perfect solution to guarantee security for your assets.

Our in-house legal team at NCH is dedicated to helping investors get the privacy and protection they deserve. So, when you’re ready to take your real estate investing career to the next level, give us a call!

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