New Note

Create a note for yourself from this lesson. Notes allow you to quickly jot down any valuable information you'd like to review later. You can find your notes by clicking on "My Notes" in the profile navigation menu.

Business Development

Land Trust Essentials: Can You Change a Land Trust After It's Created?

amendmentsHey there Moguls, Randy Hughes is back with us today with another informative installment in his awesome series about Land Trusts. Randy knows Land Trusts in and out, backwards and forwards – and that, friends, is why this expert is even called Mr. Land Trust. Rather fitting, huh?

Land Trusts can be a little tricky to understand, but not when Mr. Land Trust is on our side to break them down into easy-to-understand lessons. If you want to start from the beginning, here’s Part 1.

Last time, Randy talked about the controversy over the best way to hold title. He explored the pros and cons to holding title as a Limited Liability Company (LLC) vs. Land Trust. (Hopefully by now you realize it is NOT good to hold title in your own name.)

So for now, we’re gonna let Randy take it away from here…

From Randy Hughes…                             

Over the past several lessons of this Land Trust series, you have learned how easy it is to create your own Land Trust and many other essentials like:

  • Who should be the Trustee
  • Who should be the Beneficiary
  • Who should hold the Power of Direction
  • Which state has the best Land Trust Statute                             

When I discuss the use of a Land Trust to hold title to investment real estate, I am mostly talking about a Revocable Grantor Type Land Trust. What this means is that the Trust itself can be altered after its creation.

I tell my students to create their first Land Trust as quickly as possible so they get the experience of what it feels like…

signThen, if they don’t like something in the Trust Agreement or they learn something new that they want to put in their Trust Agreement… all they have to do is amend their Trust Agreement and viola… as of the date of the Amendment, the Trust Agreement is changed!

For the readers who prefer documentation to conversation, here is the support documentation for this concept:

Land trust agreements can ordinarily be freely amended. (H. Kenoe, Land Trusts § 2.47 (Ill. Inst. Cont. Leg. Ed. 1978) (hereinafter Kenoe).) While some trust agreements do no expressly provide the right to amend, such right will be inferred from the right of the immediate beneficiaries to terminate the trust, take a conveyance, and create a new land trust with the changes that they desire. Unless restricted by an agreement of the parties, amendments concerning the identity of the beneficiaries, the power of direction, or the allocation of  proportionate interests in the trust may be effectuated by simple assignment without further documentation. Kenoe § 4.12; see Shefner v. University National Bank (1976), 40 Ill.App.3d 978, 353 N.E.2d 126; Ciolek v. Jaskiewicz (1976), 38 Ill.App.3d 822, 349 N.E.2d 914.

Want a curtain or a brick wall?

Certainly an Irrevocable Land Trust has more asset-protection benefit to it than a Revocable Land Trust because under court order, the Revocable Trust can be revoked and all assets exposed to the claims of creditors.

But the Revocable Trust has more flexibility than the Irrevocable Trust and sometimes that is more important.

In either case, a Trust is effective in providing privacy, but a Revocable Trust is like a curtain while an Irrevocable Trust acts more like a wall for asset protection purposes.

curtain     wall



Quick recap

This lesson has discussed the difference between an Irrevocable Land Trust and a Revocable Land Trust…

We learned that Irrevocable Trusts have better asset-protection benefits than Revocable Trusts, but Revocable Trusts are more flexible.

Since most real estate investors use Revocable Land Trusts to hold title to their investment property, we will continue to learn in future Lessons some creative Land Trust strategies.

Coming up

In the next few lessons, we are going to discuss more creative concepts using Land Trusts to hold title to your investment real estate. To whet your appetite, here are some of the concepts we will discuss in future lessons:

  1. Using a Personal Property Trust as the Beneficiary of your Land Trust (and which state is the best to form your PPT in).
  2. Decanting an Irrevocable Trust (The “Do Over” Trust).
  3. The new Florida Land Trust Statute Revisions and how they could help YOU.
  4. Borrowing and Lending money with Land Trusts.

Randy Hughes, aka, Mr. Land Trust

Talk to me

Comments or questions? Talk to me in the comments section below.


Do It To It! Immediate Action Steps

Learn as much as you can about both Revocable and Irrevocable Trusts.

Know that Revocable Trusts are flexible and easy to change, but don’t have great asset protection.

Understand that Irrevocable Trusts have better asset-protection benefits than Revocable Trusts.

Is there a topic you'd like to learn more about? Request a Lesson


+ Mark as Learned

Valuable Lesson? Share it:


Request a Lesson

At RealEstateMogul.com, mogul_guarantee.pngwe’re committed to delivering the awesomest, most practical, actionable content to our members … and that a big part of that is getting YOU to tell us what you'd like to learn from us. Since our REI resources are basically endless, we’d love to tailor our upcoming training as much as possible to precisely match what you, our members, really need and want out of us.

jpsig.png Request form