What Is A Land Trust?

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Get answers to commonly asked questions about Land Trusts.

An Illinois Land Trust is a simple, convenient and inexpensive way to manage ownership of your real estate, whether it be a single family dwelling, a large farm, or commercial property.

If you believe a land trust should be part of your asset management program, stop by and meet with one of our experts.

What Is A Land Trust?

An Illinois Land Trust is a simple, convenient and inexpensive way to manage ownership of your real estate, whether it be a single family dwelling, a large farm, or commercial property. In a land trust the recorded title to the real estate is held for your benefit by the trustee while at the same time you enjoy all the rights, conveniences, and advantages of ownership. The trustee can act only on your direction so even though formal ownership is with the trustee you still have complete control of the property. You may terminate the trust at any time.

Benefits Of a Land Trust

Privacy of Ownership

  • The trustee is listed on all public records as owner of the land so someone examining the public land records cannot see that you are the owner of the property. In fact, absent unusual circumstances, the public need never know who is the property's real owner.


  • When property is held by more than one person the title may become un-merchantable by reason of death, a judgment against one of the owners, divorce or any of numerous other reasons. With a land trust, the title remains merchantable thus avoiding a possible cloud on the title.

Avoidance of Probate

  • By designating a contingent beneficiary you can avoid the trust property being included in your probate estate. This avoids the expense of probate as well as shielding the disposition of your property from the public.

Avoiding the Entanglements of Joint Tenancy

  • It has been common practice to create a joint tenancy in real estate holdings solely for the purpose of providing a succession of ownership on death. Under joint ownership, however, either of the joint tenants is given an immediate interest in the ownership and management of that property; and in many cases it handicaps the real owner in his or her dealings with the property without the written consent of the joint owner and the other spouse. Under the Land Trust Agreement, the party creating the trust, can, if he or she so desires, retain sole control over the property during his or her lifetime with the desired succession in ownership becoming effective upon his or her death without the expense of going through probate.

Ease of Multiple Ownership

  • Where there are multiple owners you can designate one person to direct the trustee. This avoids the necessity of having to get signatures from all the owners and their spouses.

Disposing of a Partial Interest

  • In many estate planning situations it is advantageous to dispose of a partial interest in an estate. A land trust simplifies this procedure by allowing the transfer of a partial interest by way of an assignment, which need not be recorded in the public records.

How to Establish a Land Trust

You can set up your land trust at the time the property is purchased or at a later date. You will need to execute a Land Trust Agreement and have the property deeded into the trust. We can provide you or your attorney with the necessary forms either by fax (call our Trust Department at 815-935-8000) or you may download them from this site.

In setting up your land trust you should consider two important items:

1) Naming a contingent beneficiary to succeed your interest to upon your death and

2) Naming someone to hold the power to direct the trustee to execute deeds and documents that deal with the title to the property.

How a Land Trust Operates

Under a Land Trust Agreement, the Beneficiary retains complete control of the real estate in the same manner as if the recorded title were in his or her name. The Beneficiary may end the trust whenever desired, or may add additional property to the trust at any time. At all times the Beneficiary deals with the property as though he or she were the record title owner, as a matter of fact, he or she is the owner. The Trustee, only when directed in writing by the Beneficiary, executes deeds and mortgages and deals with the property as so directed.

When title to real estate is held in a Land Trust, the interest of the Beneficiary, under the terms of the Trust Agreement, is personal property. Because a Beneficiary's interest is personal property, the Beneficiary may transfer that interest or part thereof by simply executing an Assignment of Beneficial Interest without the formality of executing and acknowledging a deed. Additionally, the Beneficiary's spouse need not join in such assignment for the purpose of releasing dower, as no dower attaches to the Beneficiary's interest in the Trust.

Some Frequently Asked Questions

Who can be a beneficiary of the land trust?

  • Any person or entity that can legally enter into a contract can be the beneficiary of a land trust. That includes, individuals, partnerhships, joint ventures, limited liability companies, corporations, 401(k) Plans, and living trusts.

I want to leave my beneficial interest to my niece on my death. How do I do that?

  • You would use language similar to the following when setting up the trust ownership: Jane Doe as to one hundred percent (100%) and upon her death to Molly R. Doe. This will insure that the beneficial interest goes to your niece, Molly, if she survives you, and this will occur without the necessity of probate.

How do I change the contingent beneficiary or beneficiaries on my existing land trust?

  • You would need to make a simple amendment to the trust. A form to do so can be found in the forms section of this web site.

Do I have to pay a yearly fee?

  • Yes. We charge a modest yearly fee to perform the duties of trustee. Even if there is no activity in your trust during the year, you still have the protection of the land trust 24 hours a day 365 days a year.

May a nonresident of Illinois be the beneficiary of a land trust?

  • Yes. One of the main reasons nonresidents use a land trust to hold title to land in Illinois is to avoid the time and expense of probate. As an example, Joe has lived most of his life in Illinois but when he retired he moved to Florida. He still has a piece of commercial property in Illinois which he wants to leave to his children when he dies. Being a pretty alert fellow, years ago Joe had a will drawn which leaves the commercial property to his children. Joe thinks he's got the situation pretty well covered, but what Joe is forgetting or doesn't realize is that now that he is a resident of Florida his estate will be probated in Florida. This means that because the commercial property is in Illinois the children will also need to open a probate estate in Illinois and hire (and pay) an Illinois attorney. Certainly not the result Joe would want if he thought about it. Joe can protect himself and his heirs by placing title to the commercial property in a land trust and naming his children as contingent beneficiaries. When Joe's time comes, his children will automatically control the property and there will be no need for probate in Illinois.

Must I be a resident of the United States to be the beneficiary of an Illinois land trust?

  • No, and that is another benefit of a land trust. Your mother in India can own property for which the title is held in an Illinois land trust. She can grant you, her daughter, the power of direction to manage the property. She might also want to leave the property to you and your brother on her death. This is also simply and easily done through a land trust.

How do I take the property out of the land trust?

  • You issue a letter of direction to the trustee to convey the property back to you.

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