Land trusts (or passive trusts) are a kind of trust that pop up in title insurance transactions every every now and then. They could be difficult to cope with in Minnesota as they are used in other states, but aren't legal in the state of Minnesota. As a result, they can present numerous difficulties. In the following paragraphs, we are going to highlight three things you should know about land trusts because they relate to title insurance.
Land Trusts Aren't Like Other Trusts
Land trusts are different from most other types of trusts in that the beneficiaries from the trust (not the trustee) control the disposition of assets. This is the opposite of most other trusts in which the trustee controls the disposition from the assets.
Land Trusts Are Only Legal in Some States
Land trusts in many cases are used in states around the East Coast. However, in lots of states (including Minnesota), they are not legal. As a result, it's important to take extra care when recording title and issuing title insurance for properties involving land trusts.
It's Vital that you Review Land Trusts Before Recording Title
Land trusts require some extra scrutiny around the title insurer's part. If a land trust gets recorded in Minnesota because the parties involved aren't conscious of Minnesota state laws restricting land trusts, then your owner will have a pretty big issue on their hands from a title perspective.
Professional Commercial Title Solutions
Commercial title insurance coverage is a necessary element of any commercial transaction. Even so, lots of people don't know who to go to for title insurance. At Commercial Partners Title, we're here to help you with all your commercial title needs. With decades of experience under our belt, we have the knowledge and expertise to help you. Reach out to our commercial title experts today to talk about the particulars of your transaction. You can find us at our main office in downtown Minneapolis, but we work on transactions throughout the United States!